South Korea

With the pandemic having had a relatively light economic impact, South Korea falls into the upper-middle ranks (rank 12) with regard to economic policy. Its score on this measure is unchanged relative to its 2014 level.

South Korea weathered the COVID-19 crisis well, with an economic downturn of just 0.9% of GDP in 2020. Growth returned to 4% in 2021. Healthy public finances allowed for a large economic stimulus of about 11% of GDP. Much of the response was focused on enhancing the social safety net or accelerating the digital and green economic transitions.

Unemployment rates remained stable and modest, rising from 3.8% in 2019 to about 4% in 2020, and falling again to 3.6% in 2021. However, the employment rate is low, especially among women, and the incidence of non-regular work, which is paid less and receives fewer benefits than regular jobs, is increasing.

Tax revenues are considerably lower as a share of GDP than the OECD average. The government deficit was just 2.3% of GDP in 2020 despite the large fiscal stimulus. Debt has increased to 51% of GDP. New fiscal rules taking effect in 2025 will limit debt to 60% of GDP and deficits to 3% of GDP. The government invests heavily in research and development.

With efforts to expand the welfare state having had little immediate effect, South Korea’s social policies fall into the middle ranks (rank 22) in international comparison. Its score on this measure has improved by 0.3 points since 2014.

The healthcare system performed very well in response to COVID-19. Pandemic containment, testing and contact-tracing measures helped keep the number of cases exceptionally low. The “Mooncare” healthcare insurance plan has expanded access to services, while considerably increasing government expenses.

Education outcomes are good. A curriculum reform has sought to reorient teaching toward critical thinking, analytic skills, creativity and digital skills. Special instructors were assigned to ensure that underprivileged students did not fall behind during the pandemic. Poverty and inequality rates are high. The government has boosted social spending to 12.2% of GDP, far below the OECD average of 20%.

Paternal leave, child support benefits and childcare availability have been expanded; nonetheless, there are numerous disincentives to women entering the workforce, and birth rates are extremely low. Old-age poverty is a major problem. While official support for immigrants has expanded, the country’s cultural, education and social policies do not systematically address migrants.

Lacking cohesion, South Korea scores relatively poorly (rank 30) in international comparison in the area of environmental policies. Its score on this measure has declined by 0.2 points relative to 2014.

The government has prioritized economic growth over environmental concerns. Improved emissions targets include a 40% cut below 2018 levels by 2030, with a legally mandated target of carbon neutrality by 2050. However, current policies are not deemed sufficient to reach the targets.

Policies include an emissions-trading system for key sectors, a green building plan, an incentive system supporting electric and hybrid vehicles, and measures supporting environmentally friendly public transportation. There are no explicit taxes on carbon or electricity.

As of 2019, Korea was the world’s eighth-largest emitter of CO2, and the share of energy production accounted for by renewables is the second-lowest in the OECD. It has committed to phasing out coal financing. In general, environmental measures tend to be ad hoc and fragmented.

Despite wide-ranging efforts to enhance the rule of law, South Korea still falls into the lower-middle ranks (rank 25) with respect to democracy quality. Its score on this measure has increased by 1.1 point relative to 2014.

An electoral reform intended to improve minor parties’ chances has had the opposite effect. Parties and candidates largely raise money via private donations and special investments. Monitoring functions are only partially effective. A new system allows citizens to create petitions that the government must address after sufficient public support.

Media manipulation declined substantially under the Moon government. Most major newspapers have a strong conservative bias. Political debate in which diverging political opinions are respected is becoming more routine. Discrimination against women, migrants, LGBTQ+ people and North Korean defectors remains problematic. New workplace harassment penalties have been adopted.

Moon took a number of steps to strengthen the rule of law, including by reducing the influence of the Supreme Prosecutor’s Office and other powerful institutions. Corruption investigations targeting high-ranking officials have been made more independent. However, there has been minimal success in curbing corruption and influence peddling by big business groups.

With a strong central executive, South Korea falls into the upper-middle ranks (rank 17) with regard to executive capacity. Its score on this measure is unchanged relative to its 2014 level.

The powerful presidential office dominates line ministries. The president’s office has significant strategic-planning capacities. Ministerial compliance is strong, enforced by presidential pressure. Informal coordination plays an important role. The government uses e-government software to monitor policy implementation in real time.

RIA procedures are mandatory, with quality having improved in recent years. The Moon administration consulted far more deeply with societal actors than did its predecessor, and brought labor unions back to the tripartite consultation process. Communication during the pandemic was deemed extremely effective, contributing to public trust in the measures implemented.

The Moon administration was more effective than predecessors in implementing its goals, with COVID-19 policy being a particular bright spot. Policymakers’ pandemic management demonstrated institutional learning and innovation. A decentralization campaign gave local governments greater autonomy and fiscal authority. Regulatory enforcement is often biased toward big business.

Despite considerable gains in recent years, South Korea still falls into the lower-middle ranks (rank 27) with regard to executive accountability. Its score on this measure represents an improvement of 0.8 points relative to 2014.

The country has a vibrant civil society sector. Engaged citizens are active in monitoring and holding the public and private sectors to account. However, many people remain poorly informed about actual policy details. Traditional media produce superficial political coverage, propagating extreme partisan content as a means of securing subscribers and viewers.

Though often overburdened, parliamentarians have large staffs and substantial oversight powers. The audit office is accountable to the president. A pandemic policy that released overbroad amounts of personal contact-tracing data to the public was ultimately curtailed after critique by the Human Rights Commission.

Parties are typically organized in a top-down fashion, often led by a few powerful individuals. Both business and labor groups wielded influence under the Moon administration. Civil society groups provided a pool of experts for the administration, though this undermined their ability to criticize the government to some extent.