The North Korean regime has adjusted to international sanctions by shifting that economic pain away from cities to the countryside, new Stanford research using satellite night lights data shows.

U.S. policy toward North Korea has been based on the expectation that economic sanctions could deter North Korea from developing nuclear weapons or change the behavior of the regime, according to Yong Suk Lee, a Stanford economist at the Freeman Spogli Institute for International Studies.

Since 1950, both the United States and the global community have adopted a series of economic sanctions against North Korea. The latest came in 2013 when the United Nations approved restrictions on banking, travel and trade in response to North Korea's underground nuclear test and threat to launch nuclear strikes against the United States and South Korea.

In a working paper, Lee examined how North Korea's Communist rulers have adapted to the increasingly tougher sanctions through the years.

"North Korea is one of many autocratic regimes that refuse to yield to sanctions, and its isolation and hereditary dictatorship make it a particularly good example to study the impact of economic sanctions in autocratic regimes," said Lee, the SK Center Fellow and a faculty member of the Korea Program at Stanford's Walter H. Shorenstein Asia-Pacific Research Center.

North Korea is one of the poorest countries in the world, Lee noted. Its leaders follow an economic model based on a centrally planned economy and self-imposed isolation from the rest of the world.

Satellite data

Lee's research was based on nighttime views of lights from data collected by the U.S. Defense Meteorological Satellite Program. The researcher created "average luminosity" measures of lights across North Korea based on a 1-mile-by-1-mile grid for the years 1992 through 2010. Light usage was examined for brightness on one-minute intervals.

To predict the impact of sanctions on economic activity in North Korea, Lee used a formula that transformed the luminosity measures into GDP measures. For example, a 10 percent change in the satellite lights is associated with about a 3 percent change in GDP.

According to Lee, satellite data is of greatest utility in assessing the economies of cities and regions in the developing world. In a country like North Korea, a large part of economic activity happens during the evening and night and involves light. For example, lights at night are generated by peoples' consumption of goods and services as well as transportation. And some production activities happen during the evening hours.

"Economists have found that how bright night lights are can predict national and sub-national GDP quite well, especially in countries where GDP data is not reliable," he said.

Lee found that economic sanctions decreased luminosity in the hinterlands, but increased luminosity in urban areas, especially toward the centers. As for whether additional sanctions affected luminosity, he found they increased the urban-rural luminosity gap by about 1 percent. When he examined the more central urban areas, the gap increased by about 2.6 percent.

"The results suggest that the dictatorship countered the effects of sanctions by reallocating resources to the urban areas," Lee said. One could surmise that the economic sanctions do not affect the country's leadership much, he said.

The hinterlands responded to declining economic fortunes by relying more on trade with China near those border areas, Lee added. In fact, the sanctions generated more North Korean migration to China and reliance on Chinese merchants and goods. North Korea's border with China is relatively porous as opposed to its heavily militarized border with South Korea.

'Increasing inequality'

The upshot, Lee said, is that sanctions that fail to change the behavior of an autocratic regime may eventually increase urban-rural inequality.

"Sanctions will likely be inefficient as long as North Korea can maintain powerful centralized control and oppress any discontent that arises due to increasing inequality," he said.

Lee added that sanctions will most likely not deter North Korea's nuclear weapons activities. They have not done so yet, and at this point, North Korea's leaders view sanctions as inconveniences, but not regime-threatening. Plus, even the harshest sanctions would be unlikely to stem the flow of all goods, energy and money into North Korea. Not all countries would go along with draconian trade restrictions that hurt the poorest people the hardest, he said.

"Even if sanctions were imposed to full capacity, the marginalized population would suffer the most," said Lee, adding that he was actually surprised about his project's findings.

"One can always hypothesize a story but to actually find such effect in the data was quite exciting. Frankly, I pursued this project expecting that I wouldn't find any impact of sanctions on lights," he said.

Clifton Parker is a writer for the Stanford News Service.

Three former Human Rights fellows have been listed as Business Insider’s “15 Incredibly Impressive Students.” Garima Sharma, Nicholle Richards, and Lara Mitra were highlighted for their passionate and innovative work as undergraduate Stanford leaders.

All three were awarded the Human Rights Fellowship by the Stanford Program on Human Rights and the McCoy Family Center for Ethics in Society. This fellowship is awarded each year to a small group of highly competitive applicants.

Sharma worked with Apne Aap: Women Worldwide, an anti-trafficking NGO based in Forbesganj, India. She spent two quarters designing an interactive human rights education curriculum focused on sex trafficking, which she used in Forbesganj to engage with at-risk girls who are the daughters of sex workers in the red light district, as well as 12-14 year-old girls belonging to the Nutt (lower-caste) community. Simultaneously, she worked with older men, women and community leaders, with the goal of making preliminary headway into a community-wide anti-trafficking strategy.

Richards traveled to Guatemala to work with Kids Alive, a nonprofit that works to rescue orphans and at-risk children. In Guatemala, she helped at a care home for girls who have been abandoned or abused – often in the form of forced labor and/or physical and sexual abuse. She evaluated a program that works to continue supporting the girls who have returned home, and established a micro-loan project to help encourage business development and women’s empowerment in the region.

Mitra worked with Self-Employed Women's Association (SEWA), a union of 1.4 million informal economy workers, which provide community-driven socioeconomic services, including healthcare, local banking, social security, and housing to marginalized groups in Ahmedabad, India to. She focused on SEWA’s initiatives responding to people's inherent right to a healthy life, and worked with the health team to analyze and document the changing role of front-line health workers who deliver care to expecting mothers.

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An article published in Caixin Online (in Chinese) on March 28, 2014, features REAP research on how to improve high school enrollment rates in rural China. 

Yi Hongmei, an assistant professor at the Chinese Academy of Sciences and researcher with REAP, found that in China's poor rural areas, 63 percent of high school students are not receiving a complete high school education.  Yi Hongmei identifies four major causes leading to the high dropout rate: high tuition costs in Chinese high schools; rising opportunity costs of attending high school associated with rapidly increasing wages in the labor market; a lack of academic planning and guidance for high school students; and students with lower scores giving up on their education due to the competitive nature of the Chinese education system.  

Yi Hongmei found that both subsidizing high school tuition for poor students and offering conditional cash transfers to students who stayed in school effectively lowered the high school drop out rate, whereas training students in academic and career planning was not an effective means to do so.  Furthermore, solving the problem of secondary education in rural China will also require improving vocational schools, which, despite their growing popularity in China, have very low quality in many rural areas.

Read more here

CDDRL congratulates two of its 2014-2015 senior honors students, Stefan Norgaard (Public Policy and Urban Studies '15) and Garima Sharma (Economics '15), after they were featured in a recent article in Business Insider  highlighting some of Stanford University's most 'incredibly impressive students.' Both Norgaard and Sharma conducted field research this past summer in foreign countries to collect data for their theses, which they are currently writing under the direction of the CDDRL Senior Honors Program.

Norgaard is currently researching South Africa's active political youth, the "born free" generation, and helped create an innovative community-building tool in Johannesburg's gentrifying neighborhoods. Sharma is examining the culture behind child marriages in India and has interviewed over 80 mothers on their decisions to put their daughters through the practice.

The CDDRL Senior Honors Program aims to provide an opportunity for eligible seniors focusing on democracy, economic development, and rule of law subjects in any university department to earn honors in democracy, development and rule of law (DDRL). To learn more, please visit the program page here.