North Korea’s parallel economies: Systemic disaggregation following the Soviet collapse

This article aims to introduce the concept of parallel economies to explain the transformation of North Korea’s command economy during the 1990s. The article summarises North Korea’s pre-1991 command economy, before identifying the collapse of the Soviet Union and the great famine (1994-1998) as causes for the splintering of the old command system into parallel economies—the official, military, illicit, court and entrepreneurial economies—separated from the central planning matrix. It concludes that the existence of parallel economies makes system-wide economic reform unlikely and increases the importance of foreign aid in maintaining the viability of the regime’s political architecture.