Future development assistance to North Korea through the establishment of multi-donor trust funds

Abstract

Purpose - This article explores multilateral engagement in the economic rehabilitation of North Korea, with particular focus on the establishment of special trust funds.Design/methodology/approach - The study consists of an analysis of international assistance to North Korea that addresses policy measures for improving the quality of aid delivery. Conceptual and empirical issues around multi-donor trust funds (MDTFs) are explored by conducting an examination of the role of aid coordination, management practices in multilateral aid, and the potential benefits of trust funds.Findings - The setting up of trust funds is a possible option for resource mobilization and aid coordination in the provision of development assistance to North Korea. Given the potential benefits of such an aid modality, the creation of one or more MDTFs as a means of facilitating the denuclearization process on the Korean Peninsula could help strengthen relations between Pyongyang and the international donor community. In drawing attention to issues around the administrative structure of the MDTF, this article proposes that international donors establish a North Korea Development Assistance Group (NKDAG) as the principal trust fund governing body.Originality/value - This is the first policy-oriented study detailing the possible establishment of MDTFs in the North Korean context. The suggestions of the article could contribute to efforts of the international community to improve the transparency and effectiveness of its aid contribution to North Korea.