Maneesh Gulati Political Science 472 June 20, 1996 North Korean Insecurity: Causes of Crisis Escalation Recent developments in the Korean Peninsula have served to escalate an already tense standoff into an almost intolerable crisis. The United States government (USG) has opted to pursue a policy of reassurance and deterrence in order to combat North Korean aggression. The dual aspect policy seeks to initially deter further hostility from the Democratic PeopleUs Republic of Korea (DPRK) through intensified demonstrations of capabilities and commitment to the security of the Republic of Korea (ROK). Complementary to this deterrent posture, the policy of reassurance seeks to simultaneously indicate US benign intentions in order to alleviate DPRK fears, contingent on the communist regimeUs retreat from its policy of aggression. The USGUs policy emerges from theoretical guidelines outlined in the classical theory of deterrence and the postulateUs assumptions of challenger rationality. USG unmotivated biases lend decision makers to believe that their policy of deterrence and reassurance are perceived as intended while dismissing the psychological factors that currently affect North Korean perceptions of signals. The complexity of the USGUs policy serves only to complicate the interpretive processing of signals as intended and, consequently, encourages a psychological tendency of selective perception on the part of North Korean leaders. The DPRKUs communist regime, facing severe domestic economic and political crises as well as a perceived threat from the international community, feels that it needs to pursue an aggressive foreign policy to maintain its existence, ideological sovereignty and independence. The North Korean government believes that internal instability and external threats to its existence, necessitate the adoption of an aggressive policy. In accordance with theoretical assumptions underlying prospect theory and the loss aversion principle, North Korean actors will incur greater risks in order to avoid losses. Convinced of the need to pursue an aggressive foreign policy laden with potentially devastating risks, North Korean actors affected by motivated biases have, in turn, convinced themselves that their foreign policy goals are attainable, . It is the responsibility of the USG to lift North Korea out of its basement of fear and retreat from an intimidating deterrent posture which only serves to increase North Korean decision makersU perceived need for aggression. THEORETICAL PERSPECTIVE Deterrence/ Rationality According to the classical theory of deterrence, an actor, hereto referred to as the defender of the status quo, seeks to prevent or persuade another actor, the challenger of the status quo, not to take a certain action. Successful deterrence is based on the ability of the defender to first, clearly define his deterrent threat, second, communicate the threat, third, demonstrate the capability to defend the threat and fourth, demonstrate resolve or a commitment to following through on the threat. Classical deterrence theory rests heavily on the assumption of rationality of actors implying the assumption of a challengerUs ability to clearly perceive threats as intended by the defender. Rationality is here defined, in economic terms, as the utilization of coherence and consistency in pursuit of the maximization of welfare and benefits. Irrespective of cultural or subjective differences that may effect the actual interests or values involved as an end, the ability of an actor to pursue those means necessary to accomplish those values deemed of utmost importance, is the defining quality of rationality. Proceeding in a manner to uphold and further these values is the critical criteria of rational action. Although in particular situations the preferred option may not be achieved, rational action should achieve Rexpected value maximizing outcomes over the long run.S As well, rationality can not be defined as an all or nothing value; instead, rationality must be judged on a continuous scale, in which varied degrees exist. Motivated and Unmotivated Biases as Restrictive on Rationality Whereas classical deterrence theory relies heavily on the assumption of rational action, the theory fails to account for those psychological factors or biases that hinder purely rational action and, therefore, is observed as Rpsychologically bankruptS. Examination of recent historical examples of situations of deterrence by Robert Jervis has indicated that even in cases where the defender of the status quo has, from an objective perspective, demonstrated a clear and credible threat, challengers occasionally defy the threats, instead pursuing aggressive action. There appears to be a psychological factor that constrains a rational response to a stimulus, in this case, to a threat. Unmotivated biases arise out of restrictions on human comprehension of complex and ambiguous information which, in turn, impose a need to circumvent a thorough deductive procedure in favor of short-cuts to rationality. An actor whose cognitive thinking is tainted by unmotivated biases perceives that which he expects to see instead of perceiving the intended message. Actors, especially decision makers, need to simplify analysis of information. This need has the effect of transforming the decision making process into a theory driven procedure, thereby allowing for preconceptions or expectations based on similar historical situations to alter interpretations of signals. An important factor in unmotivated biases is availability, a dimension of decision making that describes an actorUs perceptions to be dominated by those patterns that Rcome to mindS. Jervis states, RWhat is highly available to a decision maker is his own plans and intentions. He will see the behavior of others in light of what he is thinking of doing himself and will use his own procedures and approaches to interpret what they are doing.S Motivated biases arise when an actorUs needs dominate the decision making process and perception of signals. Situational imperatives dominate the thought process and, in turn, actors see what they want or need to see, defying other important signals in a subconscious act of wishful thinking. Motivated biases often act as a protective mechanism for actors, denying the actor information that would demonstrate the harsh reality of a situation. In many cases, motivated biases allow for a false sense of security to envelope an actorUs thought process, even to the extent of allowing an actor to believe that the adversary will allow the stateUs defiance to succeed. Challengers have been observed to succumb to motivated biases in that they are inner directed and tend to focus on their own needs, thereby dismissing the needs, interests and capabilities of defenders. An important psychological factor affecting defenders of the status quo is the assumption of both challenger rationality and challenger perception of the threat as intended. Defenders typically fail to comprehend or to even attempt to understand the situational imperatives or predispositions that alter a challengerUs rationality. Jervis indicates that decision makers act on two premises: (1) that reassurance demonstrating a non-belligerent, benign state of mind is unnecessary and (2) that interpretations of signals on the part of adversaries are inferred as intended. These assumptions, in and of themselves unmotivated biases, often allow for a degree of complacency to encompass the defenderUs strategic involvement with the challenger and, consequently, the defender is often surprised by the challengerUs response. Historical Setting Only weeks before the conclusion of World War II, the USG and the Soviet Union arbitrarily divided Korea along the 38th parallel in what was intended to be a temporary joint trusteeship of the peninsula. An agreement in