Product Market Regulation : Country Note Ireland

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OECD Product Market Regulation (PMR) Indicators: How does Ireland compare? ___________________________________________________________________________________ Competitive product markets foster economic growth and can improve the living standards of citizens.

Overall PMR Indicator OECD’s Product Market Regulation Indicators assess Index scale 0 to 6 the alignment of a country’s regulatory framework with Ireland internationally accepted best practices. The Economy1.38 wide Indicator measures the distortions to competition OECD average 1.38 that can be induced through the involvement of the State in the economy, as well as the barriers to entry 5 Most competition1.00 friendly countries and expansion faced by domestic and foreign firms in 5 Least competitiondifferent sectors of the economy. This indicator is 1.82 friendly countries complemented by a set of Sector Indicators that measures regulatory barriers to competition at the level 0.0 2.0 4.0 6.0 of specific network and service sectors.

Economy-wide PMR Indicators: a breakdown by major components Index scale 0 to 6 from most to least competition-friendly regulation

6

Ireland

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

Regulatory barriers to competition in Ireland are very close to the OECD average. The regulatory framework for the public procurement of goods, services and public works is in line with key OECD best practice, as are the rules regulating the interaction between policymakers and interest groups. In addition, barriers to trade and to foreign direct investments are among the lowest in OECD. In contrast, public ownership of firms is more extensive than in many other OECD countries, and the corporate governance of SOEs could be better aligned with key OECD best practices. Furthermore, the administrative burden when firms interact with the government is one of the highest in the OECD and the licensing regime is burdensome when compared with 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

Ireland

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

Ireland

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 e-communications and in gas is among the most competition-friendly in OECD. However, there is scope for improving regulation in electricity and in some of the transport sectors. Accountants, architects and estate agents are lightly regulated, while the entry requirements and the conduct restrictions imposed on lawyers and on civil engineers are quite stringent.

Regulation in network and service sectors PMR Indicators for network sectors Index scale 0 to 6 from most to least competition-friendly regulation Ireland 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 6

Ireland

OECD average

5 most competition-friendly countries

5 Least competition-friendly countries

5 4 3 2

1 0 Lawyers

Accountants

Architects

Civil engineers

Professional services

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 Ireland are limited, but there is room for improving product market regulation in some sectors and domains.

Strengths

Challenges

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The rules regulating the public procurement of goods, services, and public works are in line with most key OECD best practice.

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The regulatory set-up in the e-communications sector is one of the most competition-friendly in the OECD. Public ownership is limited, and regulation is in line with international best practice.

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Barriers to entry in the market for accountants, architects, and estate agents are lower than in many OECD countries and there are almost no conduct restrictions. However, civil engineers and, to a greater extent, lawyers face regulatory restrictions, in particular on their conduct. For example, law firms cannot benefit from limited liability and lawyers cannot cooperate with any other regulated profession.

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The licensing regime is quite burdensome as there is no single one-stop shop for issuing all licences and permits, and accepting all notifications necessary to open up a business. In addition, there is no "silence is consent" rule to reduce waiting time to obtain their approval.

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There are currently no programs aimed at reducing the compliance costs and administrative burden imposed by the national government on firms.

There is scope to make the law-making process more transparent, as there is no requirement to draft laws using plain language, nor to publish a list of the laws that will be approved, repealed or modified in the next regulatory period.

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Given the presence of state-owned enterprises in many sectors of the economy, there is scope to improve their corporate governance. Some stateowned enterprises are not subject to private company law. The requirement to separate noncompetitive activities from potentially competitive ones only applies to some sectors. Line ministries hold the ownership rights, which leads to a lack of separation between the body that owns the stateowned enterprise and the industry regulator.

Further information 

“What are the 2018 OECD PMR indicators?” PowerPoint presentation on OECD PMR website

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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