Product Market Regulation in OECD Countries: 1998 to 2003

Abstract

This paper describes trends in product market regulation in OECD countries over the period 1998 to 2003.The analysis is based on summary indicators of product market regulation that measure the degree to which policies promote or inhibit competition.The results suggest that regulatory impediments to competition have declined in all OECD countries in recent years.Regulation has also become more homogenous across the OECD as countries with relatively restrictive policies have, in some areas, moved towards the regulatory environment of the more liberalized countries.Within some countries product market policies have become more consistent across different regulatory provisions, although relatively restrictive countries still tend to have a more heterogeneous approach to competition.In general, domestic barriers to competition tend to be higher in countries that have higher barriers to foreign trade and investment, and high levels of state control and barriers to competition tend to be associated with cumbersome administrative procedures and policies that reduce the adaptability of labour markets.Notwithstanding recent progress in product market reform, a 'hard core' of regulations that impede competition still persists in virtually all countries.