December of 1945 between the two superpowers outlined a joint trusteeship of no more than five years, during which time a provisional government was to be organized. The agreement was essentially irrelevant, however, since Rthe de facto policies of the two occupations had identified the Soviets with Kim Il Sung... while the Americans backed Syngman Rhee.S In 1947, the US reversed its policy toward the Korean peninsula with the intent to contain communism within the region. The USG saw the resistance of communism as integral to engage and revive Japan and as a result the Republic of Korea under RheeUs leadership was created. In !948 while the ROK was being established, Kim Il Sung was assuming power in the newly formed DPRK. With the eruption of the Korean War in the summer of 1950, the US sought not to simply contain communism but to retake North Korea and unify the Koreas under RheeUs leadership. The USGUs attempt to reunify Korea failed, however, when China intervened on the side of North Korea. With the conclusion of the Cold War in 1953, nothing had been accomplished; the stalemate across the 38th parallel remained and America again found itself committed to a strategy of containment of communism. It was for this reason that the US continued to station troops along the DMZ. No peace treaty was signed at the conclusion of the Korean War and so technically both the Koreas remain at war to this day. The Armistice Agreement, however, was signed by the US and North Korea. The agreement created a 2.5 mile wide demilitarized zone between North and South Korea in which limited military personnel are allowed to enter. Tensions reemerged in the Korean Peninsula in 1984 when intelligence activities revealed that North Korea was pursuing an active program of weapon development, although it is believed that the actual program began in 1980. As a result of pressure from the Soviet Union, the DPRK joined the Nuclear Nonproliferation Treaty (NPT) in December of 1985. In 1992, North Korea officially declared its possession of nuclear material, but during an inspection by officials from the International Atomic Energy Agency (IAEA), it was discovered that the North Korean government had lied about the extent of its nuclear holdings. Pressured by demands for further inspections, North Korea withdrew from the NPT in 1993. Further relevant information from that point on will be discussed in greater detail throughout the paper. US Interests Before delving into a discussion on US policy and its efficiency it is necessary to discuss what interests the USG seeks to achieve in East Asia. Foreign policy interests are subdivided into two categories, strategic and intrinsic, both of which are interrelated in that they reinforce each other. Strategic interests involve beliefs and values such as credibility, security, ideology and morality whereas intrinsic interests involve tangible gains of monetary and physical value such as oil and land. US foreign policy, especially with regard to East Asia, has focused on achieving strategic interests. The USGUs desire for maintained global dominance is of utmost importance and underlies all US policy. The initial draft of the PentagonUs Defense Planning Guidance for Fiscal Years 1994-1999, leaked to the media in March of 1992, stated, RWe must account sufficiently for the interests of the large industrial nations to discourage them from challenging our leadership or seeking to overturn the established political or economic order... We must maintain the mechanisms for deterring potential competitors from even aspiring to a larger regional or global role.S Buttressed in this global leadership interest in the Post Cold War era, the US has focused on a geopolitical dominationist strategy centering on East Asia. The US seeks intermediary interests as a means to secure and maintain this strategic interest of global and geopolitical leadership. Secretary Warren Christopher outlined those national interests that serve as pillars for the ultimate US hegemonic interest in East Asia: maintenance of core alliances; pursuit of engagement; formation of a regional balance of power to promote integration, stability and US economic interests; regional compliance to the NPT; and promotion of democratic values. In reviewing these interests it is curious to note first, that most of these interests, with the exception of the economic goals, are strategic in nature and second, that all these values serve to advantage the USG in its pursuit of sustained global leadership. Several of these interests require further discussion as a result of their direct relevance to US policy toward Korea. Maintained security is seen as critical in East Asia, since, by nature, it serves as a prerequisite for the pursuit of all other interests. Ambassador Winston Lord, the Assistant Secretary of State for East Asian and Pacific Affairs, described the critical importance of the Korean peninsula in maintaining regional security, R... the Korean peninsula is rightly considered perhaps the most serious risk for full scale conflict involving U.S. troops. Consequently a key objective of US policy must continue to be the preservation of security and peace on the Korean peninsula.S Complementary to the interest of security in the Pacific region is the need to stem the proliferation of nuclear, biological and chemical weapons. RThe National Security Strategy of Engagement and Enlargement,S a White House report to define long-term, post-Cold War strategy, stressed the need of the US to sustain counterproliferation activities in accordance with the NPT and Missile Technology Control Regime (MTCR) (RThe White House Issues its Major Report on the National Security StrategyS). The third aspect of US interests in East Asia focuses on economic goals. President Bill Clinton stressed the intrinsic US economic interests in Asia in a recent speech following his April 1996 meeting with South Korean leader, Kim Yong-Sam, R...a lot of our ticket to the future economically is in the Asian Pacific region as well. It already accounts for a quarter of the worldUs output, growing every day. Already more than half our trade is with the nations of the Pacific, sustaining three million good American jobs.S Certainly US strategic leadership interests require continued engagement in East Asian affairs. US POLICY TOWARD NORTH KOREA The United States government (USG) has focused on a mixed policy of deterrence and reassurance in its relationship with North Korea. The USG has decided that in order to achieve its strategic interests of regional stability in East Asia, it must, first and foremost, deter any aggressive action from an unstable North Korea while simultaneously offering concessions as confidence building measures. James T. Laney, the US Ambassador to South Korea recently indicated US intentions of both deterrence and reassurance at an international seminar on Korea, RSince deterrence alone does not address the factors that most threaten stability on the [Korean] peninsula today, it must be augmented with confidence building assurances and positive inducements to cooperation.S Ambassador Robert Gallucci, Ambassador at Large, further echoed US intentions in a recent press conference in Seoul, RIn present circumstances, humanitarian aid, military deterrence and opening North Korea to fresh winds of change all go together.S Deterrent measures and demonstrations of reassurance are by no means mutually exclusive and, therefore, US policy is not contradictory. In fact such a policy, in many situations, can help alleviate a challengerUs overestimation of hostilities by indicating the defenderUs benign intentions. Whether or not, however, a mixed policy of deterrence and confidence building measures can demonstrate the USGUs benign intentions to an isolated and vulnerable state like North Korea is questionable and will