By any normal standard, the two-Kim rule has been a catastrophe for the North Korean people. Kim Il Sung launched the Korean War in 1950. Decades of cold war competition left the impoverished Democratic People's Republic of Korea (DPRK) well behind the South economically. During the late 1990s famine claimed a half million or more lives in North Korea, as industrial production and economic activity shrank sharply. Even the carefully constructed totalitarian state began to crumble as the regime was unable to provide basic necessities to the North Korean people. Observes Andrei Lankov of Seoul's Kookmin University, "state-run industry collapsed, the rationing system ceased to function, and free-market activity, though still technically illegal or semi-legal, became more citizen's major source of income."

Pyongyang subsequently relaxed internal controls and slightly opened the economy to the outside. Under South Korean Presidents Kim Dae-jung and Roh Moo-hyun the Republic of Korea engaged in the so-called Sunshine Policy, aiding and investing in the DPRK. Since the 1994 Agreed Framework, the North also has engaged in an on-and-off negotiation with North Korea's neighbors and the United States over ending its nuclear program. This process has significantly increased Pyongyang's contact with the West.

Even so, a negotiated settlement remained out of reach. Despite the common assumption that the North was willing to deal, Pyongyang had reason to reject even a seemingly generous offer. Observes analyst Balbina Hwang: "For the regime itself, isolation of course serves to preserve its own power and legitimacy which would immediately be undermined by openness." Lankov points out that the Kim regime is particularly vulnerable given the proximity of South Korea, with a prosperous and free people who share the same culture and speak the same language.

Still, hope of a solution rose in the aftermath the October 2007 denuclearization agreement. Alas, the accord crashed and burned last year. North Korea has subsequently denounced the arrangement, expelled international inspectors, announced that it will not return to the six-party talks, begun to rebuild its nuclear program and restarted reprocessing activities, renounced the 1953 Armistice, nullified boundary-demarcation accords, terminated bilateral political cooperation and reconciliation agreements, and voided economic arrangements with the South. Earlier this year, Pyongyang conducted a nuclear test and several missile tests. As international criticism increased, the DPRK ratcheted up its rhetoric, threatening military retaliation in response to varied South Korean, U.S. and UN actions.

None of this means that North Korea could not come back to the table. However, today there is far less expectation that the DPRK will ever be willing to abandon its nuclear program, let alone yield up its existing nuclear materials. Nuclear weapons offer the North security assurance, international status and extortion opportunities. If Pyongyang can still be bought off, the price has likely risen sharply.

North Korea's current internal instability will make reaching a deal even more difficult. Despite common claims that Kim is "crazy," the evidence indicates that he is evil, not insane. His strategy is consistent with regime preservation.

The military is central to Kim's rule. He long has pushed a "military first" policy. Even as the regime lost authority, it continued to funnel resources to the armed forces. Nevertheless, in their prime both Kims may have had sufficient authority to sacrifice the military's most powerful weapon as part of a political deal. A seriously ill and perhaps dying Kim Jong Il may not. A transitional collective leadership likely would not.

As noted earlier, the North already is moving in reverse on several fronts. The regime has been restricting private markets-limiting their number and what they can sell. Able-bodied men and women have been barred from the market trade. "Slowly but surely, plans to close all general markets are becoming a reality," warns the charity Good Friends.

The little private space that had opened up is closing: cell phones have been banned and their use now can result in a large fine and internal exile. The regime has launched a concerted campaign to prevent the sale of smuggled South Korean videos and CDs. Overall, writes Jinwook Choi, since late 2005 "Pyongyang seems to be enforcing the role of the party, prioritizing regime solidarity and implementing conservative policies at home and abroad in the aftermath of failed liberal economic policies (albeit partial and limited) over the last decade."

Pyongyang has tightened border controls, cracked down on corruption among border guards on the north and periodically closed the border to the south. The North also reintroduced the state monopoly over food supplies and restricted activities by the World Food Program. (The WFP warns of impending food shortages, though Open Radio for North Korea, a South Korean group with contacts in the DPRK, reports the opposite.)

The North also is threatening to pull the plug on the Kaesong industrial development, which hosts 106 South Korean companies (one of which has pulled out) and employs forty thousand North Koreans. Pyongyang has torn up the agreement covering Kaesong and demanded a massive increase in rent and wages (which are pocketed by the regime). The North also arrested a South Korean in March for allegedly criticizing Kim Jong Il and has held him incommunicado. The regime appeared to back away from its expressed willingness to close Kaesong during the most recent bilateral negotiations, but the development's future remains in doubt.

Unconfirmed reports indicate that Choe Sung-choi, the official responsible for North-South relations, was executed last year, allegedly for corruption; the more serious offense, some observers suspect, is the deterioration in inter-Korean relations. All told, notes Lankov, "Though a complete return to the 1980s system has not occurred (being perhaps impossible), the backlash has been partially successful in reversing the changes."

Equally significant is the rising influence of the military. Cheong Seong-chang, director of the Inter-Korean Relations Studies Program at the Sejong Institute, argues that "Since the appearance of health issues with Kim Jong-il last year, the North Korean military became more influential." Kim may have decided he must placate an institution capable of ratifying or blocking any leadership transition; the military may have become more demanding in the wake of his incapacity; both phenomena may be occurring simultaneously.

This would explain the rapid multiple international provocations, punctuated by the nuclear and missile tests. Moreover, the National Defense Commission (NDC), one of Pyongyang's most powerful military bodies, is gaining internal authority. Responsibility for foreign intelligence apparently was recently moved to Commission. Open Radio for North Korea reports that strategic weapons development also was shifted to the NDC (from the Korean Workers' Party). The group concluded: "The move is an indication that the National Defense Commission is expanding its role beyond being a policy council for the senior insiders, transforming into a real power with enforcement agencies under its wings."

Indeed, Rodger Baker of Stratfor Global Intelligence goes further, telling Fox News:

the NDC has really solidified as the central leadership body of North Korea, so it sits over top of the Workers Party, over top of the military, over top of the parliament, in general terms of power. It becomes the place were Kim Jong-il is able to shape his policies, where he's able to make sure that he has all the strongmen of North Korea in one location.

Even more problematic is the leadership transition. Although it is hard to know how actively involved and in control Kim remains-there is evidence of organizational changes designed to limit his workload-the ruling elite almost certainly is thinking about future contingencies. This can only complicate Pyongyang's dealings with the rest of the world.

The uncertainty created by Kim's condition is compounded by the age of many other top officials. Indeed, Kim is relatively young compared to some of those around him. For instance, eighty-one-year-old Kim Yong-nam is chairman of the National People's Assembly and nominal head of state.

The NDC, however, is the single most important state institution and provides Chairman Kim Jong Il with his only formal position. The NDC's first vice chairman, Vice Marshal Jo Myong-rok, is seventy-three. General O Kuk-ryol, seventy-eight, spent some time in political purgatory in the early 1990s, but was recently elevated to vice chairman of the NDC. Another vice chairman is Vice Marshal Kim Yong-chun, the seventy-three-year-old defense minister. Thus, irrespective of Kim Jong Il's condition, significant changes within the ruling elite are inevitable in coming years.

Doug Bandow is a senior fellow at the Cato Institute. He is a former special assistant to President Reagan and the author of several books, including Tripwire: Korea and U.S. Foreign Policy (Cato Institute) and The Korean Conundrum: America's Troubled Relations with North and South Korea (Palgrave/Macmillan, co-author).