# **<mark>Box 1: The 18 low-level PMR indicators</mark>**

<mark>The domain</mark> **<mark>State control</mark>** <mark>reflects the extent to which governments influence firm decisions through public ownership, price controls or other forms of coercive – instead of incentive-based – regulation. This consists of:</mark>

- **_<mark>Scope of public enterprises</mark>_** <mark>: measures the pervasiveness of state ownership across business sectors as the proportion of sectors in which the state controls at least one firm.</mark>

- **_<mark>Government involvement in network sectors</mark>_** <mark>: measures the extent of public ownership in the energy, communications and transport sectors.</mark>

- **_<mark>Direct control over business enterprises</mark>_** <mark>: 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 (for OECD and accession countries this is based on more disaggregated data as compared to other non-member countries).</mark>

- **_<mark>Price controls</mark>_** <mark>: reflects the extent of price controls in competitive sectors, such as air travel, retail trade, road freight, professional services, and mobile communications.</mark>

- **_<mark>Use of command and control regulation:</mark>_** <mark>indicates the extent to which government uses coercive (as opposed to incentive-based) regulation in general and in specific service sectors.</mark>

<mark>The domain</mark> **<mark>Barriers to entrepreneurship</mark>** <mark>reflects obstacles to easy access to information on existing regulation, general or sector-specific administrative burdens for business start-ups and other general or sector-specific regulations that hinder entry of firms. It consists of:</mark>

- **_<mark>Licenses and permits systems:</mark>_** <mark>reflects the use of „one-stop shops‟ and „silence is consent‟ rules for getting information on and issuing licenses and permits.</mark>

- **_<mark>Communication and simplification of rules and procedures:</mark>_** <mark>reflects aspects of government’s communication strategy and efforts to reduce and simplify the administrative burden of interacting with government.</mark>

- **_<mark>Administrative burdens for corporations:</mark>_** <mark>measures the extent of administrative burdens on the creation of corporations.</mark>

- **_<mark>Administrative burdens for sole proprietors:</mark>_** <mark>measures the extent of administrative burdens on the creation of sole proprietor firms.</mark>

- **_<mark>Sector-specific administrative burdens:</mark>_** <mark>reflects administrative burdens in the road transport and retail distribution sectors.</mark>

- **_<mark>Legal barriers:</mark>_** <mark>measures the pervasiveness of barriers to entry across business sectors as the proportion of sectors in which there are explicit legal limitations on the number of competitors.</mark>

- **_<mark>Antitrust exemptions:</mark>_** <mark>measures the scope of exemptions to competition law for public enterprises</mark> _<mark>.</mark>_

- **_<mark>Barriers to entry in network sectors:</mark>_** <mark>measures various kinds of entry barriers in network sectors, as well as the degree of vertical integration in energy, rail transport and telecommunication sector.</mark>

- **_<mark>Barriers to entry in services:</mark>_** <mark>measures barriers to entry in retail trade and professional services.</mark>

<mark>The domain</mark> **<mark>Barriers to trade and investment</mark>** <mark>captures barriers to foreign ownership of firms, tariffs and other non-tariff barriers to trade. It consists of:</mark>

- **_<mark>Barriers to foreign direct investment (FDI):</mark>_** <mark>measures general and sector-specific restrictions on foreign acquisition of equity in public and private firms, obligatory screening procedures and operational controls for affiliates of foreign firms (e.g. nationality requirement for key personnel). For OECD and accession countries, sector-specific barriers to FDI are measured by the FDI restrictiveness index.</mark>

- **_<mark>Tariffs:</mark>_** <mark>reflects the average of most-favored-nation tariffs, computed from detailed product data on tariffs. For OECD countries, tariffs are computed based on more detailed data and more elaborated aggregation as compared to non-member countries.</mark>

- **_<mark>Discriminatory procedures:</mark>_** <mark>reflects the extent of discrimination against foreign firms at the procedural level.</mark>

- **_<mark>Regulatory barriers:</mark>_** <mark>reflects other non-tariff barriers to trade, such as mutual recognition agreements or international harmonization.</mark>

_<mark>Source: Wölfl et al. 2009</mark>_ 7