In conversation with Shorenstein APARC, Yong Lee, the SK Center Fellow, discusses his initial draw to architecture and urbanism, and the nexus of public policy and economics. Lee highlights some of his recent research activities focused on international sanctions on North Korea and educational policy as it relates to migration and housing patterns in South Korea. 

Your background is quite multifaceted, including years working in architecture and a master’s of public policy in addition to a doctorate in economics. How do all of these areas fit together to inform your research?

It took a while for me to figure out what I wanted to pursue as a career. As a high school student in Korea I had to choose a track that focused on either the physical sciences or the humanities/social sciences. At that age, it’s hard to know what you want to be. Simply because my father was an engineer, I chose the physical sciences track. When it was time to apply for college (one actually had to determine a major when applying for college back then), I became interested in international relations and wanted to become a diplomat. But given my training in the hard sciences and the fact that one had to choose a major when applying, I had to decide on a science or engineering major. After browsing through the library a few architecture books caught my eye, and I opted for architectural engineering as my major. 

I truly enjoyed my six years of architectural training but after working for an architectural firm for several years in Seoul, I realized I was more interested in the abstract ideas of architecture and urbanism and less of the actual design process that goes on in an architectural firm. I searched for my next career, became interested in urban and development policy, and pursued a master’s of public policy at Duke University. However, then I realized that economics would allow me to rigorously analyze the policy questions I was interested in. Fortunately, Brown University accepted me as a Ph.D. student and I eventually became an economist. It was through this search process, that I developed an interdisciplinary interest in policy relevant questions. My personal choices constrained by education policy, comparatively experiencing Korea’s transition while living between Korea and the United States each decade since the 1980s, and my interest in architecture and cities have shaped my research interest in economic development and growth with a focus on education, firms and cities.  And now being at FSI, I can immerse myself in international studies, something I had wanted to pursue all along. By joining Stanford, I think I finally discovered what I had wanted to do.

One of your research streams looks at the effects of sanctions on domestic populations, looking at the case study of North Korea. How did you derive data about the closed-off regime? What are your key findings?

Research on North Korea is challenging because of the dearth of data. I had been interested in how sanctions impact the domestic population, but to examine this question one would need regional level data within in North Korea. I decided to use the satellite night-lights data, which in recent years has been used as an alternative means to measure economic activity. I found that sanctions actually increase urban-rural inequality. An additional sanctions index increases the urban-rural luminosity gap by about 1 percent. However, if I focus on the more central urban areas the gap increases to about 2.6 percent. Since urban areas are more than ten times brighter than rural areas, the results imply that the gap further increases by 1 to 2.6 percent with additional sanctions.  Furthermore, I find that the urban areas actually get brighter while the rural areas get darker.

Another of your research focuses on the impact of 1970s education policy in South Korea on intergenerational mobility and migration. Can you explain this phenomenon? Does the case of South Korea relate to reform experiences in other countries?

Students in South Korea traditionally had to take an entrance exam to enter high schools. After the exam, high schools would choose students based on the exam scores. Given the variation in school quality, a hierarchy of high schools had existed and students who performed well would enter the top tier high schools. This system was heavily criticized since wealthier families could tutor children to prepare for the entrance exam. Eventually in the mid-1970s, the South Korean government abolished the exam-based system and moved to a school district based system where students would attend high schools based on residential location. By moving away from an exam system to a district system, policymakers hoped that educational opportunities would alleviate the persistence of inequality. However, what I find is that, to the contrary, the district system generated substantial sorting of households by income. Now wealthier households could simply move to districts and cities with the prestigious high schools. Given that the purchase of housing is purely determined by income, school quality became even more segregated by income and actually exacerbated the persistence of inequality across generations. This transition is now happening in several Chinese cities and in the United States – the sorting across school districts by educational outcome has created highly segregated towns. The Korea experiment allowed me to examine not just an equilibrium outcome, but also the transition when the policy changed.

In the coming year, you’ll be teaching courses related to the economies of East Asia. Can you provide an outlook on this?

I’ll be teaching an International Policy Studies course titled, “Economic Growth, Development, and Challenges of East Asia,” in the spring. The course will focus on China, Japan, and Korea, but also draw on Southeast Asian countries, when relevant. I will cover the rapid economic growth in recent decades and development policies pursued. However, I will also cover the current major economic challenges these countries face, some of which are rising income inequality, entrepreneurship, and an aging workforce. I hope to add to our rich set of courses by providing an economics and empirical viewpoint.