be the focus of discussion in this paper. First we will seek to outline the USGUs mixed policy of deterrence and reassurance. Deterrence The United States has maintained a strong deterrent posture toward North Korea since the conclusion of the Korean War. In fact, congressmen in support of the Agreed Framework, bragged early in 1995 that the USG Rquietly but systematically upgraded [the USG] deterrent posture and today, the US is in the strongest position militarily than it has ever been with regard to the DPRK.S The US presently stations over 37, 000 troops in South Korea, indicative of the USGUs commitment to the defense of South Korea. The troops serve as a Rtrip wireS to North Korean attack and, therefore, ensure US involvement in any conflict in the Korean Peninsula. Early in 1995 the USG delayed its planned phased withdrawal of US troops from the region. In December of 1995, dozens of warplanes from American Military bases in Japan were reported to have participated in military exercises in South Korea. Some accounts indicate that the warplanes practiced nighttime blows at North Korean territory. Most recently, on June 4th and 5th of this year, Pyongyang reported that the US and South Korea took part in military exercises Rto conduct aerial espionageS. Recent developments have served to further increase USG deterrent posture in the region. In April of this year, Clinton further demonstrated his commitment to the defense of South Korea by sending his top defense officials and US warships to the area. South Korea is reportedly purchasing advanced weapons from the United States. As well, the US military forces have placed Rtwo electrified fences topped with razor wire, a minefield and a huge concrete antitank wallS along the 151 mile long demilitarized zone separating the two Koreas. US Defense Secretary William Perry indicated that USGUs Rcontingency plans, in particular [the USGUs] contingency plan which involves the defense of South Korea, has land mines used in a fundamental way.S Of greater import to US deterrent measures has been their verbal articulation of the USGUs commitment to the defense of South Korea. In November of 1993, President Clinton articulated US resolve, RI know of no one who seriously believes that the United States and the Republic of Korea would be defeated in a war of aggression by North Korea if they were to attack. And I made it as clear as I could that if they were to do that , they would pay a price so great that the nation would probably not survive as it is known today.S On numerous occasions since ClintonUs 1993 meeting with Kim Yong-Sam and most recently at an April meeting with the South Korean leader, Clinton reaffirmed the USG commitment to the defense of South Korea. In reviewing American deterrent policy, one observes that US policy is focused on attempting to deter Korean aggression through threat of punishment as opposed to through denial. Although the fences, antitank wall and sale of missile defense capabilities to South Korea serve as a source of deterrent denial of aggressive action, US policy, for the most part, has served to flex US military muscle and demonstrate US resolve to annihilate North Korea in the event of Korean conflict. Clinton in his press conference with Kim Yong-Sam sought to deter North Korean aggression by stressing both US capabilities to defeat North Korea as well as US resolve to utilize these capabilities, clearly demonstrating the USGUs policy of deterrence through threat of punishment. Of greater importance in discussion of ClintonUs attempt at deterrence was the vague nature of the threat. The ambiguity of the threat brings into question whether the US intends to use nuclear weapons in a conflict with North Korea. By stating that North Korea would cease to exist Ras it is known todayS while leaving the role of nuclear weapons in achieving this end unclear, Clinton serves to increase North Korean insecurity, an aspect of US deterrent policy that will be discussed in more detail later in this paper. Sanctions The USG has utilized a complementary policy of sanctions toward North Korea. Although US sanctions have not focused on either trying to compel or deter the communist regime, the US policy still remains relevant to deterrence policy in that both are a negative, punitive policy, as opposed to the dimension of international relations involving positive rewarding policy. US economic and diplomatic sanctions against North Korea are rooted in two very different sources of contention. At the start of the Korean War in 1950 the USG imposed economic sanctions against North Korea following guidelines set forth in the RTrading with the Enemy ActS. The sanctions were imposed as a punitive measure in response to both the communist nature of North Korean rule as well as the North Korean initiation of conflict with South Korea. Complementary to US economic sanctions is the USGUs refusal to recognize North Korea, with the implication of US denial of diplomatic and ambassadorial level relations with the communist regime. The second source of contention justifying US economic and diplomatic sanctions is the USGUs categorization of North Korea as a state sponsor of terrorism. Despite the fact that North Korea has not assisted in any terrorist act since 1987 (when it sponsored a mid-flight bombing of a KAL airliner) and the DPRKUs insistence that it is opposed to Rall kinds of terrorismS and Rany assistance to itS, the April 1996 release of R1995 Patterns of Global TerrorismS still categorized North Korea as a state sponsor of terrorism. As outlined in that report, the USG will consequently Rbring maximum pressure on states that sponsor and support terrorists by imposing economic, diplomatic and political sanctions.S By understanding the nature of US economic sanctions, we can attempt to infer the goals sought by the USG in imposing these measures. US diplomatic and economic sanctions appear to be retributive in nature. Professor Raymond Tanter defines retributive sanctions based on the following criteria, RIf the main purpose of the sanctions is to oppose a regime or to right a wrong, retributive justice is at work.S Retributive sanctions act in a punitive manner in an attempt to change another stateUs behavior. Rehabilitative sanctions, on the other had, are imposed Rin response to a particular transaction.S Sanctions imposed on North Korea in 1950 are strictly retributive in that they demonstrate opposition to the North Korean communist regime; the sanctions seek to punish North Korea and are targeted generally at the regimeUs behavior. Analysis of the sanctions imposed as a result of terrorist activity offers a more difficult dilemma. Although the sanctions are in response to a particular transaction, a closer look indicates that, in fact, the sanctions may be based on retributive justice. Despite the fact that North Korea has not engaged in any act of terrorism for nearly a decade and has repeatedly indicated its opposition to such activity, the US still categorizes the regime as a sponsor of terrorism. As such, the sanctions may seek to punish North Korea, focusing on the USGUs more broad opposition to the communist regime, instead of on what weakly remains of a terrorist policy. Strategic Reward/ Concessions The third pillar of US policy toward North Korea focuses on offering strategic rewards and concessions to the DPRK in an effort to reassure the communist regime of the USGUs benign intentions. Seeking to demonstrate a non-belligerent policy and help lift North Korea out of itUs self-perceived vulnerable and isolated state, the US has attempted to complement its deterrent and sanctionary posture with policies of reassurance. In 1992 the USG initiated this concessionary aspect of its mixed policy by removing US tactical nuclear weapons from the ROK. Subsequent to this act, the USG reinforced