PROSPECT THEORY AND NORTH KOREA….Hooray!

PROSPECT THEORY AND NORTH KOREA….Hooray! More prospect theory!

Dan Drezner uses my favorite economic pastime to analyze Nicholas Kristof’s op-ed in the New York Times today, in which he says we should negotiate with North Korea in hopes that better ties with the West will eventually undermine their isolationism and start to open up their society. Dan thinks that Kristof is engaging in wishful thinking, something that prospect theory suggests will happen when faced with unpalatable choices.

You can read Kristof’s column for yourself, but just for the record here are the alternatives I’ve seen for dealing with North Korea:

  • A military strike. This is obviously risky and is not an option that anyone seems to be seriously advancing.

  • Wait them out. This might work in a decade or two, but nothing I’ve read leads me to believe that North Korea will collapse in the near future. Thus, this tactic would provide them with loads of time to build more nukes, and possibly sell them to other countries or terrorist groups.

  • Threaten to provide nuclear weapons to Japan. This would supposedly scare them (and the Chinese) so badly that they would agree to concessions. I’m not so sure. Even if this were feasible (i.e., Japan agreed to it and Bush made it fly domestically), it would lead to a situation similar to that between India and Pakistan, except even more unstable. Sounds like a bad choice.

  • Withdraw completely and let China, Japan, and South Korea deal with the situation. Same as option 2: it would give North Korea too much time to build up their arsenal.

  • Offer Kim Jong-il and his cronies safe asylum if they just give themselves up. Sounds good, but everything I’ve read about North Korea leads me to believe that they would never agree to this.

This is why I think negotiation is the best option: the others are so bad that even a lousy choice is the best we’ve got. What’s more, with any luck we’ll be able to negotiate something that provides better verification of their compliance without giving up much of anything that’s important to us. After all, what’s the harm of signing a nonagression pact if we don’t want to attack them anyway?

It’s true that this sends a bad message, but North Korea’s peculiar brand of negotiation-by-crisis seems unique in the world. Even if we play their game I don’t think there are many (or any) other countries that have the stomach to follow their example.

Of course, maybe I’m just engaging in wishful thinking. After all, prospect theory suggests that I should.

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