we focus on the cross-sectional dimension of the database and look at the year 2017 in the analysis that follows. Details on the coverage of countries, sectors and measures in the OECD’s STRI database are included in Annexes A, B and C, respectively. The database also provides the source of information on each measure, sector and country as well as additional information as comments.

A quick look at some of these measures illustrates how they impose unnecessary costs on Mode 4 service providers and why eliminating such measures or making them less stringent is likely to liberalize (as opposed to facilitate) Mode 4 trade. For instance, the requirement of prior nationality or citizenship to practice or that foreign service providers need to take a local exam or completely re-do the university degree, practice and exam in the domestic country are unnecessarily restrictive and can be eliminated or toned down sufficiently. Similarly, relaxing labor market tests and quotas for contractual service suppliers (CSSs), independent service suppliers (ISSs) and intra-corporate transferees (ICTs) as well as limitations on the duration of their stay in the importing countries is likely to go a long way in liberalizing Mode 4 trade. In contrast, two measures in the STRI MNP data relate to laws or regulations that establish a process for recognizing qualifications gained abroad and these need to be encouraged in the context of Mode 4 trade liberalization.

For the purpose of analysis in this paper, we convert the main Yes/No response to 24 of the 27 qualitative measures in the OECD STRI database for the year 2017 into a binary quantitative index where N=0 and Y=1.<sup>4</sup> To provide an aggregate picture of the MNP restrictive regulatory landscape, we average the constructed index across measures and sectors by country such that the higher the score, the more restrictive is the country (including in a particular sector or for a particular measure). Illustratively, for the measure “foreign providers have to completely re-do the university degree, practice and exam in the domestic country”, Switzerland had an average score of 0.33 across sectors in the year 2017 compared to an average score of 0.5 in the case of Estonia and 0 in the case of Australia. This suggests that while this particular measure was not a requirement in Australia in the year 2017, it was applicable to more sectors in Estonia than in Switzerland.

The average restrictiveness towards MNP in the year 2017 for the 45 countries covered by the OECD STRI data is presented in Figure 1. The average scores range from 0.10 in the case of Colombia (at the bottom end of the distribution) to 0.72 for Russia (at the top end). The average score for non-OECD countries (0.34) is found to be lower than that for OECD (0.40) as Colombia, Latvia and Costa Rica are among the least restrictive countries in this sample in terms of policies towards MNP while nine of the top ten most restrictive MNP countries (with the exception of Russia at the top) belong to the OECD.

Annex Table 1 reports the average restrictiveness of policies towards MNP by sector in the year 2017 for the 45 countries covered by the OECD STRI data. Our analysis shows that sectors with the most restrictive MNP policies include: Audiovisual services – Broadcasting (16); Insurance services (15); Insurance services – Actuaries (16); Insurance services – Broking and Agency (33); Legal services – Domestic Law (18); Rail freight transport services (19); and Road freight transport services (21). The numbers in parentheses indicate the number of countries for which the average restrictiveness in the concerned sector is at least 0.5. In contrast, sectors with the least restrictive policies towards MNP include: Legal services –

> 4 Note that the two measures relating to laws or regulations that establish a process for recognizing qualifications gained abroad are reverse coded (i.e. N=1 and Y=0) in our analysis.

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