Analyzing North Korea's Decision-Making Process on its Nuclear

316 Pages·2010·3.13 MB·English

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This product is part of the Pardee RAND Graduate School (PRGS) dissertation series.
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Analyzing North Korea's
Decision-Making Process
on its Nuclear Weapons
Programs with the Rational
Choice and Cognitive
Choice Models
Ki-Tae Park
This document was submitted as a dissertation in June 2010 in partial
fulfillment of the requirements of the doctoral degree in public policy analysis
at the Pardee RAND Graduate School. The faculty committee that supervised
and approved the dissertation consisted of Bruce W. Bennett (Chair), Jefferson
Marquis, and Chaibong Hahm.
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PREFACE

This dissertation was submitted to the Pardee RAND Graduate School in 2010 in
partial fulfillment of the requirements for the degree of Doctor of Philosophy in Policy
Analysis.
There has been much research attempting to explain North Korea’s strategic
actions and decision-making processes. However, most of these studies were one-time
analyses that emphasized direct relationships between North Korea’s current situation
and its strategic actions—a type of analysis that precludes understanding systemic and
long-lasting causal relations. Furthermore, these studies have primarily employed a
rational choice theory-based framework, in particular, Expected utility theory, in which
the net expected utility derived from a linear combination of subjective value and the
probability of each option is the key determinant in decision-making. As a result,
observers have witnessed frequent anomalies in North Korea’s strategic moves (e.g.,
risky behaviors regardless of its strategic cost-benefit analysis), which cannot be
adequately explained by the rational choice model.
To understand these differences between theory and the real world, this research
begins with a search for an alternative analytical framework. Prospect theory, which
seeks to understand the cognitive decision-making processes of an individual under risk
conditions, is presented as an alternative. In prospect theory, the net prospective utility,
derived from a non-linear combination of the expected value and probability of each
option, is the key determinant in decision-making. In particular, certain aspects of
individuals’ cognitive decision-making—loss aversion, the endowment effect, and the
framing effect—play a significant role in determining net prospective utility in the
cognitive choice model.
Considering the significant explanatory power of expected utility theory which
has been established in other interstate conflicts over the last several decades, a robust
approach will be to incorporate the two different decision-making models (rational and
cognitive choice) into the same analytical framework. This research will thus analyze
selected cases with the theoretical arguments of each model, identify the strengths and
iii
weaknesses of each, and determine the conditions under which each model has greater
explanatory power.
In order for these two models to be used in a single analytical framework, this
dissertation must identify a method for determining which model is most appropriate in a
given situation. This research tests hypothesis that asserts that North Korea’s strategic
situation or position—identified as the domain of gains or of losses—will determine
which decision-making model will be more effective. After testing these hypotheses
against a series of North Korea’s strategic moves over the last several decades, this
dissertation finds that in the domain of gains, North Korea’s actions are predicted by the
rational choice model, and that in the domain of losses, North Korea’s actions are
predicted by the cognitive choice model.
Based on these results, this dissertation recommends that the ROK-US combined
forces establish a rational deterrence strategy against North Korea when it is in the
domain of gains—building credible and capable deterrence means, mainly composed of
offensive capabilities, in an attempt to convince Pyongyang that its provocation will
surely face catastrophic consequences. Conversely, when North Korea is in the domain of
losses or in a desperate situation, this dissertation recommends establishing a cognitive
deterrence strategy—constructing coercive means to deny its strategic and military
objectives. These means will require a mix of highly reliable and credible defensive (e.g.,
intelligence systems exploiting the cutting edges of Unmanned Aerial Systems, missile
defense systems incorporating all layers of defense, and anti-artillery systems capable of
disrupting North Korea’s long-range artillery and MLRS) and offensive (e.g., tactical and
strategic air interdiction forces aimed at neutralizing North Korea’s operational and
highly-valued targets) capabilities, to make clear to Pyongyang that its military
provocations will never succeed.
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CONTENTS

PREFACE---------------------------------------------------------------------------iii
FIGURES---------------------------------------------------------------------------viii
TABLES-------------------------------------------------------------------------------x
ABSTRACT-------------------------------------------------------------------------xi
ACKNOWLEDGEMENT------------------------------------------------------xiii
ACRONYMS and GLOSSARY------------------------------------------------xiv

Chapter 1: Introduction
1. Research Motivation and Objectives------------------------------------------------1-1
2. Research Questions---------------------------------------------------------------------1-3
3. Outline-------------------------------------------------------------------------------------1-6