Tell us something we don’t know about you.

I sometimes split my sleep. That is, I go to bed to sleep for a few hours and then wake up in the middle of the dark, do some reading or work, and then sleep for one or two hours before I start my morning routine. It started during my high school years and it has stuck with me for quite a while now. Don’t worry, though. I sleep fine most of the time. I just sometimes enjoy the dead of the night.

Asia-Pacific leaders recently met in Beijing at the annual APEC summit, and after two days of discussion, concluded with some significant pledges and remarkable moments. President Xi Jinping of China and Prime Minister Shinzo Abe of Japan held a landmark meeting, and the United States and China discussed two agreements that are both symbolic, and lay groundwork for regional progress, say Stanford scholars.

High-level intergovernmental meetings are often more theatre than substance, but this year the 21-member Asia-Pacific Economic Cooperation, the oldest trans-Pacific regional organization, delivered important messages and may spur actions by member governments.

“Any summit is a ‘hurry up, get this done’ motivator,” says Thomas Fingar, the Oksenberg-Rohlen Distinguished Fellow at the Freeman Spogli Institute for International Studies. “The head of state goes to the meeting – and generally speaking – he doesn’t want to arrive and say ‘my guys were asleep for the last year.’”

Fingar says the APEC summit prodded countries to work on “deliverables,” particularly the goals and projects on the agenda from previous meetings. He recently returned from Beijing, and shared his perspectives with students in the Asia-Pacific Scholars Program.

Writing for the East Asia Forum, Donald Emmerson, director of the Southeast Asia Program at the Walter H. Shorenstein Asia-Pacific Research Center, said many of the commitments declared at the APEC summit, and at the subsequent meetings of the G20 in Australia and the Association of Southeast Asian Nations in Myanmar, will have implications for global governance, particularly as China holds a more influential role in the region.

APEC countries account for over 40 percent of the world’s population and nearly half of global trade – and true to form, the grand vision of the summit is to advance regional economic integration.

Yet, “the ancillary things – things that went on in the margins – are in many ways more important,” Fingar says, referring to areas outside of the summit’s obvious focus, and what’s discussed on the sidelines of the public talks.

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Key outcomes from the 2014 gathering include:

• The leaders of Japan and China met for the first time since coming into office, afterward acknowledging that the two countries have “disagreements” in their official statements. Of the Xi-Abe meeting, Fingar says, “it helps clear the way for lower level bureaucrats to go to work on real issues."

• The United States and China announced a proposal to extend visas for students and businesspeople on both sides. While the immediate effects would be helpful, the change is symbolically superior. “You don’t give 5-10 year visas to adversaries,” he says, it shows that “‘we’re in [the relationship] for the long-term.’”

• China proposed the development of a new “Silk Road,” pledging $40 billion in resources toward infrastructure projects shared with South and Central Asian neighbors. “It’s tying the region together and creating economy-of-scale possibilities for other countries,” he says. “A real win-win situation.”

• The United States and China, the world’s two largest energy consumers, announced bilateral plans to cut carbon emissions over the next two decades. “It’s significant because those two countries must be the ones to lead the world in this area. Unless we are seen to be in basic agreement, others will hold back.”

• China codified the Asian Infrastructure Investment Bank (AIIB), a global financial institution intended as an alternative to institutions like the World Bank. “China has been frustrated with its role in existing international institutions,” Fingar says, explaining a likely motivation behind the AIIB’s creation.

Emmerson said the outcomes of the APEC summit from the U.S.-China standpoint were better than expected, speaking to McClatchy News. The visa and climate deals, as well as their commitment to lowering global tariffs on IT products, will lessen chances of conflict between the two countries. 

However, the summit did leave some areas unsolved. One of the most important is the Trans-Pacific Partnership (TPP), a trade pact proposed by the United States that includes 11 others countries in the region, but does not yet include China.

Leaders “made positive noises” coming out of the TPP discussions, Fingar says, but nothing was passed. The gravity and complexity of trade-related issues, especially agriculture and intellectual property, is likely to blame for slow action.