# **Box A1. The low-level PMR indicators**

There are 16 low-level indicators in the PMR system. These indicators cover a wide range of product market policies and include:

# **INWARD ORIENTED POLICIES**

# **<u>State control: Public ownership</u>**

**_Scope of public enterprises_** : this indicator measures the pervasiveness of state ownership across business sectors as the proportion of sectors in which the state has an equity stake in at least one firm.

**_Size of public enterprise_** : reflects the overall size of state-owned enterprises relative to the size of the economy.

**_Direct control over business enterprises_** : measures the existence of government special voting rights in privately-owned firms, constraints on the sale of state-owned equity stakes, and the extent to which legislative bodies control the strategic choices of public enterprises.

# **<u>State control: Involvement in business operations</u>**

**_Price controls_** : reflects the extent of price controls in specific sectors.

**_Use of command and control regulation_** : indicates the extent to which government uses coercive (as opposed to incentivebased) regulation in general and in specific service sectors.

# **<u>Barriers to entrepreneurship: Regulatory and administrative opacity</u>**

**_Licenses and permits systems_** : reflects the use of ‘one-stop shops’ and ‘silence is consent’ rules for getting information on and issuing licenses and permits.

**_Communication and simplification of rules and procedures_** : reflects aspects of government’s communication strategy and efforts to reduce and simplify the administrative burden of interacting with government.

# **<u>Barriers to entrepreneurship: Administrative burden on corporations</u>**

**_Administrative burdens for corporations_** : measures the administrative burdens on the creation of corporations.

**_Administrative burdens for sole proprietors_** : measures the administrative burdens on the creation of sole proprietor firms.

**_Sector-specific administrative burdens_** : reflects administrative burdens in the road transport and retail distribution sectors.

# **OUTWARD ORIENTED POLICIES**

# **<u>Barriers to entrepreneurship: Barriers to competition</u>**

**_Legal barriers_** : measures the scope of explicit legal limitations on the number of competitors allowed in a wide range of business sectors.

**_Antitrust exemptions_** : measures the scope of exemptions to competition law for public enterprises.

# **<u>Barriers to trade and investment: Explicit barriers</u>**

**_Tariffs_** : calculated as the (simple) average of most-favoured-nation tariffs. **_Foreign Ownership barriers_** : reflects legal restrictions on foreign acquisition of equity in public and private firms and in the telecommunications and airlines sectors.

**_Discriminatory procedures_** : reflects the extent of discrimination against foreign firms at the procedural level.

# **<u>Barriers to trade and investment: Regulatory barriers</u>**

**_Regulatory barriers_** : reflects other barriers to international trade ( _e.g._ international harmonisation, mutual recognition agreements).

_______________________________ Source: reproduced from Conway, Janod and Nicoletti, 2005 31