science

Product market regulation indicator

Product market regulation indicator is a science topic covered in the lgStudy science library. This page brings together a partial reference excerpt, illustrations, worked examples, real-world applications and a short study plan, so you can understand Product market regulation indicator rather than just read about it. In short: The OECD Product Market Regulation (PMR) Indicators are a measure of regulatory barriers to firm entry and competition across a range of economic sectors and policy areas. These indicators were first published in 1998 and are usually updated every five years.

Key takeaways

Product market regulation indicator belongs to science; place it in that map before memorising details.
Learn the definition first, then one example that makes the definition concrete.
Connect Product market regulation indicator to a quantity you can measure, compute or draw — that is where exam questions come from.
Reproduce the core statement of Product market regulation indicator from memory before moving on to harder problems.

Reference excerpt

The OECD Product Market Regulation (PMR) Indicators are a measure of regulatory barriers to firm entry and competition across a range of economic sectors and policy areas. These indicators were first published in 1998 and are usually updated every five years. The PMR indicators are commonly used in research as well as to identify priorities for policy reforms.

Overview PMR Indicators take the form of numerical scores ranging from 0 to 6, where 0 means that a country is close to regulatory international best practices and 6 that it is quite far. These scores are computed from the answers to a set of more than 1000 questions covering a range of economic sectors and policy areas, ranging from licensing and public procurement to governance of SOEs, price controls, evaluation of new and existing regulations, and foreign trade. The purpose of the PMR indicators is to identify specific aspects of product market regulation that could hinder competition and create unnecessary barriers to the entry and the expansion of firms, thus being a drag on productivity and economic growth. In addition, the possibility to perform cross-country comparisons allows governments to draw on experiences from other countries in designing market regulations. The OECD has undertaken research that shows that pro-competitive regulation in the markets for goods and services can encourage firms to be more innovative and efficient, thereby increasing productivity and can help increase investment and employment. [15] The questions and the structure underlying the PMR indicators are updated regularly to take account of new issues in regulation. [16] The most recent update to the PMR indicators was published in July 2024 and refers to the years 2023/2024. To provide a comparable reference point, the answers for 2018 have been reviewed using the same methodology. Older vintages of the PMR have been published using previous methodologies, meaning that the results are not necessarily comparable.

References

Further reading Bassanini, A., Scarpetta, S. and Hemmings, P. (2001), “Economic Growth: The Role of Policies and Institutions: Panel Data. Evidence from OECD Countries”, OECD Economics Department Working Papers, No. 283. Böhmecke-Schwafert, Moritz, and Knut Blind. “The trade effects of product market regulation in global value chains: evidence from OECD and BRICS countries between 2000 and 2015”, Empirica 50.2 (2023): 441–479. Bourlès, R., Cette, G., Lopez, J., Mairesse, J., & Nicoletti, G. (2013). “Do product market regulations in upstream sectors curb productivity growth? Panel data evidence for OECD countries”, Review of Economics and Statistics, 95(5), 1750–1768. Calvino, F., C. Criscuolo and R. Verlhac (2020), “Declining business dynamism: Structural and policy determinants”, OECD Science, Technology and Industry Policy Papers, No. 94, OECD Publishing, Paris, https://doi.org/10.1787/77b92072-en. Cournède, B. et al. (2016), “Enhancing Economic Flexibility: What Is in It for Workers?”, OECD Economic Policy Papers, No. 19, OECD Publishing, Paris, https://doi.org/10.1787/b8558a5b-en. Demmou, L. and G. Franco (2020), “Do sound infrastructure governance and regulation affect productivity growth? New insights from firm level data”, OECD Economics Department Working Papers, No. 1609, OECD Publishing, Paris, https://doi.org/10.1787/410535403555. Égert, B. 2016. "Regulation, Institutions, and Productivity: New Macroeconomic Evidence from OECD Countries", American Economic Review, 106 (5): 109–13. Égert, B. and P. Gal (2017), “The quantification of structural reforms in OECD countries: A new framework”, OECD Journal: Economic Studies, https://doi.org/10.1787/eco_studies-2016-5jg1lqspxtvk. Égert, B. (2018), “The quantification of structural reforms”, OECD Economics Department Working Papers No. 1482 https://dx.doi.org/10.1787/6d883be1-en Gal, P. and A. Theising (2015), “The macroeconomic impact of structural policies on labour market outcomes in OECD countries: A reassessment”, OECD Economics Department Working Papers, No. 1271, OECD Publishing, Paris, https://doi.org/10.1787/5jrqc6t8ktjf-en. Nicoletti, G. and S. Scarpetta (2003), “Regulation, Productivity and Growth: OECD Evidence”, OECD Economics Department Working Papers, No. 347. Nicoletti, G. and S. Scarpetta (2005), “Regulation and Economic Performance: Product Market Reforms and Productivity in the OECD”, OECD Economics Department Working Papers, No. 460. OECD PMR website. https://www.oecd.org/economy/reform/indicators-of-product-market-regulation/. OECD PMR website. A detailed explanation of the methodology used to build the OECD PMR indicators Pelkmans, J. (2010). “Product Market Reforms in EU Countries: Are the methodology and evidence sufficiently robust?”, CEPS Working Document, (332).

