Proceedings from the ECFIN Workshop "The budgetary implications of structural reforms" - Brussels, 2 December 2005

Product market reforms during the past decade

An update of the OECD indicator of product market regulation (PMR)86 for non-
manufacturing industries indicates that the reduction of regulatory impediments to product market
competition between 1994 and 2004 was somewhat larger in EMU and particularly in euro-area
than in other OECD countries, to some extent offsetting their stricter initial policy stance
(Figure 10). There has been some convergence within the EU, with greater deregulation occurring
in the most regulated countries (Belgium, France, Greece, Ireland, Italy, Portugal and Spain).87
No correlation can be found between these product market reform patterns and the indicators of
fiscal policy used above.

⁸⁶.See Conway and Nicoletti (2006).

87. Much of this move has been driven by the easing or elimination of coercive forms of regulation (such as command-and-control
measures and price controls) and a reduction of controls on public or private business enterprise. Significant easing in all types of barriers to
trade and investment has also been recorded. In contrast, progress in removing legal impediments to new entry in sectors sheltered from
competition has been limited and the extent of privatisation has been modest.

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