Chapter 2: Literature Review
1. Decision-Making Models
a. Expected Utility Model---------------------------------------------------------2-2
b. Group Decision-Making Model------------------------------------------------2-4
c. Cognitive Choice Model--------------------------------------------------------2-7
2. Previous Studies on North Korea(NK)’s Decision-Making Process
a. Studies Analyzing Leader’s Personalities------------------------------------2-9
b. Studies Analyzing Political Structure of North Korea--------------------2-10
c. Studies Analyzing the Influence of External Powers----------------------2-12
3. Selecting Alternative Models--------------------------------------------------------2-14

Chapter 3: Method of Analysis
1. Theoretical Framework----------------------------------------------------------------3-1
a. Rational Choice Model (RCM)------------------------------------------------3-2
i. History and Basic Concepts-------------------------------------------3-2
ii. Variants of the RCM ---------------------------------------------------3-5
iii. Subjective Expected Utility Model-----------------------------------3-6
iv. Summary and Decision Rules under the RCM---------------------3-7
v. Using the RCM----------------------------------------------------------3-7
b. Cognitive Choice Model (CCM)----------------------------------------------3-9
i. Primary Differences from the RCM----------------------------------3-9
ii. Lab Evidence of CCM’s Validity-------------------------------------3-9
iii. Key Concepts----------------------------------------------------------3-10
iv. Summary and Decision Rules under the CCM--------------------3-15
v. Using the CCM--------------------------------------------------------3-16
2. Establishing Hypotheses
a. Determining North Korea’s Domain of Actions---------------------------3-18
v
b. Summary of NK’s Domains, 1953-2009-----------------------------------3-24
c. Two Hypotheses on NK’s Behaviors in its Nuclear Programs-----------3-26
3. Hypothesis Testing Method
a. RCM: Net Expected Utility---------------------------------------------------3-29
b. CCM: Net Prospective Utility------------------------------------------------3-30
c. Evaluating Case Results
i. Qualitative Analysis--------------------------------------------------3-32
Indicators of the RCM-------------------------------------------3-33
Indicators of the CCM-------------------------------------------3-33
ii. Quasi-empirical Analysis--------------------------------------------3-33
d. Summary of Hypothesis Testing Procedures-------------------------------3-35

Chapter 4: Case Studies
1. Introduction
a. General Description of Method------------------------------------------------4-1
b. Hypotheses to be Tested--------------------------------------------------------4-3
c. NK’s Nuclear History, 1953-1993---------------------------------------------4-3
2. NK’s First Nuclear Crisis (2/1992-10/1994)
a. General Description------------------------------------------------------------4-10
b. Case Analysis-------------------------------------------------------------------4-14
i. Pyongyang’s Domain of Action-------------------------------------4-14
ii. Pyongyang’s Perception of the Status Quo(Reference Point)---------4-22
c. Predicting North Korea’s Behaviors ----------------------------------------4-23
i. Qualitative Analysis for NK’s First Nuclear Crisis
Rational Choice Model-------------------------------------------4-24
Cognitive Choice Model-----------------------------------------4-28
ii. Quasi-empirical Analysis for NK’s First Nuclear Crisis
Rational Choice Model-------------------------------------------4-33
Cognitive Choice Model-----------------------------------------4-35
d. Model Performance for Pyongyang’s Behaviors---------------------------4-39
i. RCM Performance----------------------------------------------------4-40
ii. CCM Performance----------------------------------------------------4-41
e. Conclusion: CCM has more explanatory power---------------------------4-42
3. NK’s Second Nuclear Crisis (10/2002-8/2003)
a. General Description------------------------------------------------------------4-45
i. Perceptions on the Agreed Framework (AF)----------------------4-45
ii. Slow Implementation of the AF, 10/1994-1/2001----------------4-46
iii. Bush Administration’s Change to US/NK Relations-------------4-49
b. Case Analysis
i. Pyongyang’s Domain of Action-------------------------------------4-52
ii. Pyongyang’s Perception of the Status Quo(Reference Point)---------4-61
c. Predicting North Korea’s Behaviors ----------------------------------------4-57
i. Qualitative Analysis for NK’s Second Nuclear Crisis
Rational Choice Model-------------------------------------------4-66
Cognitive Choice Model-----------------------------------------4-69
vi
ii. Quasi-empirical Analysis for NK’s Second Nuclear Crisis
Rational Choice Model-------------------------------------------4-72
Cognitive Choice Model-----------------------------------------4-74
d. Model Performance for Pyongyang’s Behaviors
i. Both Models predict Escalation Strategy--------------------------4-76
ii. Behavior inconsistent with RCM-----------------------------------4-77
iii. Behavior predictable by CCM---------------------------------------4-78
e. Conclusion: CCM has more explanatory power---------------------------4-80
4. NK’s First Nuclear Test (10/2006)
a. General Description------------------------------------------------------------4-81
b. Case Analysis
i. Pyongyang’s Domain of Action-------------------------------------4-85
ii. Pyongyang’s Perception of the Status Quo(Reference Point)---------4-87
c. Predicting North Korea’s Behaviors
i. Qualitative Analysis for NK’s First Nuclear Test
Rational Choice Model-------------------------------------------4-95
Cognitive Choice Model---------------------------------------4-101
ii. Quasi-empirical Analysis for NK’s First Nuclear Test
Rational Choice Model-----------------------------------------4-105
Cognitive Choice Model---------------------------------------4-107
d. Model Performance for Pyongyang’s Behaviors
i. RCM and CCM Agree: Escalate Tensions----------------------4-109
ii. Discussion-Results contradict Hypothesis------------------------4-110
5. NK’s Second Nuclear Test (5/2009)
a. General Description----------------------------------------------------------4-111
b. Case Analysis
i. Pyongyang’s Domain of Action-----------------------------------4-113
ii. Pyongyang’s Perception of the Status Quo(Reference Point)-------4-121
c. Predicting North Korea’s Behaviors
i. Qualitative Analysis for NK’s Second Nuclear Test
Rational Choice Model-----------------------------------------4-122
Cognitive Choice Model---------------------------------------4-129
ii. Quasi-empirical Analysis for NK’s Second Nuclear Test
Rational Choice Model-----------------------------------------4-133
Cognitive Choice Model---------------------------------------4-135
iii. Model Performance for Pyongyang’s Behaviors
CCM is more correct--------------------------------------------4-137
Certainty Effect Excludes All-out War-----------------------4-137
Discussion--------------------------------------------------------4-138
6. Summary and Policy Implications
a. Cognitive Choice Model is strongly predictive---------------------------4-139
b. Implication: Rational Deterrence Likely to be Ineffective--------------4-140
c. Establishing Effective Deterrence------------------------------------------4-140