External links OECD PMR website. https://www.oecd.org/economy/reform/indicators-of-product-market-regulation/. PMR economy-wide database 2023–2024. https://www.oecd.org/content/dam/oecd/en/topics/policy-sub-issues/product-market-regulation/OECD-PMR-Economy-wide_Database_2023-2024.xlsx. PMR sector database 2023–2024. https://www.oecd.org/content/dam/oecd/en/topics/policy-sub-issues/product-market-regulation/OECD-PMR-Sector_Database_2023-2024.xlsx

Worked examples

Example 1 — a first encounter with Product market regulation indicator

Start with the simplest possible case. Write down what Product market regulation indicator claims or describes in one sentence, then invent the smallest concrete situation in which that sentence is true. In science, the smallest case is usually a single object, a single equation or a single measurement. Check that every symbol or term in your sentence has a meaning in that case.

Example 2 — changing one variable

Take the situation from Example 1 and change exactly one quantity: double it, halve it, or set it to zero. Predict what should happen to Product market regulation indicator before you calculate. Comparing your prediction with the result is the fastest way to find out whether you understand the idea or only the words.

Example 3 — an exam-style question

Typical questions about Product market regulation indicator ask you to (a) state it precisely, (b) apply it to given data, and (c) explain a limitation. Practise writing all three answers in under five minutes; the third part is what separates a full-mark answer from an average one.

Applications of Product market regulation indicator

In research: Product market regulation indicator appears in science research whenever the underlying quantities have to be modelled precisely. Papers usually cite it as a starting assumption and then explore where it breaks down.
In technology and industry: Engineering practice reuses Product market regulation indicator in design rules, simulations and safety margins. Knowing the idea lets you read a specification sheet and understand why the numbers look the way they do.
In the classroom: Product market regulation indicator is common in secondary-school and first-year university syllabi. It links to neighbouring topics Business law, Economic indicators, OECD, so understanding it makes those chapters shorter.
In everyday life: Look for Product market regulation indicator outside the textbook — in sport, cooking, traffic, electronics or the sky above you. An example you found yourself is remembered far longer than one you were given.

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How to study Product market regulation indicator in 20 minutes

Read the reference excerpt below once, without taking notes.
Close the page and write down what Product market regulation indicator means in your own words.
Compare your version with the excerpt and mark what you missed.
Work through the three examples above with pen and paper.
Explain Product market regulation indicator out loud to somebody else — or to Teacher Smith in the lgStudy chat.

Frequently asked questions

What is Product market regulation indicator in simple terms?

Why does Product market regulation indicator matter?

Because it connects several science ideas at once: it gives you a definition you can apply, a quantity you can calculate, and a way to check whether a result is plausible.

How should I study Product market regulation indicator?

Read the excerpt, restate it from memory, then work through the examples and applications listed on this page. The five-step study plan above takes about twenty minutes.

What does this page cover?

It gives you a compact reference excerpt plus original lgStudy explanations, examples, applications and study material on Product market regulation indicator.