Economic Reform and Alternatives for North Korea

Abstract

This chapter assesses the potential for reform in North Korea, and considers the lessons learned from economic reform and transition in China, the Soviet Union, and Central Europe. We focus in particular on the importance of reforms in the financial regime, and argue that in the absence of a major change in North Korea?s environment, such as a crisis caused by reduced economic and/or political support from China, or increased access by the North Korean population to events in the rest of the world, the current situation is likely to continue for many years. North Korea will thus continue to alternate between declining, stagnant or mediocre economic growth. It will also continue to be a source of geo-political instability in the world in general and Asia in particular.Economic Reform; North Korea; Price Liberalization