What are the differences in the two economies (North and South Korea) and detailing economic policies in these two economies that account for the differences?

North and South Korea after emerging from the war in the early 1950s, the two countries' economies took a different direction. North Korea is a centrally directed and least open economy which has led to it facing severe problems since the market allocation is restricted. Its industrial capital stock is close to sinking due to underinvestment, low maintenance and shortage of spare parts. North Korea has large-scale military spending from its nuclear war programs, which draw off resources required for investment and national consumption.

South Korea, on the other hand, has had a remarkable economic success becoming connected globally with high technology and developments. It practices a hybrid economic system where there is government regulation and also private freedom. Technology motivated saving, and investment above consumption, whereas the government upheld the importation of raw materials, directed resources to industries that are export aligned and kept the wages low. These actions have seen it achieve a Gross Domestic Product that is almost 50 times greater than that of North Korea.