New Book Assesses Impediments To Resolving Conflict With North Korea

Washington—A new book coauthored by Marcus Noland, a longtime expert on North Korea at the Peterson Institute for International Economics (PIIE), argues that a peaceful resolution of the North’s nuclear issue is possible despite the rising chance of a military conflict. The book, Hard Target: Sanctions, Inducements and the Case of North Korea, published by Stanford University Press, presents new research on why economic punishments and inducements aimed at the Pyongyang regime have failed to influence its behavior. On the other hand, Noland and his coauthor, Stephan Haggard of the University of California, San Diego, maintain that the United States may be forced to reexamine the possibility of a diplomatic resolution of the tensions on the Korean peninsula because of a new government taking office in Seoul and the obvious lack of effective military options available.

The book is to be presented at an event at the Peterson Institute on June 7. Noland is executive vice president and director of studies at PIIE. Haggard is Krause Distinguished Professor of Korea-Pacific Studies at the Graduate School of Global Policy and Strategy at the University of California, San Diego. Together they have written several books and research papers on North Korea over the years, most recently Witness to Transformation: Refugee Insights into North Korea, published by PIIE in 2011.

North Korea is under both United Nations and bilateral sanctions. But authoritarian states, of which North Korea represents an extreme case, can frustrate sanctions. They can do so, the authors argue, by repressing popular discontent and channeling sanctions-related rents to key constituencies and supporters. Similarly, when presented with engagement opportunities, incumbent governing coalitions in closed, authoritarian states such as North Korea recognize the “Trojan horse” nature of engagement, and not only have the capacity to resist sanctions but seek also to control the nature of cross-border flows precisely to maximize rents accruing to the regime and limit transformation.

Because of the authoritarian nature of its regime, North Korea is described by the authors as the paradigmatic “hard target,” insensitive to sanctions—or engagement—and the outside world should have modest expectations about its ability to influence the country’s trajectory. Yet to the extent that the outside world can influence outcomes in North Korea, South Korea is key. Seoul’s new government is adopting a more forward-leaning engagement policy. Beijing will not take a harder line than Seoul, and coordination failure could create a highly dangerous situation: Just when the United States and China may be acting in concert to strengthen sanctions, a nonconditional North-South engagement would effectively throw North Korea a lifeline.

When confronted with the paucity of good military options on the Korean peninsula, US policymakers will be forced to reexamine options for resolving the issue diplomatically, the authors say. In this regard, a unified government under a Republican administration may present a propitious opportunity for diplomacy to succeed, much like it required the arch anticommunist president Richard Nixon to establish diplomatic relations between the United States and China.

“Authoritarian states present unique challenges for economic diplomacy, but also the need for policy alternatives short of warfare to change their behavior. In this regard, Haggard and Noland’s Hard Target is truly groundbreaking in its empirical analysis and hard-headed realism,” says Adam S. Posen, PIIE president. “Their years of research offer a unique depth of insight into North Korea, which constitutes not only an extreme example of the diplomatic problem they address, but more importantly means that their recommendations are relevant to today’s most pressing security challenge for the United States and East Asia. Building on the pioneering work by Institute scholars Gary Clyde Hufbauer and Jeffrey J. Schott on economic sanctions, Haggard and Noland present a fresh systematic analysis of the opportunities and pitfalls of economic engagement as a strategy to alter hostile states’ behavior. Their contribution highlights the practical importance of the internal political economy of the target state in determining the effectiveness for diplomacy of both sanctions and inducements.”