its commitment to a nuclear free peninsula through private assurances of the removal of weapons as well as offering the DPRK the opportunity to inspect US facilities in South Korea. It is important to note, however, that the US has maintained the organizational infrastructure and personnel training sessions necessary for nuclear operation in Korea. In October 1994, in one of the greatest diplomatic successes with North Korea in recent history, the USG momentarily quelled a brewing crisis in the Korean Peninsula through offers of a series of strategic rewards that culminated in the Agreed Framework. In exchange for North KoreaUs promise to freeze its nuclear activities, both civilian and military, the US offered over six billion dollars in aid and consideration for future concessions, contingent on North Korean behavior. One major aspect of the agreement hinged on the DPRKUs replacement of already existing gas graphite nuclear reactors with light water reactors. The USG offered to assume responsibility for arranging financing and construction of the light water reactors, with the ROK shouldering most of the actual financial burden, on the condition that North Korea obtained a clean bill of health from the International Atomic Energy Agency (IAEA) . As a strategic reward, the US persuaded North Korea to discontinue existing nuclear facilities, although this exists as a right under the NPT, offering heavy oil shipments as an alternate energy source. As a third strategic reward, the USG promised to commence normalization of diplomatic and economic relations with North Korea, contingent on North Korean compliance with the Framework. US policy during the Agreed Framework negotiations centered on the application of a carrot and stick strategy to formulate an agreement that would ensure North Korean adherence to US demands. The US offered numerous carrots in the form of economic incentives and potential diplomatic concessions. As a result of the USGUs openness to concessions, negotiators succeeded in drawing out North Korean promises of compliance to existing nuclear treaty obligations. Although the framework served only to assure North Korean compliance with already existing treaty obligations and temporarily quell an emerging crisis, the discussions, on a broader scale, serve as a breakthrough for future negotiations. The Agreed Framework, by no means, serves as an answer to American political conflict with North Korea, but instead offers a starting point from which the USG can build. Ambassador Winston Lord, echoed such beliefs in his recent testimony to the House Committee on International Relations, RThe Agreed Framework has frozen the NorthUs nuclear program in its tracks. It has put us on a path to attain all our strategic objectives, supporting the international nonproliferation regime and enhancing security and stability in Northeast Asia.S A third important effort of reassurance of benign intentions on the part of the USG was its commendable contribution of two million dollars in food aid to North Korea following devastating floods that destroyed crops and inflicted conditions of famine and economic turmoil on North Koreans. Nicholas Burns, at a briefing for the United States Department of State, clarified US intentions in offering aid, RThis is a humanitarian issue. ItUs not a political issue.S US efforts to reduce devastating economic and living conditions in North Korea serve an important role in attempting to reassure North Korea of benign US intentions. By separating this humanitarian issue from political conflict between the two countries, the USG attempted to indicate to the DPRK that it did not seek the collapse of North Korea, a policy that would have been better served by allowing domestic instability to destroy the communist regime, at least in the eyes of North Korean leaders. NORTH KOREAN AGGRESSION IN TERMS OF PROSPECT THEORY- A THEORETICAL PERSPECTIVE North Korean Aggression North Korean activity over the past thirty months has been characterized by belligerent displays of military might. Since the death of Kim Il Sung in July of 1994, Kim Jong Il, Kim Il SungUs son, has delayed accession to a formal role of leadership. Under this relatively faceless government, the North Korean military has pursued a rather aggressive policy of apparent war preparation. As of December 1995, North Korea is believed to have deployed over 1.1 million troops along the border separating the two Koreas. The North Korean army is reported to have stationed offensive military weapons along the DMZ to within firing range of Seoul while deploying aircraft forces that could potentially reach Seoul in five to six minutes. While military troops along the border have taken part in numerous military exercises, Kim Jong-Il has made significant strides in streamlining and modernizing the High Command of the Korean PeopleUs Army (KPA), again in an apparent act of war preparation. On April 4 of this year, an official spokesman from Pyongyang declared that, Rthe KPA shall give up its duty, under the Armistice Agreement, concerning the maintenance and control of the military demarcation line and DMZ,S and, Ras a follow up step... have its personnel and vehicles bear no distinctive insignia and marking when they enter the joint security area of Panmujon and the DMZ.S North Korea justified its action by claiming that RpuppetS RSouth Korean authorities have persistently rejected our proposals and driven the situation to the brink of war under the protection of their master, the United States, so that [the DPRK] can no longer expect a negotiated solution... There is a limit to [DPRK] restraint and patience.R In the days following the announcement, April 5th to the 7th, North Korea deployed nearly 300 soldiers into Panmujon and the DMZ where they were reported to have built two covered communication trenches. During this first week following North KoreaUs unilateral withdrawal from the Armistice Agreement, the North Korean government further demonstrated its preparations for war as it staged a rally urging civilians to enlist in the army. Prospect Theory- an Overview Clearly recent North Korean military activity has demonstrated an aggressive policy of military exercises and preparation. What, however, has motivated such aggression, especially in light of US attempts at deterrence? To answer this question a discussion of prospect theory, introduced by Daniel Kahneman and Amos Tversky as an alternative to the expected utility/ rationality postulate is necessary. Whereas the expected utility principle asserts that decision makers seek to maximize expected utility by objectively weighing and pursuing options of both maximum utility value and probability of occurrence, prospect theory infuses psychological factors into the decision making process as an explanation for the failure of the expected utility principle to account for deviations in actual behavior. Prospect theory posits that decision makers seek outcomes in terms of a reference point as the critical variable and, in turn, individuals weigh losses as more significant than gains. The logical deduction of this postulate is that individuals act as risk acceptant for losses and risk averse for gains. Individuals tend to frame options in terms of deviations from a reference point. Although the status quo is commonly utilized at the reference point, on many occasions the reference point may actually be an aspiration point. The significance of the positioning of the reference point rests on the tendency of individuals to imbue greater resolve and acceptance of risks in order to avoid perceived losses than to achieve gains. The assumption behind this observed behavior is that individuals value what they possess more than that which they do not possess, a tendency known as the endowment effect. The endowment effect directly challenges