Why Help North Korea? Foreign Aid to North Korea and Its Determinants, 2002–2018*

Abstract

Since North Korea solicited international assistance due to famine in 1995, the international community has provided billions of dollars of aid to the country. Despite multiple challenges from donors' perspectives, bilateral donors continue to extend aid grants that play a significant role in sustaining North Korea's dysfunctional economy. Nevertheless, there are great variations among bilateral donors in terms of aid amounts to North Korea. This article investigates the determinants of donors' aid allocation decision to North Korea and finds that dyadic factors – diplomatic ties, foreign policy similarities, and bilateral trade volume – are significantly associated with some donors' aid allocation to this country. It shows that, consistent with their aid allocations elsewhere, Nordic Plus donors have different aid policies toward North Korea compared to those of non‐Nordic Plus donors. This article suggests the need for donors' concerted efforts to make changes in North Korean economy and society.