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North Korean Marketization Index

How far North Korea’s economy has moved toward the market in three dimensions, scored on a five-point scale for five periods up to 2020. Built entirely from published figures, so anyone can rebuild it.

Marketization in North Korea is uneven: prices escaped state control long before ownership did, and finance has barely moved at all. This index separates those dimensions rather than averaging them away. It follows the method of Jung, Yang and Kim (2022), which scored three periods from a survey of 842 defectors, and applies it to the much larger survey published by the Ministry of Unification in 2024 — 6,351 defectors, grouped by the year they left. That gives five periods instead of three, and one more of them falls after Kim Jong Un came to power.

The index

Five measured periods, connected. Each period is a different group of respondents — people who left North Korea in those years — but what they describe is one continuous economy. Hover a point for the sub-scores behind it.

Reading the score

The score is a rescaled percentage and nothing more. Each indicator is the share of respondents who report some market behaviour — buying inputs at market prices, hiring someone privately, selling a home — and that share goes onto the scale as 5 × percent / 100. So multiply by 20 to read it back as a percentage: a 5 would mean every respondent reported it, and 1 means one in five did.

Read that way, price liberalization at 2.91 in 2016–2020 says that across its two sub-areas about 58% of respondents describe market pricing; privatization at 1.09 says 22%; financial development at 0.28 says under 6%. The scale has no built-in judgement about how much marketization is “a lot” — it only reports how widespread each behaviour was.

What the index shows

The ordering is the same one the 2022 paper found: price liberalization is furthest along, privatization follows, finance trails badly. That it reappears in a different survey is reassurance that the ordering is a feature of the economy and not of one questionnaire. The gap between them is wide — by 2016–2020 market pricing is something most respondents describe, while private ownership is a minority experience and formal banking is almost nobody's.

The movement is in privatization. It rises without pause across all five periods, and fastest in the last one — 0.76 to 1.09 between 2011–2015 and 2016–2020, the years of the heaviest sanctions. Whatever those sanctions did, they did not slow the transfer of state assets into private hands. Price liberalization, by contrast, flattens out near 2.9. Finance stays close to the floor throughout: the share of people keeping savings in a bank actually falls from 5.7% to 0.8% before recovering slightly, so what growth there is comes entirely from private lending.

A caution about the top line: the household half of price liberalization (A2) sits above 90% by 2011 and cannot rise much further, so it stops discriminating between periods and holds the dimension up. The same saturation affects the 2022 index, which had the same two-part structure.

Download

The index file carries the three dimension scores and the seven sub-area scores for each period. The indicators file carries the thirteen underlying percentages, under both an English name and the report’s own Korean wording, so you can rebuild the index or rebuild it differently. Both are UTF-8 with a byte-order mark, so Excel opens them without mangling the Korean.

How the index is built

Thirteen survey percentages feed seven sub-areas, which feed three dimensions. At each step the aggregation is an unweighted mean, and percentages are put on the five-point scale as 5 × percent / 100. Nothing is weighted. The 2022 paper argues that assigning weights without data to justify them would introduce as much error as it removes, and that reasoning carries over unchanged.

Eleven of the thirteen indicators are the paper's own. The other two are not in the Ministry of Unification's public report, so the closest items it does include stand in. The paper measured household price liberalization (A2) by whether people had run into price controls at markets; here it is the share buying goods at market rather than state prices. The paper measured informal finance (C1) by borrowing from a donju; here it is borrowing from any lender outside the family. The A2 substitution is why price liberalization falls across 2006–2010 in the paper but rises here.

Where each indicator comes from

Figure numbers refer to the Ministry of Unification report. Respondent counts are given per period because they vary a great deal between questions, and some are small.

Two of these deserve a warning. C2 rests on 53 and 109 respondents in the first two periods, which is too thin to carry much weight. And the report itself cautions that respondents may not recall the share of output sold at market prices at all precisely, which affects A1.

Citation

Please cite the method paper, and the report the data comes from:

@article{jung2022measuring,
  author  = {Jung, Seungho and Yang, Moon-Soo and Kim, Byung-Yeon},
  title   = {Measuring North Korean Marketization: An Index Approach},
  journal = {Asian Perspective},
  volume  = {46},
  number  = {2},
  pages   = {195--223},
  year    = {2022},
  doi     = {10.1353/apr.2022.0009}
}

Source data: Ministry of Unification (2024), 북한 경제·사회 실태 인식보고서 (Report on Economic and Social Conditions in North Korea), Seoul. The index series compiled here is released under CC BY 4.0; please credit both this page and the Ministry of Unification report.

Updates

The index gains a period when a new survey round is published, not on a fixed schedule; the current source stops at those who left in 2020, so the border-closure years are not yet covered. Questions, or corrections: shjung@inu.ac.kr.