assumptions in the expected utility principle which assert that an objective framing of preferences occurs lending to the pursuit of that option which maximizes expected utility. The application of prospect theory to international affairs helps explain escalation of aggression despite seemingly credible deterrent threats. The political implications of prospect theory indicate that individuals acting from a basement of fear resulting from perceived internal insecurity and external decline of status tend to pursue aggressive foreign policy. Actors believing that a loss, either in international or domestic affairs, is imminent, will feel a perceived need to pursue confrontational policies. Such actors will be more willing to incur risks associated with the aggressive foreign policy in order to avoid losses which otherwise appear certain. What may be perceived as a game of risk-taking, in a sense the rationality of irrationality in which the actor partaking in risk taking is believed to be acting irrationality to exact concessions, may, in fact, be desperation attempts to quell domestic instability and/or external insecurity. External threats manifest in a policy makerUs perception that a dramatic restructuring of the international balance of power, essentially a security dilemma, is imminent. A security dilemma is here defined as a situation in which one nation perceives that a zero sum security relationship exists with its adversary, a relationship in which one stateUs security necessarily implies the otherUs insecurity. Such actors perceiving potential shifts in its nationUs stability and role in the international arena feel pressured to react immediately and escalate hostility through aggressive demonstration of risk taking. Internal domestic pressure often manifests in an unstable political system or domestic economic chaos. Political leaders, pressured by such internal chaos perceive a need to divert domestic attention toward a legitimate or a contrived foreign hostility, regardless of the credibility of deterrent threats. Policy makers convinced of a need to accomplish foreign policy goals, as a result of either international security dilemmas or domestic legitimacy crises, in turn convince themselves that such goals are attainable, irrespective of adversial demonstrations of commitment or capability. Therefore, classical deterrence theory fails to account for empirical data suggesting that defendersU efforts to infuse resolve and credibility in their deterrent threats have minimal effect on actually deterring challengers. The ultimate source of adversial behavior of aggression and brinkmanship emerge, in fact, from their perceptions of external and internal political and strategic interests. North Korean Aggression Explained As Lebow suggests, two factors invoke a perceived need on an actor to pursue an aggressive foreign policy of crisis escalation: internal instability and external threats to international balances of power. The first, internal instability, arises from a decision makerUs belief that domestic crises may culminate in a regimeUs overthrow. North Korea presently suffers from severe economic devastation and social chaos, both of which are interrelated in that they reinforce each other. The 1995 floods decimated crops resulting in a shortage of nearly two million tons of grain, 500,000 homeless, and a famine crisis affecting nearly the entire North Korean population. The resulting devastation has created a sense of panic and urgency among North Koreans. Prior to the floods, the Korean economy was already facing severe restrictions as a result of North KoreaUs dual system of juche and a command direct economy. Juche is a system of self-reliance, essentially self-imposed economic, political and social isolation unique to North Korea. Exacerbating the economic limitations imposed by juche, the command direct economy restricts expansion and growth. Even more devastating is the fact that the socialist regime allots an extraordinary amount of money on military development, limiting expenditures on social and economic improvement. Indeed, as John Deutch, Director of the Central Intelligence Agency, indicates, RNorth KoreaUs large conventional force is an organ of internal security that is critical to the survival of the Kim Jong-il regime.S With the dissolution of the Soviet Union and the Warsaw Pact at the conclusion of the Cold War, North Korea found itself completely isolated economically and without any trading partners. Furthermore, China, as of recently, insisted on hard currency trading terms with North Korea, a requirement that will significantly disrupt the flow of trade between the two communist regimes. The social instability imposed by this economic chaos is evidenced by the recent dramatic increases in high level defections from North Korea. Major David Maxwell of the United States Special Forces describes the defections as indicative of both a Rtransferring of allegiance of the elite of North Korea away from the regimeS and an Rimpending breakdown of the status quo.S While North Korea is definitely a totalitarian state where, in most situations, the regime dominates not only individual activity but individual thought as well (through control of news reports and public broadcasts), recent radio broadcasts have made it evident that the Kim Jong-Il regime is definitely feeling the pressure of social instability. Feeling pressure to defend the North Korean economic system to the public, the Korean Central News Agency, controlled by the communist regime, has not only described North Korea as having Rthe best socialist systemS but has also blamed their economic problems on Western nations who have Rrestrained [North Korean] development through sanctions, blockade and military and economic pressure on the DPRK.S The North Korean government has also tried to dissuade potential defectors by describing capitalistic South Korea as Ra living hell based on jungle law, a society for thieves and swindlersS where defectors are Rmaltreated and harassed by savage investigation.S Most significant however, is the fact that Kim Il Jong has failed to take over the leadership role of North Korea since his fatherUs death nearly two years ago. Many analysts seriously doubt that Kim-Il Jong will be able to ever assume true control over the DPRK. Prospect theory posits that a regime feeling the pressure of internal instability may seek to avoid losses and divert public attention toward external threats. Levy states, RState officials may be tempted to engage in forceful action against external enemies in order to... distract attention from domestic politics. The temptation toward such diversionary action may be enhanced by risk acceptant attitudes in the domain of losses created by a deteriorating domestic situation... beleaguered political elites often adopt a Tfortress mentality [and] are particularly inclined to advocate external war for the purpose of domestic crisis management if chances are very doubtful.S This scenario seems to describe North KoreaUs domestic crisis very well. From the DPRKUs basement of fear, the North Korean regime feels a perceived need to seek an aggressive foreign policy. General Gary E. Luck, the commander of USA forces in South Korea voiced his concerns of North Korean diversionary tactics in March of this year, RWe worry that in a very short period, this country will either collapse or take aggressive actions against the South in a desperate attempt to divert attention from its internal situation. It is entirely possible that the leadership in Pyongyang is not, or will not remain, cohesive enough to make rational decisions.S Defense Secretary William Perry articulated similar concerns regarding aggressive North Korean action, RThe broader concern is that the North Korean economy is in terrible shape now. And this is causing... tremendous