Why Economic Crisis Is a Benefit to the North Korean Regime

June 4th, 2012

Money makes the world go around.  People seem to like money, and it is people that ultimately make politics. As we have seen for decades, when a country’s economic situation takes a downturn, so does the government in power. The Asian Financial Crisis saw the Suhrto’s centralized and military-dominated government crumble in Indonesia. Last June unhappy Israeli consumers started a mild revolution of their own against the rising price of cottage cheese, boycotting its purchase completely as rising prices and eroding salaries hit a nerve amongst the population. And on a smaller scale, western liberal democracies tend to follow a voting pattern which sees the support of the political-left in times of economic crisis. Simply put, when people feel the money pinch, they look to the government for answers and when they don’t find these answers, they get fairly annoyed. But North Korea has been in economic crisis for decades and yet the government remains firmly in control. What gives?

To explain this irregularity, one must take into consideration North Korea’s extreme lack of economic development, as one of the world’s most centrally directed and least open economies. The socioeconomic development of North Korea could be considered so low, that the ‘structural conditions’, such as reasonable levels of urbanization or civil society required for an economic crisis to translate into mass insurrection do not yet exist. Today, North Korea’s income per capita is estimated between $1700- $1800 USD.  Victor Cha argues that low-income and major food shortages have the masses “preoccupied with basis sustenance” – not revolution. The overturning of an authoritarian system like North Korea’s occurs not when things are at their absolute worst, but when they begin to get better.

In countries with income levels below a certain threshold, dictatorships are almost always stable, meaning that ‘survival values’ take precedent over ‘self-expressive values’ that create a higher tolerance for authoritarianism.

While North Korea’s governing elite and military elite are interconnected authorities in the DPRK, it is generally believed that Kim Jong-Il, and Kim Jong-Un in succession, used perks and rewards to co-opt military and political elites[1]. In this sense, economic predicaments can elevate tensions within the ruling elite of the party and military, thus increasing the likelihood of reforms, coups, and other stimulants of regime change. In the case of personalistic dictatorships like inNorth Korea, an economic crisis may obstruct the distribution of benefits to supporters and allies of the dictator, whose loyalties are largely a function of personal patronage[2]. As authors of Development, Democracy, and Welfare States Stephen Haggard and Robert Kaufman mention, “economic downturns affect the loyalty of the political- military elite by reducing the ability of the government to deliver material benefits.[3]” Such tension can potentially reshape the political landscape, as factions of regime soft-liners amongst the DPRK elite may begin to seek support amongst the masses[4].  Furthermore, if new coalitions within civil-military relations do emerge, the likelihood of a military coup increases, as does the likelihood that the military will withdraw its support for the regime[5].

This theory, however, presents another of North Korea’s incongruities. In times of economic downturn, material benefits may indeed decrease, but also have the potential to increase the incentive structure for supporters of personalistic regimes, and increase the authoritarian regime’s resistance. Members of the DPRK political elite, the ones who have the potential to promote regime change, are highly likely to have risen to their political standing through negotiation and support of the regime’s corruption. This means their livelihood is dependent and derived from party offices[6]. If we perceive this as a zero-sum game, potential political factions in the DPRK may “face the prospect of losing all visible means of support in a political transition, they have little option but to cling to the regime, to sink or swim with it.[7]” The dynamics of economic crisis on DPRK regime stability and the causal effects of this crisis on initiating ruling elite splits is mediated by the condition that the crisis is bad enough to the extent that the minority faction’s payoff is equal to or lower than the anticipated inducement of an attempt at overthrow[8].

The ability of the DPRK authoritarian regime to withstand the effects of many economic factors that would, in other cases, see the downfall of such a regime is an outstanding case for democratization theory specialists. While North Korea is indeed experiencing an economic crisis, income levels of the DPRK are below the theoretical threshold. This appears to create a higher tolerance for authoritarianism and create a reverse effect in favour of authoritarian stability. The extremely low income also results in the potential minority faction’s payoff being equal to or lower than the anticipated inducement of an attempt at overthrow, therefore discouraging elitist factions. The elite are not heavily affected by the lack of government services and negative factors of the economic crisis and gain their livelihood through the corruption of the economic system. Therefore, the elite see no need to alter the status quo. Finally, the extremely low levels of economic income result in an absence of civil society, which many theorists believe is an essential ingredient to toppling an autocratic regime.

While these economic factors cripple North Koreas economy, keep many of its people in conditions of poverty, and diminish the nation’s standing in the international arena, these conditions are actually beneficial to the maintenance of the DPRKs autocratic and personalistic regime. Economic crisis is one factor that keeps Pyongyang afloat, and solidifies the regime.  One may therefore question if Pyongyang see it as beneficial to maintain economic failure in exchange for regime longevity?

[1] Byman, Daniel. “Keeping Kim: How North Korea’s Regime Stays in Power”, Policy Brief, Belfer Center for Science and International Affairs, Harvard Kennedy School, 2010. Sourced from Belfer Centre, http://belfercenter.ksg.harvard.edu/publication/20269/keeping_kim.html. Accssed 22/4/2012.

[2] Geddes, Barbara, “What do we know about Democratization after Twenty Years?”, Annual Review of Political Science, Vol. 2, June 1999.

[3] Haggard, Stephan and Robert R. Kaufman, “The Political Economy of Democratic Transitions”.

[4] ibid

[5] Snyder, Richard, “Explaining Transitions from Neopatrimonial Dictatorships,” Comparative Politics, Vol. 24, Issue 4, July 1992.

[6] Bratton Michael, and Nicholas van de Walle (1994). “Neopatrimonial Regimes and Political Transitions in Africa”, World Politics,Vol. 46, July 1994.

[7] ibid.

[8] based on application of the payoff structure facing personalist regimes appearing in Geddes, Barbara, “What do we know about Democratization after Twenty Years?”, Annual Review of Political Science, Vol. 2, June 1999.

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About the Author

Tasharni Jamieson