OECD Product Market Regulation (PMR) Indicators: How does the Netherlands 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
Netherlands
1.10
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
Netherlands 5 Most competition-friendly countries
OECD average 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.
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ECONOMY-WIDE HIGHLIGHTS
Overall, regulatory barriers to competition in the Netherlands are among the lowest in the OECD. Notably, regulatory barriers to competition in the service sectors as well as restrictions to foreign trade and investment are low. The regulatory procedures are among the simplest in the OECD, and the presence of state-owned enterprises is limited, especially in network sectors. However, there is scope for lowering the administrative burden on new businesses, in particular by simplifying the licensing regime. In addition, there is a lack of rules to ensure transparency in the interaction between public officials and interest groups.
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
Netherlands
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
Netherlands
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.
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SECTOR-SPECIFIC HIGHLIGHTS In most network sectors, the regulatory set-up is close to international best practices, and the regulatory barriers to competition in professional services are very low, with the exception of lawyers. The regulation of retail distribution, including the retail sale of medicines, imposes few constraints to competition.
Regulation in network and service sectors PMR Indicators for network sectors Index scale 0 to 6 from most to least competition-friendly regulation Netherlands 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 Netherlands 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 the Netherlands are among the lowest in the OECD, still there is scope for improving product market regulation in some areas
Strengths
Challenges
In the Netherlands, laws and regulations are easy to access and to understand. In addition, there are explicit programs in place to reduce the compliance costs for enterprises, such as the ex-post review of the costs of regulation and e-government.
Rules regulating the public procurement of goods, services and public works, are in line with most of the OECD key best practices.
Regulations of professions impose few restrictions on entry and conduct, with the exception of lawyers. In particular, barriers to entry in the profession of notaries are the lowest among the OECD countries where this profession exist. In particular, the Netherlands is one of very few countries in which the number of notaries is not restricted, and where the retail tariffs charged to clients are not set by law or by self-regulation.
The administrative burden on start-ups is lower than the OECD average, but it is still necessary to contact four bodies in order to open a limited liability company. In addition, there is no “silence is consent” rule, and there is no single one-stop shop for issuing all authorisations and permits, which would simplify the process for starting up new businesses.
There is a lack of clear rules for ensuring transparency and accountability in the interaction between public officials and interest groups. Notably, there is no requirement for public official to make their agenda open to the public, nor is there a no compulsory cooling-off period for public officials when they leave their post.
The presence of state-owned enterprises, particularly in network sectors, is limited. However, there is scope to improve the governance of stateowned enterprises. For example, public authorities are involved in the selection of CEOs, the public body that owns the state-owned enterprise and the industry regulator are not always separate, and the government has to approve mergers, equity issuances and restructuring plans of all stateowned enterprises.
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