The evolution and practice of economic statecraft in South Korea: the case study of South Korea’s positive engagement towards North Korea

This thesis aims to investigate the use of positive economic statecraft in South Korea in relation to its policy on North Korea between 1988 and 2007, and examines the impact of economic incentives on inter-Korean relations under the governments of Kim Dae-jung and Roh Moo-hyun. To address the question of whether South Korea’s policy on North Korea could induce cooperation in inter-Korean relations and lead to changes in the political behaviour of North Korea, this thesis re-conceptualises the practice and process of the use of economic incentives as positive engagement. This thesis argues that the impact of positive engagement on inter-Korean relations is corroborated by the changes made at the level of economic ties between the two Koreas. This increased level of asymmetrical interdependence between the two Koreas is expected to dissuade Pyongyang from conducting hostile behaviour thereby reducing the danger of military conflict while providing the impetus for further structural changes within North Korea. However, this thesis demonstrates that the increased inter-Korean economic cooperation and North Korea’s subsequent economic dependence on South Korea fails to induce North Korea to open up, undergo reform, and dissuade it from carrying out nuclear or missile tests. This thesis argues that while it is correct that North Korea’s pursuit of a nuclear weapons programme imposes constraints on the dynamics of engagement, the determinants of positive engagement also stem from the nature of South Korea’s policy on North Korea itself and divergent forces derived from sanctions and incentives-oriented policy between the United States and South Korea.