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Economic Sanctions and their Effect on North Korean Regional Inequality

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thesis
posted on 2024-03-01, 00:46 authored by Jaeden LeeJaeden Lee

Abstract: This paper studies how economic sanctions and global isolation have impacted North Korea's regional economies from 2012 to 2022. Due to the relentless sanctions imposed for the denuclearization efforts and China becoming the only trade partner in essence, there are growing concerns over the well-being of North Korean citizens. I hypothesize that sanctions could have aggravated the regional inequality in North Korea through three channels: regional preference of the party elites, economic geography response from trade reliance with China, and internal industrial growth through import substitution. Using nighttime luminosity data as a proxy for economic activities, I find that all three hypotheses are true where counties with strong political influence, frequent trade with China, and industrial activities are better at insulating themselves from the detrimental effects of sanctions. Nevertheless, the study finds that North Korea experiences a significant decline in economic activity due to sanctions, despite some counties faring relatively better than others.

History

Institution

  • Middlebury College

Department or Program

  • Economics

Degree

  • Bachelor of Arts

Academic Advisor

Erin Wolcott

Conditions

  • Open Access

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