1. The OECD Product Market Regulation Indicators

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Table 2. Overview of scope for improvement in sectoral PMR indicators

Broad sector Network sectors

Energy

Transport

E-Communications

Services sectors

Electricity Natural Gas by Rail by Air by Road by Water Fixed Mobile

Low-level indicator

Lawyers Notaries Accountants Architects Civil engineers Estate agents Retail Distribution Retail Sales of Medicines

Scope for improvement

Note: Scope for improvement is given by size of the gap with the OECD average relative to the standard deviation across OECD countries. The number of asterisks indicates whether the gap is 1, 2, 3, 4 or 5 or more standard deviations.

1. The OECD Product Market Regulation Indicators

The OECD Product Market Regulation (PMR) indicators measure a country’s regulatory barriers to competition. The Economy-wide PMR Indicator provides an overall measure of the quality of product market regulation across a variety of sectors and regulatory domains. In addition, a set of Sector PMR Indicators quantify regulatory barriers to firm entry and competition at the level of specific network and service sectors. The PMR indicators were first calculated in 1998, and they have been updated every five years since then. Initially the database comprised OECD member countries, but with time, it has expanded to include non-member countries. Indonesia was first included in 20131 .

The PMR indicators deepen the knowledge of regulatory practices in individual countries and allow researchers to investigate their link with economic performance. Over time, the PMR indicators have become an essential element of the OECD’s policy analysis toolkit. They are used in OECD Economic Surveys of member and non-member countries and form an integral part of the Going for Growth exercise to identify reform priorities and formulate recommendations. These indicators and their underlying database are also widely employed by national governments, other international organisations (for example, the IMF, World Bank, and European Commission), and international forums, such as the G20 and APEC, to determine areas for regulatory change2. Academics and research institutions also use the PMR indicators in their research.

1 The OECD also computed the PMR indicators for the 2008 Economic Assessment of Indonesia, but these values are not in the PMR database that is available on the OECD PMR webpage. 2 For example, the PMR indicators have constituted key inputs into OECD deliverables to the G20, such as the G20 Enhanced Structural Reform Agenda and the IMF-led Strong Sustainable and Balanced Growth reports. The PMR is one of the indicators chosen by the APEC secretariat to evaluate progress on structural reform. In addition, for many years the European Commission has been key user of OECD PMR indicators to identify priorities for reforms in EU countries. Further, since 2013, the World Bank has been co-operating with the OECD in broadening the coverage of

PRODUCT MARKET REGULATION IN INDONESIA: © OECD 2021