• absorption;
  • bargaining theory;
  • confederation;
  • inter-Korean relations;
  • unification policy;
  • Vision 3000

Inter-Korean relations can be thought of as one long bargaining session over the terms of reunification, in which the South's strategies depend on its perceived bargaining position and on its estimate of the stability of the Northern regime. After developing the analytical framework drawn from the bargaining logic, we analyze the shift in South Korean unification policies from confrontation to peaceful coexistence and the emergence of two competing visions for unification—confederation and absorption. We identify the logical and practical limitations of both confederal and absorptionist strategies and the intrinsic dilemmas that South Korea inevitably faces in pursuing political integration with the North. We conclude that the current South Korean government's unification policy is a move in the direction of an absorptionist strategy, reflecting the considerable barriers to reaching a confederation agreement with Pyongyang.