OECD Product Market Regulation (PMR) Indicators: How does the Slovak Republic 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
Slovak Republic
1.52
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
Slovak Republic 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.
ECONOMY-WIDE HIGHLIGHTS
Overall, regulatory barriers to competition in the Slovak Republic are slightly above the OECD average. This reflects the fact that public ownership of the largest operators in network sectors is higher than in many other OECD countries, the licensing regime is burdensome and there is scope to improve the rules regulating the interaction between interest groups and public officials. In contrast, the rules governing public procurement, the regulatory procedures, use of command and control regulation, the corporate governance of state-owned enterprises, and the assessment of the impact of new regulations on competition are all relatively close to international 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
Slovak Republic
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
Slovak Republic
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 framework in the e-communications sector is more competition-friendly than in most other OECD countries, but less so in the energy and some of the transport sectors. This is due to the presence of state-owned enterprises, for example in the electricity, gas and rail sector, and regulation that is not in line with international best practices. Professional services are among the most regulated in the OECD, in particular notaries, architects and civil engineers. Regulatory barriers to competition in retail distribution are above the OECD average, though less so in the retail 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 Slovak Republic 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 Slovak Republic 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 Slovak Republic are limited, but there is room for improving product market regulation in some sectors and domains.
Strengths
Challenges
The Slovak Republic is one of the OECD countries that imposes less barriers to entry to foreign suppliers.
The framework for the public procurement of goods, services, and public works is in line with most of the OECD key best practices in this area.
The regulatory set-up in the e-communications sector is competition-friendly. There is no public ownership in any of the firms in the sector, and regulation is close international best practice.
All professional services, except accountants, are strictly regulated in terms of entry requirements and of conduct restrictions.
Regulatory constraints to competition in the retail sector are high. For example, special administrative requirements need to be fulfilled to open up outlets that are more than 500 square meters and shop-opening hours are more regulated than in many other OECD countries.
There are no rules regulating the interaction between interest groups and public officials, and imposing transparency requirements on policymakers. For example, policymakers are not required to make their agenda available to the public, nor to disclose the identity of the interest groups they meet. However, there is a compulsory cooling-off period for public officials when they leave their post, as well as regulation dealing with potential conflicts of interest.
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