OECD Product Market Regulation (PMR) Indicators: How does Portugal 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
Portugal
1.34
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
Portugal 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
Regulatory barriers to competition in Portugal are slightly below the OECD average. Public ownership is limited and the rules regulating public procurement are in line with key OECD best practices. In addition, administrative requirements on start-ups are limited and the licensing regime is very lean. Barriers to international trade and investment are low. In contrast, the regulatory framework in the service sector is less competition-friendly than in many other OECD countries. Similarly, more could be done to improve the area of simplification and evaluation of regulations.
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
Portugal
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
Portugal
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 energy and e-communications is competition friendly, reflecting limited state ownership and low regulatory barriers to competition. However, there is scope to improve the regulatory set up in the transport sector, in particular in transport by water where there are numerous restrictions to competition. Professions, especially lawyers, accountants and civil engineers, face considerable barriers to entry and conduct restraints. Regulation of retail trade and of retail sale of medicines is less competition friendly than in most other 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 Portugal 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 Portugal 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
Regulatory barriers to competition in Portugal are limited, but there is scope for improving product market regulation in some sectors and domains.
Strengths
Challenges
Portugal has a very lean licensing regime. There is a ‘one-stop-shop’ for informing businesses about all licenses and for issuing them, and a ‘silence is consent’ rule exist which reduces waiting time to get a licence. The government has also put in place some programs to review and reduce the number of licenses required.
The legal framework regulating the public procurement of goods, services and public work is aligned with OECD key best practices. For instance, it is mandatory for the contracting authority to make all tender documents available online and free of charge, and to allow firms to submit bids online for all tenders.
The energy sector has one of the most competitionfriendly regulatory set-ups in the OECD, as retail markets are open to competition and regulation is in line with international best practices. In addition, the government does not own any firm in the electricity sector. However, the government still owns operators in gas export and retail supply.
There is a lack of rules regulating the interactions between most interest groups and public officials.
Professions, with the exception of real estate agents and architects, are strictly regulated, both in terms of entry requirements and of conduct restrictions.
The water transport sector is characterised by various regulatory constraints to competition, ranging from a licensing regime and public ownership of the largest firms in some of the market segments, to some restrictions on the cabotage services that foreign companies are allowed to provide.
Portugal has one of the least competition-friendly regular set-up in the area of retail distribution in the OECD. This is due to a burdensome registration and licensing regime. Regulations on sales promotions are also restrictive.
The retail sale of medicines is constrained by the fact that the number, location and opening hours of pharmacies are strictly regulated.
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