tensions and conflicts within the country. We have a continuing concern that the government in North Korea might respond in some sort of an irrational way to the problem... to simply keep themselves, keep the regime in power because of these great internal tensions.S A second independent factor contributing to a perceived need for North Korea to pursue an aggressive foreign policy is a perceived external threat to the DPRKUs sovereignty. North Korea is presently locked in a basement of fear and believes that RUS imperialistsS and their Rdominationist purposeS seek to eliminate North Korea entirely. North Korea perceives that the US Rsecurity strategy is aimed at permanently occupying South Korea and invading the DPRK.S Furthermore, North KoreaUs Foreign Ministry reported, RNow that the United States is scheming to bring the military adventure against our system into practice together with South Korea and Japan, we can not feel but exposed to threat and will invariably have to take countermeasures.S North Korea struggles as one of the last remaining relics of a once powerful communist bloc. With the dissolution of the Soviet Union and the Eastern Bloc and with China seeking an intensified relationship with South Korea, as noted by Chinese President Jiang ZeminUs recent visit to South Korea and his statement that the DPRK and China Rare not allied relations,S North Korea feels abandoned ideologically, militarily and economically. The DPRK envisions a world collapsing upon them with US dominationist forces leading the way. Senator Paul Simon describes North Korea as Rfeeling very isolatedS and in fear that a dramatic restructuring of the balance of East Asian power is imminent, with themselves left as a casualty. It is from this state of paranoia where North Korean political leaders may seek to engage in risky behavior in an attempt to avoid a perceived externally imposed collapse of the communist regime. Levy indicates that a tendency toward aggressive behavior Ris all the greater for a state which perceives itself to be in a zero sum relationship with its adversary.S Definitely North Korea perceives that such a security dilemma exists between itself and the US, one in which US security necessarily implies North Korean insecurity and vice versa. Believing that the United StatesU dominationist interests are in direct competition with North KoreaUs security interests, North Korea perceives a need to pursue an aggressive foreign policy and incur risks in order to avoid losses before their opportunity to do so is lost. North Korean leaders, whose perceptual biases lead them to overestimate US hostility through selective perception as described below, Rexpect losses unless [they] take strong if not aggressive action.S In summary, North Korean statesmen perceive that both external and internal factors are contributing to potential losses in North KoreaUs status. From this basement of fear, the DPRK leaders believe that its nationUs ideology, sovereignty and even presence are threatened by internal and external insecurity. Levy indicates that Rthe combination of perceived external decline and internal insecurity may be particularly conducive to risk seeking.S It is this fear that continued inaction would only serve to exacerbate decline and instability resulting in near certain collapse that invokes a perceived need for an actor to accomplish certain foreign policy objectives through aggressive measures. Specifically North Korea, describing Rindependence as its lifebloodS and the need for the KPA to Rcredibly defend the security of the socialist motherland and the happiness of the people,S frames its losses in terms of ideology, sovereignty and even existence as reference points and will act in risk acceptant manners to avoid losses in these areas. What may be otherwise perceived as brinkmanship, the rationality of irrationality, in which an actor appears to Rrock the boatS to exact concessions, may in fact be an act of desperation. Lebow states, RBrinkmanship in these cases was conceived of as a forceful response to this acute and impending danger, a means of preventing or even redressing the shift in the balance of power before time ran out and such a response became unrealistic.S Indeed, North Korean actors have and may continue to pursue an aggressive foreign policy laden with risks in order to avoid losses. But are North Korean policy makers acting rationally in terms of the expected utility principle? The DPRK leaders are not objectively weighing policy options in terms of what choices offer greatest probability of maximizing utility. Instead, in their psychological state of desperation and perceived need to ward off internal and external threats to regime stability and ideological sovereignty, the DPRK leaders are pursuing an aggressive foreign policy aimed at averting losses but also coupled with serious risks. What is of greater significance is that while North Korean leaders have convinced themselves that internal insecurity and external threats have imposed a need for aggressive foreign policy, these same leaders have also convinced themselves that their foreign policy goals are attainable. A US national security analyst was noted to have said, RThe problem is not that North Korea can defeat us, but that they think they can.S Steve Macko and Clark Staten, both of The American Reporter, continue, RIn their self imposed isolation, the North Koreans may be suffering from the delusion that they can actually win a conventional war against South Korea and the United States.S Lebow contends that such a motivated bias is common, RWhen policy makers become convinced of the necessity to achieve specific foreign policy objectives, they become predisposed to see those objectives as attainable.S As motivated biases generally do, these psychological protective measures serve to alleviate an actorUs response to the grim prospects of reality. FAILURE OF US MIXED POLICY US policy makers have chosen to adopt a Rnuanced combination of military deterrence and diplomatic engagementS in handling the North Korean crisis. Through such measures the US seeks to first, indicate US resolve and strength so as to prevent aggression and second, alleviate North KoreaUs fears so as to prevent the adversary from being pushed into a basement of fear where it believes that its weak unstable situation necessitates pursuit of hostile policy. As Lebow describes, such a mixed policy as adopted by the USG Rwould aim never to allow oneUs own state to be perceived as so weak or irresolute as to invite a challenge but at the same time to avoid encouraging an adversary to feel so weak or threatened that it has the need to do so.S While such a policy works ideally, it fails to take into account psychological factors that inhibit expression of a signal as intended. Such a complex policy hinders the simplification process required to send a clear message and, in fact, only serves to complicate the signal, increasing the likelihood of misperception. Furthermore, such a mixed policy of deterrence and reassurance fails to account for actors locked in a basement of fear who act irrationally perceiving not only what they expect to see, unmotivated biases, but also what they want to see, motivated biases. Such actors selectively observe certain signals while dismissing others, usually with the tendency to selectively observe and overestimate hostile acts while dismissing policies of reassurance. North Korea has clearly demonstrated this curious psychological behavior of selective perception. exacerbate decline and instability resulting in near certain collapse that invokes a perceived need for an actor to accomplish certain foreign policy objectives through aggressive measures. Specifically North Korea, describing Rindependence as its lifebloodS and the need for the KPA to Rcredibly defend the security