2006 OECD Economic Surveys: Netherlands 2006

image of OECD Economic Surveys: Netherlands 2006

This 2005 OECD Economic Survey of the Dutch economy (published as the second issue in the 2006 volume) examines key economic challenges including putting public finances on a sustainable path, increasing resiliency in labour markets, strengthening product market competition, and improving the environment for innovation. As always, it assesses short-term prospects and provides a series of policy recommendations.

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Further Improvement of Product Market Competition, Especially in Services

This chapter discusses options for further product market reform, especially in services, so as to increase productivity growth. It identifies the main regulatory barriers to product market competition based notably on the OECD Product Market Regulation database. Reducing the barriers to entrepreneurship prevailing in the Netherlands – in particular, the licence and permit procedures – and preventing distortions from state control are important to foster competition and productivity growth. The chapter notably sheds light on the barriers in the distribution and finance sectors, which appear to have hindered the profitable use of ICT in these sectors. Competition seems to be weak in the Dutch retail sector due to strict regulations that limit entry of (large) stores and restrict shop opening hours. As well, the lack of integration of the retail financial market across the European Union seems to be an important obstacle to productivity growth in the financial sector.

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