OECD Product Market Regulation (PMR) Indicators: How does Poland 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
Poland
1.45
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
Poland
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 Poland are slightly above the OECD average. The framework for the public procurement of goods, services and public works is in line with most key OECD best practices. In addition, there are low barriers to foreign direct investments and there are programmes in place to reduce the complexity of regulations. However, the government still owns or controls firms in many sectors, including network sectors. Moreover, there is scope for improving the governance of state-owned enterprises to guarantee the conditions for a level-playing field between state-owned and privately owned firms. Further, the administrative burden on start-ups is also higher than in many OECD countries, though the licensing regime is flexible and the government has put in place mechanisms for further simplifications.
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
Poland
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
Poland
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 network sectors is less competition-friendly than in many other countries, except in ecommunications. In energy and transport, state ownership is pervasive and regulatory settings could be better aligned with international best practices. In addition, the regulatory set-up of many professions is less competition-friendly than in many other OECD countries, despite past efforts to streamline professional requirements. Regulatory barriers to competition in retail trade, which do not take into account the progressive introduction of a Sunday trade ban in the last few months, could also be lowered both in general retail trade and in the retail of sale of medicines.
Regulation in network and service sectors PMR indicators for network sectors Index scale 0 to 6 from most to least competition-friendly regulation Poland 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 Poland 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 Poland are limited, but there is scope for improving product market regulation in some domains and sectors.
Strengths
Challenges
There are rules for ensuring that the impact of new regulations on competition is taken into account and for engaging stakeholders in the regulatory process.
The regulatory set-up in e-communications is competition-friendly. The extent of state ownership is limited, and regulations are close to international best practices.
The administrative requirements necessary to set up new firms are burdensome. For example, to open a limited liability company it is necessary to fulfil a large number of procedures and to contact seven different bodies.
Public ownership of firms is more extensive than in most other OECD countries, and a legislative action is necessary to authorise the sale of shares of state-owned enterprises. The governance of state-owned enterprises and the set-up of sectoral regulators could be better aligned with key OECD best practices.
Competition in retail distribution is restricted by burdensome authorisation requirements for large outlets, and, in some sectors, the requirement to own a brick and mortar shop in the country to be able to sell goods online. The number, location and ownership of pharmacies are also strictly regulated.
Barriers to foreign investments are low, while there is scope to further reduce barriers to foreign trade, notably for professional services.
Most professions face high barriers to entry, except estate agents and accountants. Moreover, lawyers and notaries also face tight restrictions on their conduct. For example, law firms cannot benefit from limited liability and are forbidden from advertising their services.
Programs exist to reduce the compliance costs for enterprises, which deploy strategies such as ex-post review of the costs of regulations and e-government.
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