vii
Chapter 5: NK’s Asymmetric Assets and Coercive Strategies
1. Revisiting North Korea’s Decision-Making Process-----------------------------5-1
2. NK’s Asymmetric Assets and Nuclear Scenarios---------------------------------5-6
a. Pyongyang’s Asymmetric Assets----------------------------------------------5-7
b. Pyongyang’s WMD------------------------------------------------------------5-17
c. Pyongyang’s Potential Nuclear Scenarios----------------------------------5-30
3. Coercive Strategies for Dealing with North Korea
a. Overview
i. Cold War Deterrence Strategy will be ineffective----------------5-36
ii. Coercive Strategy is a more suitable alternative------------------5-37
iii. Definition and Theoretical Foundation of Coercion--------------5-37
iv. Superiority to Deterrence for regional adversaries---------------5-38
b. Requirements for Successful Coercion
i. Escalation Dominance------------------------------------------------5-41
ii. Threatening to Defeat North Korean Military Strategy----------5-42
iii. Magnifying Third-Party Threats to the NK Regime--------------5-44
c. Detailed Coercive Strategies--------------------------------------------------5-46
i. Punishment Strategy--------------------------------------------------5-48
ii. Risk Strategy-----------------------------------------------------------5-51
iii. Decapitation Strategy-------------------------------------------------5-54
iv. Denial Strategy--------------------------------------------------------5-56
d. Summary: All Coercive Strategies must be considered-------------------5-59

Chapter 6: Conclusion and Policy Recommendations
1. Overview----------------------------------------------------------------------------------6-1
2. Policy Recommendations
a. North Korea in the domain of gains
i. Possible Scenarios -----------------------------------------------------6-2
ii. Recommended Strategy: Deterrence with Punishment------------6-2
iii. Summary-----------------------------------------------------------------6-6
b. North Korea in the domain of losses------------------------------------------6-6
i. Framing Effect is of Primary Importance---------------------------6-6
ii. Possible Scenarios------------------------------------------------------6-7
iii. Recommended Strategy: Coercive Denial---------------------------6-7
iv. Summary---------------------------------------------------------------6-10
c. North Korea in desperate situation
i. Possible Scenarios-----------------------------------------------------6-10
ii. Recommended Strategy: Decapitation and Punishment---------6-10
iii. Summary---------------------------------------------------------------6-12

Bibliography
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