of the socialist motherland and the happiness of the people,S frames its losses in terms of ideology, sovereignty and even existence as reference points and will act in risk acceptant manners to avoid losses in these areas. What may be otherwise perceived as brinkmanship, the rationality of irrationality, in which an actor appears to Rrock the boatS to exact concessions, may in fact be an act of desperation. Lebow states, RBrinkmanship in these cases was conceived of as a forceful response to this acute and impending danger, a means of preventing or even redressing the shift in the balance of power before time ran out and such a response became unrealistic.S Indeed, North Korean actors have and may continue to pursue an aggressive foreign policy laden with risks in order to avoid losses. But are North Korean policy makers acting rationally in terms of the expected utility principle? The DPRK leaders are not objectively weighing policy options in terms of what choices offer greatest probability of maximizing utility. Instead, in their psychological state of desperation and perceived need to ward off internal and external threats to regime stability and ideological sovereignty, the DPRK leaders are pursuing an aggressive foreign policy aimed at averting losses but also coupled with serious risks. What is of greater significance is that while North Korean leaders have convinced themselves that internal insecurity and external threats have imposed a need for aggressive foreign policy, these same leaders have also convinced themselves that their foreign policy goals are attainable. A US national security analyst was noted to have said, RThe problem is not that North Korea can defeat us, but that they think they can.S Steve Macko and Clark Staten, both of The American Reporter, continue, RIn their self imposed isolation, the North Koreans may be suffering from the delusion that they can actually win a conventional war against South Korea and the United States.S Lebow contends that such a motivated bias is common, RWhen policy makers become convinced of the necessity to achieve specific foreign policy objectives, they become predisposed to see those objectives as attainable.S As motivated biases generally do, these psychological protective measures serve to alleviate an actorUs response to the grim prospects of reality. FAILURE OF US MIXED POLICY US policy makers have chosen to adopt a Rnuanced combination of military deterrence and diplomatic engagementS in handling the North Korean crisis. Through such measures the US seeks to first, indicate US resolve and strength so as to prevent aggression and second, alleviate North KoreaUs fears so as to prevent the adversary from being pushed into a basement of fear where it believes that its weak unstable situation necessitates pursuit of hostile policy. As Lebow describes, such a mixed policy as adopted by the USG Rwould aim never to allow oneUs own state to be perceived as so weak or irresolute as to invite a challenge but at the same time to avoid encouraging an adversary to feel so weak or threatened that it has the need to do so.S While such a policy works ideally, it fails to take into account psychological factors that inhibit expression of a signal as intended. Such a complex policy hinders the simplification process required to send a clear message and, in fact, only serves to complicate the signal, increasing the likelihood of misperception. Furthermore, such a mixed policy of deterrence and reassurance fails to account for actors locked in a basement of fear who act irrationally perceiving not only what they expect to see, unmotivated biases, but also what they want to see, motivated biases. Such actors selectively observe certain signals while dismissing others, usually with the tendency to selectively observe and overestimate hostile acts while dismissing policies of reassurance. North Korea has clearly demonstrated this curious psychological behavior of selective perception. North Korea described US aerial intelligence gathering activities from South Korea as Ra sure sign that the US imperialists are watching for a chance to invade the NorthS despite PyongyangUs Rforthcoming policies.S Furthermore, in a clear demonstration of the failure of US mixed policy to achieve the goal of reassuring North Korean leaders of benign US intentions, Pyongyang reported, RThe US decision to keep forces in South Korea even after North Korea completely abandoned its military nuclear program was proof that the US had no intention of complying with the October 1994 agreement.S Pyongyang further described US security and deterrent strategy as Ra strategy for military aggression to realize the US dominationist purposeS and the RUS ambition to stifle the DPRK with strength and dominate the world.S US policy of continued sanctions seeking merely to punish North Korea through retributive justice further demonstrates to the paranoid leaders of North Korea that the US is not committed to helping the DPRK, but instead, seeks the collapse of the communist regime. Robert Jervis describes the inappropriate nature of deterrent efforts with actors pursuing policies from a position of fear, RDeterrence theory is designed primarily to explain how to deal with countries that are seeking gains. In these circumstances deterrence may be effective. But if the other is driven by fear of losses, threats and coercion are likely to backfire, producing a spiral of greater hostility.S Jervis continues to describe, in terms of prospect theory, how deterrence fails to account for those situations in which the role of the defender and challenger are blurred. In situations when both actors believe that they are defending the status quo, Reach [will] accept high risks in order to avoid a bad outcome.S North Korean policy makers driven into a basement of fear by internal instability and perceived external threats at sovereignty, believe that it is necessary to pursue an aggressive foreign policy in order to maintain the status quo of its existence, independence and ideological sovereignty. North Korean leadersU belief that it is defending the status quo is evidenced by its recent declaration in which Pyongyang takes on a clear deterrent posture, RWe are ready for dialogue as well as war. The United States continues to move toward the adventurous road of war by clinging to the policy of strength as it was regardless of our repeated warnings, it will have to be wholly responsible for all consequences arising therefrom.S US Misperception While US efforts at reassurance are commendable, policies of deterrence and retributive sanctions only serve to negate the positive outcomes of these confidence building measures and further drive the DPRK into its basement of fear. US mixed policy presently rests on the assumptions of classical deterrence theory in that US policy makers assume that US signals of reassurance and deterrence are communicated clearly to a rational North Korea; US policy makers are dismissing the psychological factors that inhibit a clear interpretation of signals. While some United States actors such as Defense Secretary William Perry and General Gary Luck have accounted for North Korea insecurity as a complicating factor for US policies of deterrence, other American actors, particularly the White House, still advocate a mixed deterrent and reassurance policy based on the assumption of DPRK rationality and their resulting ability to perceive threats as intended. At a recent White House background briefing, Senior Administrative Officials responded to the question of why North Korea would be willing to seek diplomatic negotiations with both the US and South by stating, RProbably because countries act in their own self-interest, and there is a constellation of factors [the deteriorating economic conditions] coming together on the Korean Peninsula now