This report summarizes the findings of an NBR project on the regional economic implications of North Korea's security behavior. It also analyzes the potential economic consequences of a "bold switchover" from "military-first politics" to "defense sufficiency" by the Democratic People's Republic of Korea (DPRK).

Main Argument

The economic costs of North Korean military policies and international security behavior cannot be measured by foreign aid budgets--or defense budgets--alone; all of North Korea's neighbors have suffered broader economic costs, and lost economic opportunities, as a direct consequence of Pyongyang's security policies and practices. Likewise, all of North Korea's neighbors stand to benefit economically from an emendation of North Korea's security behavior.

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Nicholas Eberstadt is the Henry Wendt scholar in political economy at AEI. Richard J. Ellings is the president of the National Bureau of Asian Research. Roy D. Kamphausen is vice president for Political and Security Affairs and director of the National Bureau of Asian Research 's Washington D.C. office. Travis Tanner is director of the National Bureau of Asian Research Pyle Center for Northeast Asian Studies. Daniel B. Wright is the managing director for China and the Strategic Economic Dialogue at the U.S. Department of the Treasury.