A North Korea expert’s Bayesian update

Kim Byung-yeon

The author is a chaired professor of economics at Seoul National University. 

In July 2014, the title of my first JoongAng Ilbo column was “Without modest progress, reunification bonanza becomes reunification gamble.” I criticized the government’s North Korea policy, arguing that any grand vision of reunification had to rest on small but meaningful steps, namely private-sector economic cooperation that could foster market activity in the North.

Over the following year and a half, I published a series of columns advocating greater engagement with Pyongyang. Then, in early January 2016, North Korea carried out its fourth nuclear test.

In a column published immediately afterward, I proposed sanctions targeting the North Korean economy. Two months later, I called for measures even tougher than the first round of economic sanctions imposed by the United Nations Security Council. According to people around him, one prominent conservative intellectual remarked before his death, “Professor Kim has finally come to his senses.” A leading progressive politician, meanwhile, rebuked me, arguing that sanctions were incompatible with progressive values despite my insistence that economic pressure was the most peaceful way to prevent war.

I had merely revised my judgment in light of new evidence, engaging in what statisticians call Bayesian updating. Some, however, interpreted the shift as ideological.

Victor Cha of the Center for Strategic and International Studies has recently undertaken a Bayesian update of his own. Long known as a hard-liner on North Korea, he argued in a recent article in “Foreign Affairs” that the policy goal should shift from denuclearization to managing nuclear risks. Sanctions have failed, he contends, and with few alternatives available, policymakers must acknowledge the reality of North Korea’s expanding nuclear arsenal and its growing alignment with China and Russia.

Cha advocates accepting a “cold peace” as the lesser evil to avoid the greater danger of nuclear war. He also suggests that reductions in U.S. troop levels in South Korea, which Washington may seek for strategic reasons, could be used as leverage in negotiations with Pyongyang. Experts should have the intellectual courage to change their views when facts change. In that respect, Cha’s position deserves attention.

Yet his Bayesian update overlooks one crucial body of evidence: conditions inside North Korea.

In his first public speech in 2012, Kim Jong-un promised that North Koreans would “never again have to tighten their belts.” That pledge has failed. According to estimates by the Bank of Korea, North Korea’s national income in 2024 stood at just 99 percent of its 2012 level.

The market economy, once a key source of growth, has been severely weakened by sanctions, the Covid-19 pandemic and, more recently, the regime’s repressive policies. Before sanctions, an average household earned roughly $50 a month. Today, the figure appears to be closer to $30.

The growth recorded since 2023 stems largely from increased weapons production driven by demand from Russia and has done little to improve the welfare of ordinary citizens. Kim’s popularity among North Koreans is therefore likely far lower than it was at the beginning of his rule. If grades were assigned, Kim would receive an A in nuclear development but a D in economics. Many American experts, however, update their assessments based only on his nuclear score.

If developments inside North Korea are taken into account, now is not the time to abandon denuclearization in favor of nuclear management. The moment Washington adopts negotiations focused on managing North Korea’s arsenal, Pyongyang will effectively secure recognition as a nuclear state. Such a change would be difficult to reverse.

North Korea’s domestic conditions and the geopolitical environment, however, are variables rather than constants. Future developments could still create opportunities for Seoul and Washington to negotiate while maintaining denuclearization as their long-term objective.

Cha worries that accidental clashes could escalate into war. But Kim Jong-un, convinced that the current balance of power favors him, has strong incentives to avoid military conflict in order to preserve that advantage. Nor is it realistic to expect that a shift toward nuclear management would weaken ties among North Korea, China and Russia.

South Korea would find it difficult to pursue economic cooperation with a North Korea formally accepted as a nuclear power. The result would be even greater North Korean dependence on China, while hopes for reconciliation between the two Koreas would fade.

A cold peace cannot last indefinitely. North Korea’s fundamental weakness lies in the imbalance between its nuclear ambitions and its economic failures. When economic development stalls, the regime must rely more heavily on coercion to suppress public discontent, increasing instability.

Sustainable peace will come only when North Korea’s nuclear and economic problems are addressed together.

Without understanding what is happening inside North Korea, analysts risk falling into Kim’s strategic trap. Some experts focus exclusively on Pyongyang’s nuclear capabilities and diplomatic gains and conclude that Seoul and Washington should make major concessions in exchange for rapid peace.

But rapid peace is not necessarily good peace. Reversing long-held judgments on the basis of incomplete evidence is a premature turn. The moment for a truly Bayesian update has not yet arrived.