Performance overview: Republic of Korea
The Republic of Korea places 26th for the third consecutive year. This stable overall position conceals some notable improvement in a number of pillars. Building on healthy public finances, the country improves two places to a remarkable 3rd rank (behind Norway and Qatar) in the macroeconomic environment pillar. Korea also makes strides in the institutions pillar (63rd, up six), owing to improved public-sector performance (77th, up seven), security situation (55th, up 19), and corporate accountability (60th, up 15). Korea also post gains in infrastructure, entering the top 10 of this pillar for the first time. In the labor market efficiency pillar, one of the areas where it has struggled the most historically, Korea is improving, but from a low base (77th, up six), suffering from rigidities (119th): it notably ranks 113th for the ease of firing and hiring workers, 112th for the average cost of redundancy, and 135th for the quality of social dialogue. After several years of decline, the country improves markedly in the financial development pillar (80th, up seven), posting gains in all indicators within the pillar except one. Although credit access conditions and low confidence in the banking system remain of concern, this encouraging development suggests that the financial reforms initiated by the government are starting to bear fruit. Finally, the quality of Korea’s innovation remains excellent although it has eroded over the past year (20th, down one).