With the backing of the Soviet Union, Kim Il-Sung started on a series of popular social and economic reforms which included land redistribution and nationalizing Japanese assets.
The Korean War, which soon followed the formation of the country, resulted from political differences that couldn't be reconciled between the Communist north and the American-controlled south. The north's army was better-trained and better-experienced, and it initially appeared that they would win. Then American troops entered the war and it seemed the south would win. Then troops from Maoist China entered the war, and a general stalemate resulted, along the original line of devision that existed before the war. A formal division of the peninsula was established in 1948 forming a de-facto front. The conflict lasted from 1950 to 1953 and inflicted heavy human losses in North Korea and closer ties with the world Communist bloc.
After the war, support from the Soviet Union waned, and North Korea started to work towards Kim Il Sung's "Juche" (or "self-reliance") idea in the 1950s. Some large degree of industrial and economic gains resulted from these strategies throughout the 1960s and early 1970s. However, by the mid-1970s, more expensive oil along with a growing technology gap with the rest of the world undermined the reforms. Instead of turning to capitalist reform like China, Kim Il Sung opted for an ideological purity of his economic policy under a socialist system. Still, North Korea would continue to be foreced to choke its economy in the name of self-defense from the very real threat of the United States.
North Korea defaulted on almost all of its loans in 1980 and by the late 1980s industrial output was declining by greater than 4% per year. Nevertheless, the DPRK refused to abandon its socialist system.
Kim Il-sung died in 1994, and following a power struggle that left the country without a clear leader from 1994-1997, his son, Kim Jong Il, was elected president in October 1997.
Following the September 11, 2001 Terrorist Attacks, the George W. Bush Administration, in violation of the 1994 North Korea-U.S. Agreed Framework, named North Korea as part of a so-called "Axis of Evil" and a potential target of its "pre-emptive strike" policy. Bush says that he labeled North Korea a part of the so-called 'Axis of Evil' due to its arm sales to countries, such as Iraq, which he alleged was known to fund and train terrorists.
In late 2002, North Korean officials expelled United Nations weapons inspectors and admitted running a clandestine nuclear energy program in violation of international agreements, which they charged had already been rendered void by the United States' failure to live up to either of its key requirements. They also indicated that they were going to continue this program unless the United States agreed to a non-invasion pact. The United States alleges that North Korea had a nuclear weapons program. (See: North Korea nuclear weapons program)