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Contents | Executive Summary | How to obtain this publication | Additional information
The following OECD assessment and recommendations summarise Chapter 4 of the Economic survey of the Slovak Republic published on 5 April 2007.
Contents
Sector specific product market regulation and shortcomings in public sector efficiency still hold back productivity performance
While general economic regulation is conducive to competition, the cost to businesses of administrative regulation is still high in some instances. Regulation in the professional services and in network industries needs to become more conducive to competition. Government ownership is still high in network industries. Measures mentioned below would intensify product market competition and could raise the purchasing power of labour earnings, aggregate employment and productivity, as well as the resilience of the economy to shocks:
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Competition is not yet established in the energy market. Measures to overcome fragmentation of markets in the region along national borders would offset the impact of high market concentration. Inter alia, the transmission network over which energy demand and supply are balanced should be extended beyond national borders in co-operation with neighbouring countries. A short-term power trading facility should be established seeking co-operation with the Czech Republic. Measures to prevent non-price discrimination need to be strengthened. The network regulator should oblige network operators to make information on network access conditions widely available to market entrants. The regulator should impose more specific obligations on the gas and electricity network operator. For example, rules on the sharing of network connection costs should be set. Authorisation procedures for the construction of new power plants should be streamlined. Further entry of private capital should be encouraged as part of a strategy to make framework conditions more conducive to competition.
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Regulation of the telecommunications sector needs to encourage competition more vigorously. Government ownership of the telecommunications incumbent can give rise to perceptions of conflicts of interest. The lack of budgetary independence of the regulator compromises its independence, which may further deter market entry of competitors. Delays in the introduction of remedies to foster competition in fixed line telephony services should be reduced. The government share in the telecommunications incumbent operator should be privatised. The independence of the telecommunications regulator should be strengthened by moving its budget out of the budget of the Ministry of Transport.
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The preconditions for competition in the railway industry need to be put in place. Government subsidies are directly disbursed to the government-owned passenger transport operator, which discourages market entry. The subsidies should instead be used to lower high network access prices or be made contestable through the tendering of public service obligations.
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Administrative burdens on enterprises create entry barriers. For example, different payment procedures are in place for the payment of various social security contributions. Costs of dealing with licenses also appear high by international comparison. These costs should be reduced and payment procedures for social security contributions should be unified.
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Deregulation of professional services needs to continue. Compulsory chamber membership should be abolished. The chambers of the professions should not have powers to take decisions concerning the regulation of activities of professional enterprises. Entry requirements with regard to experience that are specific to setting up a business should be abolished. Restrictions on the legal form of business should be eased.
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Management capacity and accountability of the judicial sector still needs to be strengthened. While legislation has been introduced to increase the share of public procurement advertised through a contract notice, scope remains to improve competition. Public sector reform needs to continue to strengthen contract enforcement and improve competition in public procurement.
General economic regulation and costs of administrative communication, rules and procedures across OECD countries, 2003
Source: OECD, Indicators of Product Market Regulation.
How to obtain this publication
The Policy Brief (pdf format) can be downloaded. It contains the OECD assessment and recommendations but not all of the charts included on the above pages.
The complete edition of the Economic survey of the Slovak Republic 2007 is available from:
- SourceOECD for subscribing institutions and many libraries
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OLISnet, under "Publication Locator", for government officials with accounts ( subscribe)
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Additional information
For further information please contact the Slovak Republic Desk at the OECD Economics Department at eco.survey@oecd.org. The OECD Secretariat's report was prepared by David Carey and Andres Fuentes under the supervision of Patrick Lenain.
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