The Costs of Korean Unification: Realistic Lessons from the German Case

Korea's Economy, Vol. 30

12 Pages Posted: 12 Dec 2016

Date Written: March 1, 2016


German unification is often used as a preview on what is going to happen in Korea. Such a position is rejected in this article. Not only have the costs of German unification been grossly overestimated or misinterpreted, the costs in the Korean case will in many areas be lower than in Germany, and the benefits of unification will be much bigger, which further decreases the net costs. South Korea will, however, experience problems of a structural nature that have not occurred in Germany. The potential role of external partners for shouldering the costs of unification should also not be underestimated in the Korean case, although it will come at a political price. Finally, a highly speculative but not completely unrealistic scenario of unification is briefly presented that would incur almost no unification costs at all.

Keywords: Korean Studies, Korea, North Korea (politics and society), Korean unification

Suggested Citation

Frank, Ruediger, The Costs of Korean Unification: Realistic Lessons from the German Case (March 1, 2016). Korea's Economy, Vol. 30, Available at SSRN:

Ruediger Frank (Contact Author)

University of Vienna ( email )

Spitalgasse 2, 2.3
Vienna, Vienna 1090

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