(iPoster) Pyongyang and the Provinces: Regional Development in a Centralized Party-State

• In Event: Poster Session: Politics of Communist and Former Communist Countries (Asia)

Abstract

How does regional economic development emerge in one of the world’s most centralized party-states? Existing research on subnational economic variation under authoritarianism focuses largely on high-capacity cases, most prominently China and Vietnam, where decentralization, fiscal incentives, and bureaucratic professionalism structure local initiative within hierarchical control (Oi 1992; Heilmann 2008; Xu 2011; Ang 2016). By contrast, North Korea is typically portrayed as economically dichotomized: a rigid state-owned sector juxtaposed against black and gray markets composed of illegal or stigmatized private activity (Szalontai 2005; Lankov 2013; Yeo, Kim, and Wertz 2021). This paper challenges that view. I argue that even within the domain of state-managed enterprises, there exists substantial and theoretically meaningful variation—first, between centrally managed and regionally managed enterprises, and second, across regions characterized by high versus low levels of central party oversight.

I advance a theory of regional economic development in highly centralized, low-capacity party-states in which the absence of central oversight—rather than formal decentralization or administrative capacity—creates space for localized, regionally managed economic initiative. Where centrally dispatched party cadres dominate regional leadership, enforcement of orthodoxy is stronger and local economic development is constrained. Where regional administrations are staffed by locally rooted officials, central oversight becomes fragmented, allowing regionally managed enterprises to operate with greater discretion and enabling pragmatic, adaptive forms of economic coordination within the state sector.

Empirically, I draw on two original datasets. The Korean Institute for Industrial Economics and Trade (KIET) North Korea Industry–Enterprise Database catalogs 3,674 enterprises (as of March 2025) and identifies whether each firm is managed by central or regional government agencies. From this database, we derive four firm- and region-level indicators of economic outcomes: (1) enterprise counts, (2) firm longevity, (3) citation counts of enterprises in North Korean state media, and (4) sectoral diversity across light industry, heavy industry, energy, and mining. To measure political oversight, we operationalize central control in a novel way using elite career trajectories. Drawing on the DPRK Careers and Organizations Database—which integrates over 600 elite resumes with a comprehensive organizational tree of central and regional party and state institutions—we calculate the proportion of regional administrators whose careers are rooted in the central party and include center-to-region dispatch trajectories. We join these two datasets to assess how variation in central party penetration of regional administration shapes patterns of regional economic development within the state-managed enterprise sector.

This study will proposes a set of testable hypotheses about regional economic development among North Korea’s state-managed enterprises. I hypothesize that enterprises that are regionally managed, and enterprises located in regions with lower levels of central party oversight, will exhibit (1) higher enterprise counts, reflecting greater entry and institutional density; (2) shorter enterprise longevity, consistent with more experimental and less protected forms of economic activity; (3) greater sectoral diversity across major economic sectors, indicating greater versatility to fill economic niches; and (4) higher citation rates in North Korean state media, indicating the state’s desire to highlight these new forms of economic activity.

References

Ang, Yuen Yuen. 2016. How China Escaped the Poverty Trap. Ithaca, NY: Cornell University Press.

Heilmann, Sebastian. 2008. “Policy Experimentation in China’s Economic Rise.” Studies in Comparative International Development 43(1): 1–26.

Lankov, Andrei. 2013. The Real North Korea: Life and Politics in the Failed Stalinist Utopia. Oxford: Oxford University Press.

Oi, Jean C. 1992. “Fiscal Reform and the Economic Foundations of Local State Corporatism in China.” World Politics 45(1): 99–126.

Szalontai, Balázs. 2005. “Economic Reform in North Korea: Institutions, Market Forces, and Policy Change.” Harvard Asia Quarterly 9(2): 4–15.

Xu, Chenggang. 2011. “The Fundamental Institutions of China’s Reforms and Development.” Journal of Economic Literature 49(4): 1076–1151.

Yeo, Andrew, Ji-Young Kim, and Daniel Wertz. 2021. Market Activities and the Building Blocks of Civil Society in North Korea. Washington, DC: National Committee on North Korea.

Author

• Unregistered Participant