2018 Product Market Regulation Country : Spain

Page 1

OECD Product Market Regulation (PMR) Indicators: How does Spain compare? ___________________________________________________________________________________ Competitive product markets foster economic growth and can improve the living standards of citizens. OECD’s Product Market Regulation Indicators assess the alignment of a country’s regulatory framework with internationally accepted best practices. The Economywide Indicator measures the distortions to competition that can be induced through the involvement of the State in the economy, as well as the barriers to entry and expansion faced by domestic and foreign firms in different sectors of the economy. This indicator is complemented by a set of Sector Indicators that measures regulatory barriers to competition at the level of specific network and service sectors.

Overall PMR Indicator Index scale 0 to 6

Spain

1.03

OECD average

1.38

5 Most competitionfriendly countries 5 Least competitionfriendly countries

1.00 1.82 0.0

2.0

4.0

6.0

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

6

Spain

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

Overall, regulatory barriers to competition in Spain are among the lowest in the OECD. Indeed, the country has a competition-friendly regulatory set-up in many domains and sectors. The presence of state-owned enterprises in the economy is limited and good governance of state-owned enterprises creates a level playing field between public and privately-owned enterprises. In addition, the administrative burden of interacting with the government, both for existing firms and for new firms entering the market, is quite low. Still, the use of command and control regulations could be better aligned with international best practice.

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

Spain

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

Spain

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 set-up in network sectors, in particular in energy and transport by air and water, is among the most competition-friendly in OECD. Regulatory barriers in the markets for professional services are lower than in most OECD countries, except for notaries, who face strict entry and conduct restrictions. In contrast, regulations in retail trade and the retail sale of medicines impose unnecessary constraints to competition.

Regulation in network and service sectors PMR Indicators for network sectors Index scale 0 to 6 from most to least competition-friendly regulation Spain 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 Spain 5 Most competition-friendly countries

6

OECD average 5 Least competition-friendly countries

5 4

3 2 1

0 Lawyers

Notaries

Accountants

Architects

Professional services

Civil engineers

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

While in Spain regulatory barriers to competition are among the lowest in the OECD, there is still scope for improving product market regulation in some areas.

Strengths 

Challenges

Spain fares very well in the area of evaluation and simplification of regulation. The country has implemented international best practices to ensure transparency in the policy-making process, for instance by publishing a regulatory agenda ex-ante, and by requiring the use of plain language in the drafting of regulations. In addition, there are explicit programs to reduce the compliance costs and the administrative burden imposed by the national government on enterprises, through the deployment of strategies such as e-government.

Public procurement could benefit from a better use of digital tools, for example, procurement agencies could publish all tenders documents online, and accept that firms submit their bids online.

The rules regulating the retail sale of medicines are among the most restrictive in the OECD. In particular, only pharmacies can sell prescription and non-prescription medicines and there are rigid constraints on the number, location and ownership of these outlets.

The presence of state-owned enterprises is limited, in particular in network industries. In addition, the governance of these enterprises is in line with most key OECD best practices.

Notaries are strictly regulated, more than in many OECD countries.

Regulation of water transport is the most competitionfriendly in the OECD. There is no price regulation, there are no major barriers to foreign entry, and access to the market is regulated through a lean notification system.

Further information 

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

Vitale, C., et al. (2020), "2018 Update of the OECD PMR Indicators and Database - Policy Insights for OECD and some non-OECD Countries", OECD Economics Department Working Papers

Please visit our website : http://oe.cd/pmr Contact us at: PMR2018@oecd.org