that lead us and others to believe that the timing for proposal is ripe.S Lieutenant General James R. Clapper Jr. of the United States Armed Forces, articulated his similar belief on North Korean rationality, RI believe North KoreaUs leadership now recognizes its chances for regime survival are better served by strategies emphasizing economic improvement and political-economic accommodation rather than those stressing implacable confrontation with the outside world.S Dismissing the loss aversion principle and perceived need for aggression, many US actors believe that by pursuing a policy of reassurance and deterrence the USG can clearly communicate its enduring commitment to South Korea while simultaneously lifting North Korea out of its basement of fear. These actors fail to observe that North Korea has framed its interests in terms of ideological sovereignty and independence as their reference point. These officials fail to comprehend that North Korea will incur risks associated with aggressive behavior to not only distract domestic attention away from internal instability but to prevent a perceived restructuring of the East Asian balance of power; instead, these actors believe that internal instability will eliminate any aggressive North Korean behavior. James T. Laney, in the same manner as Clapper and the Senior Administration Officials went so far as to say, RThe shortcomings of the North Korean economy, the defects in its highly centralized system, and the dissolution of its former allies have eroded the DPRK military threat.S Ron Lewis, the chief military analyst of the Intelligyst Group, attributes the USGUs failure to understand the Korean crisis in terms of loss aversion principles to American unmotivated biases, specifically availability. Ron Lewis states that intelligence analysts, Rconstantly get tripped up by comparing [the USGUs] enemies to [themselves], then dismissing [the adversary] as incapable if he does not have comparable assets. What is forgotten is the enemyUs resourcefulness and his ability to improvise to meet a need.S Ron Lewis describes the USG as needing to Rignore dismiss or demean other militaries when they donUt do things like [the USG] would.S The USG uses short-cuts to logical examination of information by judging other actors according to USG goals, interests and perceptions of the situation, a tendency known as availability . Nicholas Eberstadt, a researcher with the American Enterprise Institute, summarizes the USGUs relations with North Korea, R...AmericaUs grasp of Korean affairs continues to be woefully inadequate... events in Korea have consistently taken Washington by surprise. Indeed, nearly all of the great and terrible events that have defined the Korean drama since the peninsulaUs partition have caught American policy makers unprepared.S Partly to the defense of US decision makers, Korea remains one the most closed nations in the world and access to information that would illuminate comprehension of North Korean intentions is extremely restricted. US POLICY RECOMMENDATIONS In order to appease North Korean insecurities the USG must focus on a positive policy of expanding diplomatic engagement with the DPRK and continuing to offer strategic rewards as confidence building measures. When actors are motivated by fear, appeasement is necessary. Professor Raymond Tanter endorses such a policy toward actors acting from a basement of fear, RReassurance dictates that defenders try to communicate their benign intentions... to reduce fear, misunderstanding [and] insecurity.S The US must continue to offer strategic rewards in exchange for North Korean compliance with US demands as negotiators had in the Agreed Framework. The carrot and stick strategy utilized in the October 1994 negotiations offers the only solution to alleviating North Korean fears of external dominationist goals and will also serve to achieve US interests of security in the Korean peninsula. The USGUs April 1996 proposal of four way peace talks between the DPRK, the ROK, the US and China in response to North Korean demands of two way talks between the US and themselves (with the notable exclusion of South Korea) was a commendable concessionary policy. The US compromised by retreating from its policy that peace talks were the responsibility of the two Koreas, with the US seeking to act in a strictly supportive role. By compromising and involving all relevant East Asian actors, the US demonstrated not only its benign intentions but its commitment to East Asian security as well. Complementing US efforts of strategic rewards, the US must also begin a phased retreat of its deterrence policy. Deterrent efforts only serve to increase North Korean insecurity and misperception of US signals and thus a phased policy of eliminating the USGUs deterrent posture is necessary. Evidence suggests that the USGUs downsizing of its deterrent strategy has empirically served to alleviate tensions on the Korean peninsula. Bruce Cumings, having earned a Ph.D. in political science and East Asian affairs, supports a strict focus on reassurance and engagement toward North Korea. He explains, RThe Nixon Administration withdrew a division of American soldiers without heightening tension; instead the North Koreans responded by virtually halting attempts at infiltration (compared to 1968 when more than 100 soldiers died along the DMZ) and by significantly reducing their defense budget in 1971... In what seemed to be a miraculous development, both Koreas held talks at a high level...culminating in a stunning... announcement that both would seek reunification peacefully, independently of outside forces...Within a year that initiative had effectively failed, but it is a reminder of what might be accomplished through enlightened and magnanimous diplomacy...S The carrot and stick strategy coupled with a retreat in the USGUs deterrent posture will serve to eliminate North KoreaUs perception that the US poses an external threat and, therefore, North Korea will not feel pressured to seek an aggressive foreign policy of crisis escalation. The second goal of US policy should seek to eliminate the other source of North KoreaUs perceived need for aggressive policy, internal instability. Although Lebow states that Rdefinite limitsS exist on the ability of an external actor to appease internal instability and prevent diversionary tactics of aggression, the US must continue to attempt to stabilize domestic conditions in North Korea through humanitarian measures. The USGUs rhetoric of separating the humanitarian and political issues involved in offering aid may be just that, rhetoric. The humanitarian issue of internal instability has grave consequences on the political and security dilemmas facing the US and North Korea as discussed above. The US must continue to pursue policies of aid that alleviate internal chaos and conditions of famine in North Korea. By doing so, the US will eliminate North KoreaUs belief that it must pursue aggressive policy as a diversionary tactic. Removal of economic sanctions, which may be used as a bargaining chip in negotiations, will also serve to improve North KoreaUs domestic conditions. In terms of prospect theory and the loss aversion principle, Jervis summarizes the effectiveness of diplomatic engagement, RA statesman will run a significant risk of destruction of his own power and his regime and devastation of his country if he thinks the alternative is a certain and significant deterioration in his power and security. But he would not be willing to run similar risks if he believed that the status quo could be maintained by diplomacy even though war, if successful, could bring great gains.S Only through a strict policy of diplomatic engagement and reassurance can the US hope to alleviate North Korean fears and eliminate the possibility of a devastating Korean conflict.