OECD Product Market Regulation (PMR) Indicators: How does France 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 measure regulatory barriers to competition at the level of specific network and service sectors.
Overall PMR Indicator Index scale 0 to 6
France
1.57
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
France
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 France are somewhat higher than the OECD average. Barriers to foreign trade and investment are low, and the country has a good system in place for assessing the impact on competition of new and existing regulations, as well as extensive rules for ensuring transparency in the interaction between interest groups and policymakers. However, regulatory barriers to competition are relatively high in a number of areas, especially in service sectors. The administrative requirements to set up new firms, especially limited liability companies, are numerous, and the licensing regime is burdensome when compared with other OECD countries. Further, there is scope to align the public procurement framework with OECD best practices, in order to facilitate participation in public tenders. The government owns or controls firms in many sectors, including network sectors, though the governance of state-owned enterprises is well aligned with most key OECD best practices.
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
France
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
France
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 The regulatory set-up in many network industries, notably in fixed and mobile e-communications, electricity, and in most transport sectors, is close to the OECD average. In contrast, in retail trade and in many professional services regulations are less competition-friendly than in many other OECD countries.
Regulation in network and service sectors Index scale 0 to 6 from most to least competition-friendly regulation
PMR Indicators for network sectors France 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
Transport
Fixed
Mobile
E-Communications
PMR Indicators for professional services* and retail distribution France 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. Source: OECD 2018 PMR database.
OVERALL ASSESSMENT
With regulatory barriers to competition that are higher than the OECD average in several areas, there is scope for improving product market regulation in France.
Strengths
Challenges
The rules regulating the interaction between interest groups and policymakers ensure considerable transparency. In addition, there are rules in place to address conflict of interest concerning senior civil servants, members of cabinet and appointed public officials.
The regulatory impact assessment system requires an evaluation of potential distortions on competition arising from new regulations. Moreover, there is a clear framework for engaging stakeholders in the regulatory design process.
Retail distribution is hampered by cumbersome registration and authorisation requirements. Shop opening hours, even though they have been relaxed in recent years, are less flexible than in many OECD countries. Further, the retail sale of medicines is mostly restricted to pharmacies, whose number, location and ownership are strictly regulated.
Entry and conduct regulation for professions, in particular lawyers, accountants and architects, is restrictive. After recent reforms, notaries face lower constraints on both entry and conduct, but quantitative restrictions are still in place and their minimum fees are still regulated.
The presence of state-owned enterprises, in particular in network industries, is more pervasive than in most OECD countries. Despite, the above average presence of state-owned enterprises in the economy, the governance of these enterprises is aligned with most key OECD best practices.
The regulation of e-communications is in line with international best practice. However, the government still owns the majority of the largest operator, which is active both in the fixed and the retail segment.
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