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Product market regulation indicator

The OECD Product Market Regulation (PMR) Indicators are a measure of regulatory barriers to firm entry and competition across a range of economic sectors and policy areas. These indicators were first published in 1998 and are usually updated every five years. The PMR indicators are commonly used in research as well as to identify priorities for policy reforms. [1][2]

Overview

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PMR Indicators take the form of numerical scores ranging from 0 to 6, where 0 means that a country is close to regulatory international best practices and 6 that it is quite far. These scores are computed from the answers to a set of more than 1000 questions covering a range of economic sectors and policy areas , ranging from licensing and public procurement to governance of SOEs, price controls, evaluation of new and existing regulations, and foreign trade.

The purpose of the PMR indicators is to identify specific aspects of product market regulation that could hinder competition and create unnecessary barriers to the entry and the expansion of firms, thus being a drag on productivity and economic growth. In addition, the possibility to perform cross-country comparisons allows governments to draw on experiences from other countries in designing market regulations. The OECD has undertaken research that shows that pro-competitive regulation in the markets for goods and services can encourage firms to be more innovative and efficient, thereby increasing productivity and can help increase investment and employment. [15]

The questions and the structure underlying the PMR indicators are updated regularly to take account of new issues in regulation. [16] The most recent update to the PMR indicators was published in July 2024 and refers to the years 2023/2024. To provide a comparable reference point, the answers for 2018 have been reviewed using the same methodology. Older vintages of the PMR have been published using previous methodologies, meaning that the results are not necessarily comparable.

References

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  1. ^ Andrews, Dan; Criscuolo, Chiara; Gal, Peter N. (2015-11-12). Frontier Firms, Technology Diffusion and Public Policy: Micro Evidence from OECD Countries (Report). OECD Productivity Working Papers. Paris: OECD. doi:10.1787/5jrql2q2jj7b-en.
  2. ^ The Best versus the Rest: The Global Productivity Slowdown, Divergence across Firms and the Role of Public Policy (Report). OECD Productivity Working Papers. 2016-12-02. doi:10.1787/63629cc9-en.

Further reading

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  • Bassanini, A., Scarpetta, S. and Hemmings, P. (2001), “Economic Growth: The Role of Policies and Institutions: Panel Data. Evidence from OECD Countries”, OECD Economics Department Working Papers, No. 283.
  • Böhmecke-Schwafert, Moritz, and Knut Blind. “The trade effects of product market regulation in global value chains: evidence from OECD and BRICS countries between 2000 and 2015”, Empirica 50.2 (2023): 441-479.
  • Bourlès, R., Cette, G., Lopez, J., Mairesse, J., & Nicoletti, G. (2013). “Do product market regulations in upstream sectors curb productivity growth? Panel data evidence for OECD countries”, Review of Economics and Statistics, 95(5), 1750-1768.
  • Calvino, F., C. Criscuolo and R. Verlhac (2020), “Declining business dynamism: Structural and policy determinants”, OECD Science, Technology and Industry Policy Papers, No. 94, OECD Publishing, Paris, https://doi.org/10.1787/77b92072-en.
  • Cournède, B. et al. (2016), “Enhancing Economic Flexibility: What Is in It for Workers?”, OECD Economic Policy Papers, No. 19, OECD Publishing, Paris, https://doi.org/10.1787/b8558a5b-en.
  • Demmou, L. and G. Franco (2020), “Do sound infrastructure governance and regulation affect productivity growth? New insights from firm level data”, OECD Economics Department Working Papers, No. 1609, OECD Publishing, Paris, https://doi.org/10.1787/410535403555.
  • Égert, B. 2016. "Regulation, Institutions, and Productivity: New Macroeconomic Evidence from OECD Countries", American Economic Review, 106 (5): 109-13.
  • Égert, B. and P. Gal (2017), “The quantification of structural reforms in OECD countries: A new framework”, OECD Journal: Economic Studies, https://doi.org/10.1787/eco_studies-2016-5jg1lqspxtvk.
  • Égert, B. (2018), “The quantification of structural reforms”, OECD Economics Department Working Papers No. 1482 https://dx.doi.org/10.1787/6d883be1-en
  • Gal, P. and A. Theising (2015), “The macroeconomic impact of structural policies on labour market outcomes in OECD countries: A reassessment”, OECD Economics Department Working Papers, No. 1271, OECD Publishing, Paris, https://doi.org/10.1787/5jrqc6t8ktjf-en.
  • Nicoletti, G. and S. Scarpetta (2003), “Regulation, Productivity and Growth: OECD Evidence”, OECD Economics Department Working Papers, No. 347.
  • Nicoletti, G. and S. Scarpetta (2005), “Regulation and Economic Performance: Product Market Reforms and Productivity in the OECD”, OECD Economics Department Working Papers, No. 460.
  • OECD PMR website. https://www.oecd.org/economy/reform/indicators-of-product-market-regulation/.
  • OECD PMR website. A detailed explanation of the methodology used to build the OECD PMR indicators
  • Pelkmans, J. (2010). “Product Market Reforms in EU Countries: Are the methodology and evidence sufficiently robust?”, CEPS Working Document, (332).
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