OECD Product Market Regulation (PMR) Indicators: How does Sweden 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
Sweden
1.11
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
Sweden 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 Sweden are among the lowest in the OECD. Controls and obligations imposed on firms and the use of price regulation are limited. Barriers to foreign trade and investments are low, and so are barriers to competition in the service sectors. There are procedures in place to assess the impact of new laws and regulations on competition, and the administrative requirements for setting up new firms are limited. In contrast, there is scope to align the framework regulating public procurement with key OECD best practices, and public ownership of firms is more extensive than in many other OECD countries. However, the corporate governance of these state-owned enterprises is better aligned with key OECD best practices than in most other OECD countries.
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
Sweden
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
Sweden
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 Regulatory barriers to competition on the provision of professional services are limited in Sweden. The rules regulating retail trade and the retail sale of medicines are also competition-friendly. In contrast, regulatory barriers to competition in network sectors, in particular electricity and e-communications are higher, mostly reflecting direct control by the state of some of the largest operators in these sectors.
Regulation in network and service sectors PMR Indicators for network sectors Index scale 0 to 6 from most to least competition-friendly regulation Sweden 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 Sweden 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 Sweden are among the lowest in the OECD, still there is scope for improving product market regulation in some areas.
Strengths
Challenges
There are limited entry requirements and conduct restrictions on professional services. Only entry regulation for real estate agents are more restrictive than in most OECD countries. However, this may reflect the fact that these professionals are involved in the provision of conveyancing services, which in most OECD countries are provided by lawyers and/or notaries. Price regulation is less common than in most OECD countries. In particular, the fees charged for professional services are neither regulated nor selfregulated.
The regulatory set-up in the retail sale of medicines is one of the most competition-friendly in the OECD. There are no restrictions on the number, location, ownership and opening hours of pharmacies. In addition, non-prescription medicines can be sold in a large variety of retail outlets and both prescription and non-prescription medicines can be sold online.
The regulatory framework for general retail trade is conducive to competition.
The framework regulating the public procurement of goods, services and public goods is not fully in line with key OECD best practices.
The presence of state-owned enterprise, in particular in the network industries, is pervasive. In addition, the sale of shares in state-owned enterprises requires legislative intervention. However, the corporate governance of these enterprises is in line with most key OECD best practices, thus levelling the playing field between publicly-owned and privately-owned firms.
There are no rules regulating the interaction between interest groups and public officials during the regulatory process. There is only a requirement for officials to identify the interest groups they have consulted with. In addition, there is no national legislation imposing a cooling off period for senior civil servants, appointed public officials, and members of legislative bodies when they leave their post.
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