**Table 1: Examples of measures, level of restriction and associated score**

|**Level of restriction **|**Examples**|**Score**|
|---|---|---|
|Not restrictive|No restriction on the type of legal entity, no foreign<br>equity limitation|0|
|Not restrictive, but minimal<br>transparencyissue|No provision for prior notice of, or comment on,<br>regulatory changes|0.125|
|Minor restriction|Acquisition of land and real estate by foreigners<br>prohibited|0.25|
|Neither minor nor major|Limit on number of suppliers|0.5|
|Major restriction|Service<br>provision<br>is<br>reserved<br>for<br>statutory<br>monopoly or granted on an exclusive basis|0.75|
|Closed|Commercial presence is prohibited|1|

While in Borchert et al. (2012), five numerical levels of restriction were used (0, 0.25, 0.5, 0.75, 1), this time we decided to use six numerical levels, by adding 0.125 in between 0 and 0.25. The objective was to accommodate those regulatory measures that were not included in the previous World Bank data set (e.g. publication of draft regulation and opportunity to comment). The aim is to take account of measures that are aspects of the regulatory environment rather than restrictions, not even minor ones, in regard of the actual supply of services but that can nevertheless adversely affect the policy or regulatory environment in which firms operate.<sup>22</sup> The full list of measures and associated scores is provided in Annex 5. In addition to mapping scores directly to individual measures, more sophisticated rules are applied for certain measures (e.g. numeric type measures), or some combinations of entry measures (e.g. taking into account the complementarity or substitutability between individual mode 4 categories, and the necessity to consider additional measures if certain conditions are met). This section will present the methodology that applies to some of those specific cases.

# _Numeric type measures_

In the set of measures that we consider in the scoring for mode 3, we include two numeric type measures linked to the foreign ownership of firms, namely the maximum foreign ownership allowed in greenfield investment (%) and the maximum foreign ownership allowed in the acquisition of a domestic entity (%). Foreign equity limits are a continuous variable ranging from zero (no foreign equity allowed), to 100% (full foreign ownership allowed). Given that there are two types of foreign equity limits (greenfield and acquisition), the maximum score available for each is 0.5. These measures are scored in five different ways depending on the maximum foreign ownership allowed, as shown below.

<!-- Start of picture text --> 100% allowed 0<br>Between 50 and 99% allowed 0.125<br>Between 26% and 49% allowed 0.25<br>Between 0% and 25% allowed 0.375<br>0% allowed 0.5 23<br><!-- End of picture text -->

> 22 Sometimes policies apply in a more granular fashion than may be captured by our definition of measures or sectors. In this case we prorate the impact. The leading case is when a measure affects only parts of a market that we define as a subsector, e.g. only deposit taking is allowed in commercial banking, or, for non-life insurance, restrictions apply only to automobile insurance, which however is only one segment of nonlife insurance. In such cases we record the restrictiveness in the pertinent or closest measure but reduce the score of that measure appropriately so as to reflect the fact that the restrictiveness affects only part of the service supplying activity.

> 23 If other forms of commercial presence can be used to provide the service for certain sectors (e.g. branches, sole proprietorship, partnership), then the restrictiveness scores assigned are adjusted proportionally to the relevance of this form in the supply of services through mode 3. See subsection on synthetic measures and Annex 5 for more information.

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