Up until now, Korea has been recognized as one of the most severe and strict countries in terms of social regulation. As a result of that, it is generally accepted that economic activities in private sector have been contracted to some extent, weakening national competitiveness. Under this background, this paper examines the complex relationships among factors affecting national competitiveness and regulation and also seeks to discover feedback loops associated with its relationship. The research result shows that reinforcing feedback and balancing feedback loops are found in the system concerned with national competitiveness and regulation. Accordingly, it implies that we need to pay our attention to the management of those loops in order to discover the optimal point striking the balance between regulation and deregulation in terms of national competitiveness. It also implies that we need to conduct sensitivity analysis to forecast the potential results which the scenarios will bring about.