WASHINGTON, October 22, 2009 (AFP) - The US should scrap its policy of isolating North Korea and embrace economic engagement as a way of curbing the reclusive communist state's provocative behavior, experts urged in a study Thursday.

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 incitements including a nuclear test.

The experts instead urged Washington to drop 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.

The experts stressed that such interaction would not play into Pyongyang's efforts to strengthen its "coercive power."

"Instead, economic engagement starts a process that may lead to significant benefits without enhancing the DPRK's (North Korea's) military capabilities or making the US or its allies more vulnerable."

While warning that there would likely be resistance to such engagement, the study urged Washington to open channels to various elements within

Pyongyang's power structure, and to "be both patient and determined" in its approach in order to capitalize on sudden opportunities for engagement.

While acknowledging it was not a perfect parallel, it cited the example of neighboring China, saying 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.

The Obama administration has vowed a hard-nosed policy toward North Korea, joining many conservatives in pledging not to "reward" the communist state for violating past agreements.

The study said the Obama should instead follow his 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.