How Does Financial Crisis Affect a State's National Security Policy? The Case of South Korea, 1993-2002.

How does financial crisis affect a state's national security policy? Despite their political significance, relatively few studies have been devoted to the effects of financial crisis on foreign policy, especially in the field of national security. By examining South Korea's alteration of policy towards North Korea after the 1997 Asian Financial Crisis, this paper demonstrates that financial crisis can reshape the concept of national security and force a state to redirect its national security policy. South Korea's change of direction from stubborn confrontation to benevolent Sunshine policy towards its long-time rival shows three causal effects of financial crisis on foreign policy. First, experiencing financial crisis, policymakers perceive preserving economic stability and securing foreign investments as their vital national security interests. Second, a state in financial crisis seeks to avert confrontation on its border to stabilize its economy and attract foreign investments. Third, fatal impacts on national economy limit extracting and mobilizing power of government, which are required to conduct hostile policy towards neighboring country. These findings provide a potentially new interpretation of foreign policy making. ..PAT.-Unpublished Manuscript [ABSTRACT FROM AUTHOR]