Social Capital in North Korea: Shadow Economy, Shared Norms and Social Networks

Since the collapse of the command economy in the 1990s, North Korea has experienced profound changes driven by bottom-up marketization. This paper examines the impact of informal marketization on “social capital” (defined as shared norms and social networks) in North Korea. Our study investigates whether and to what extent the shadow economy has influenced social capital in the region. We gathered data through a survey of 1309 defectors, interviews with approximately 100 defectors, and in-depth interviews with 24 former high-ranking North Korean officials. Both quantitative tests and qualitative analyses indicate a significant transformation of social capital in North Korea. The traditional “old” social capital, which was previously centered around official workplaces, has diminished. In its place, a “new” social capital has emerged, primarily revolving around marketplaces in recent years. The shadow economy has been instrumental in fostering this new type of social capital, influencing both the “bonding” (shared norms) and “bridging” (social networks) aspects. Despite the emergence of a new social capital facilitated by bottom-up marketization, its evolution into a civil society remains uncertain due to two critical limitations: a lack of both civic engagement and social autonomy.