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Product Market Regulation: Extending the Analysis Beyond OECD Countries

Listed author(s):
  • Anita Wölfl


  • Isabelle Wanner


  • Oliver Röhn


  • Giuseppe Nicoletti


In this paper the recently updated product market regulation (PMR) indicators are extended to a larger set of countries including several non-OECD members. It investigates regulatory patterns in this extended set of countries as compared to the OECD countries and analyses the link between regulation and growth. On average, regulation is more restrictive of competition in non-member countries than in the OECD area. However, there exists considerable heterogeneity within this country grouping as concerns the level of the regulatory stance and its composition as well as the potential past evolution of regulatory processes. Furthermore, growth regressions provide evidence that less restrictive product market regulation is conducive to growth. An improvement of ½ index points of barriers to entrepreneurship would translate into approximately a 0.4% higher average annual rate of GDP per capita growth. However, the results also suggest that for countries that are less advanced, the potential growth benefits of enhancing product market competition may be impaired by other structural weaknesses. In particular, some restrictions of foreign trade and investment might be beneficial for growth in early stages of development. La réglementation des marchés de produits : étendre l'analyse au-delà des pays de l'OCDE Dans cet article, les indicateurs de réglementation des marchés de produits, qui ont été récemment mis à jour, sont étendus à de nombreux pays, dont plusieurs pays non-membres. Cet article examine la réglementation dans cet ensemble de pays et analyse le lien entre la réglementation et la croissance. En moyenne, la réglementation est plus restrictive pour la concurrence dans les pays non-membres vis-à-vis de la zone OCDE. Toutefois, il existe une hétérogénéité considérable au sein de ce groupe de pays en ce qui concerne le niveau de réglementation et sa composition ainsi que l'évolution potentielle des processus de réglementation dans le passé. En outre, des estimations économétriques mettent en évidence qu'une réduction des obstacles à la concurrence est favorable à la croissance. Une amélioration d'un ½ point des obstacles à l'entrepreneuriat se traduirait par un taux annuel moyen de croissance du PIB par habitant qui serait d'environ 0,4% plus élevé. Cependant, les résultats suggèrent également que pour les pays moins avancés dans leur développement économique, les avantages potentiels de croissance résultant d'un renforcement de la concurrence sur les marchés de produits peuvent être altérés par d'autres faiblesses structurelles. En particulier, certaines restrictions au commerce international et à l'investissement étranger pourraient être favorables pour la croissance dans les premiers stades de développement.

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Paper provided by OECD Publishing in its series OECD Economics Department Working Papers with number 799.

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Date of creation: 06 Oct 2010
Handle: RePEc:oec:ecoaaa:799-en
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