OECD Product Market Regulation (PMR) Indicators: How does Belgium compare? ___________________________________________________________________________________ Competitive product markets foster economic growth and can improve the living standards of citizens. OECD’s Product Market Regulation Indicators assess the alignment of a country’s regulatory framework with internationally accepted best practices. The Economywide Indicator measures the distortions to competition that can be induced through the involvement of the State in the economy, as well as the barriers to entry and expansion faced by domestic and foreign firms in different sectors of the economy. This indicator is complemented by a set of Sector Indicators that measures regulatory barriers to competition at the level of specific network and service sectors.
Overall PMR Indicator Index scale 0 to 6
Belgium
1.69
OECD average
1.38
5 Most competitionfriendly countries 5 Least competitionfriendly countries
1.00 1.82 0.0
2.0
4.0
6.0
Economy-wide PMR Indicators: a breakdown by major components Index scale 0 to 6 from most to least competition-friendly regulation
6
Belgium OECD average 5 Most competition-friendly countries 5 Least competition-friendly countries
5 4 3 2 1 0 Public Ownership
Involvement in Business Operations
Simplification and Evaluation of Regulations
Admin. Burden on Start-ups
Barriers in Service Barriers to Trade & Network sectors and Investment
Note: All the averages include only OECD countries. Information refers to laws and regulation in force on 1 January 2018. Source: OECD 2018 PMR database.
ECONOMY-WIDE HIGHLIGHTS
Overall regulatory barriers to competition in Belgium are close to the OECD average. Public ownership of firms is moderate in Belgium, with the government owning or controlling through special voting rights only a few key firms. However, the governance of state-owned enterprises falls short of OECD best practices. Rules regulating public procurement are in line with OECD key best practices, and barriers to foreign trade and investment are low. In contrast, licensing procedures are cumbersome and regulatory procedures are complex. Involvement in business operation through command and control regulations as well as price regulation are also higher than in many OECD countries.
Economy-wide PMR indicators: a breakdown by sub-components Index scale 0 to 6 from most to least competition-friendly regulation Distortions Induced by State Involvement Simplification and Evaluation of Regulations
Complexity of Regulatory Procedures
6 5 4 3 2 1 0
Interaction with Interest Groups
Involvement in Business Operations
5 Least competition-friendly countries
Assessment of Impact on Competition
6 5 4 3 2 1 0
Price controls
Governance of SOEs
Direct Control
Scope of SOEs
Gov’t Involv. in Network Sectors
Public Ownership
6 5 4 3 2 1 0
5 Most competition-friendly countries
Public procurement
OECD average
Command & control regulation
Belgium
Barriers to Domestic and Foreign Entry
Barriers to Trade Facilitation
Barriers to Trade and Investment
Treatment of Foreign Suppliers
6 5 4 3 2 1 0
Tariff Barriers
Barriers in Service & Network sectors
5 Least competition-friendly countries
Barriers to FDI
6 5 4 3 2 1 0
5 Most competition-friendly countries
Barriers in Network sectors
Licenses and Permits
Admin. Burden on Start-ups
Admin. Requirements for Lim. Liab. Companies and Pers.Owned Enterp.
6 5 4 3 2 1 0
OECD average
Barriers in Services sectors
Belgium
Note: All the averages include only OECD countries. Information refers to laws and regulation in force on 1 January 2018. If the blue bar does not appear on the chart for a specific indicator, it means that its value is 0. Source: OECD 2018 PMR database.
SECTOR-SPECIFIC HIGHLIGHTS Regulation of network industries is competition-friendly in some network sectors, but in others, such as air and ecommunications, there is scope for bringing them closer to international best practice. In contrast, regulatory barriers to competition in service sectors are higher than in most other OECD countries. Professions are subject to extensive regulation, especially with respect to entry requirements. Civil engineers are the only exception. In addition, regulatory constraints to competition in retail distribution are also more extensive than in most OECD countries.
Regulation in network and service sectors PMR Indicators for network sectors Index scale 0 to 6 from most to least competition-friendly regulation Belgium 5 Most competition-friendly countries
6
OECD average 5 Least competition-friendly countries
5 4 3 2 1 0 Electricity
Gas
Rail
Air
Energy
Road
Water
Fixed
Transport
Mobile
E-Communications
PMR Indicators for professional services* and retail distribution Index scale 0 to 6 from most to least competition-friendly regulation Belgium 5 Most competition-friendly countries
6
OECD average 5 Least competition-friendly countries
5 4
3 2 1
0 Lawyers
Notaries
Accountants
Architects
Professional services
Civil engineers
Real estate agents
Retail distribution
Retail sale of Medicines
Retail trade
* When comparing the indicators across countries, it should be kept in mind that the activities undertaken by specific professions may vary between countries. Note: All the averages include only OECD countries. Information refers to laws and regulation in force on 1 January 2018. If the blue bar does not appear on the chart for a specific indicator, it means that its value is 0. Source: OECD 2018 PMR database.
OVERALL ASSESSMENT
Regulatory barriers to competition in Belgium are limited, but there is room for improving product market regulation in some sectors and domains.
Strengths
Challenges
Public ownership of firms is limited in Belgium, compared with most other OECD countries. However, the government still owns, or controls through special voting rights, a few large firms.
Entry requirements and conduct restrictions imposed on professionals are restrictive. Estate agents, architects, and accountants are among the most regulated in the OECD.
The regulation of water transport is among the most competition-friendly in the OECD. There are no major barriers to foreign entry, and access to the market is regulated through an authorisation system.
Retail distribution is characterised by a restrictive regulatory set-up, with rigid rules on shop opening hours and on seasonal sales. In addition, requirements for selling goods and services online are relatively burdensome.
The regulation of the e-communication sector is close to international best practice, but the government still owns the majority of one of the largest operators, Proximus, which is active both in the fixed and retail segments.
The complexity of regulatory procedures is higher in Belgium than in most OECD countries. There is no requirement to use plain language when drafting new laws and regulations, nor to regularly publish a list of laws that will be approved, repealed or modified in the next regulatory period.
Further information
“What are the 2018 OECD PMR indicators?” PowerPoint presentation on OECD PMR website
Vitale, C., et al. (2020), " The 2018 Edition of the OECD PMR Indicators and Database – Methodological Improvements and Policy Insights", OECD Economics Department Working Papers
Please visit our website : http://oe.cd/pmr Contact us at: PMR2018@oecd.org