The study by the Asia Society and the University of California flies in the face of the approach by President Barack Obama, who has pushed to toughen sanctions after Pyongyang's string of provocations including a nuclear test.

But the experts said the United States should reconsider some positions including dropping its objections to North Korea's entry into the International Monetary Fund, Asian Development Bank and other global financial institutions.

"Encouraging a more open and market-friendly economic growth strategy would benefit the North Korean people as a whole and would generate vested interests in continued reform and opening, and a less confrontational foreign policy," the study said.

"In other words, economic engagement could change North Korea's perception of its own self-interest," it said.

While acknowledging it was not a perfect parallel, the study cited the example of neighboring China, saying that its economic transformation has helped moderate the developing giant's foreign policy.

The project was led in part by Charles Kartman, a former top US diplomat for East Asia who headed the Korean Peninsula Economic Development Organization, set up to implement a 1994 denuclearization pact that has since collapsed.

Other authors include John Delury, associate director of the Center on US-China Relations at the New York-based Asia Society, and Susan Shirk, director of the University of California's Institute on Global Conflict and Cooperation.

Obama administration officials have vowed to be hard-nosed on North Korea, joining many conservatives in pledging not to "reward" the communist state for violating past agreements.

But the study said the Obama administration should follow its own precedent in cases such as Iran and Myanmar, with which the United States has offered talks while also maintaining sanctions.

Engagement "can complement our bargaining with North Korea in the short run, and in the long run have a positive influence on the environment in which Pyongyang makes calculations about the costs and benefits of its nuclear weapons and missile programs," the study said.

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