Altruism or Ulterior Motives? South Korean Aid towards North Korea's Sustainable Development

Abstract

This chapter explores the inter-Korean support and aid provided to and received by North Korea. Endogenous and exogenous motivations influence the trajectories and delivery of aid from the donor’s and the recipient state’s sides. International support stretches beyond the realm of good intentions, as each involved party has its ulterior motives behind the provision and the acceptance of aid. This study aims to examine the motivations South Korea and North Korea harbour when engaging in inter-Korean exchange and cooperation through a qualitative approach employing the principal-agent problem. It concludes that both parties engage in delivering and accepting aid when it involves benefits that outweigh the risks. Seoul (the principal) engages in aid to pursue peaceful unification, but also for economic benefits and to expand its sphere of influence. Pyongyang (the agent) chooses to accept this aid because of its developmental benefits, yet the receipt is conditional to the terms and at times rejected, as North Korea wants to reduce access to the country and foreign influences.