2019 OECD Economic Surveys: Portugal 2019

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Portugal’s economic recovery is now well established, with GDP back to its pre-crisis level. However, legacies of the recent crisis remain. A high public debt burden and ongoing financial sector vulnerabilities make the economy less resilient. The country is also facing a rapidly ageing population. In this context, there should be a continued focus on getting unemployed or marginalised workers back into jobs and promoting productivity growth. The latter will further boost the external competitiveness of the economy. Existing strict regulations in some sectors including professional services and transport harm productivity prospects, as do those that hold back competition in the ports. However, the institutions implementing regulations also matter. Improving judicial efficiency is particularly important in this regard. Recent reforms have lowered the time to resolve a court case, but it remains long. The information system that registers court proceedings should thus be better utilised and the courts should be granted stronger autonomy in managing their resources.





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Enhancing judicial efficiency to foster economic activity

A well-functioning justice system is indispensable to business activity and to a society as a whole. Judicial efficiency measured by trial length, one of the essential factors in the effectiveness of the justice system, ensures contract enforcement, which is the basis of market transactions. Judicial efficiency is closely associated with accessibility to judicial services and the certainty of judicial decisions, raising people’s confidence. Portugal has undertaken numerous judicial reforms in the past, to the extent that it is difficult to disentangle and evaluate fully the effects of each reform. Overall, judicial efficiency remains weak, as reflected in the average trial length and bottlenecks in a number of courts. The data collection system, significantly developed as part of the reforms, can be more fully utilised for allocating court resources. The autonomy of the judicial council and court presidents can also be strengthened so that they can effectively manage resources. Individual judges can be better incentivised through performance-oriented evaluation. Competition in the legal profession sector can be enhanced while increasing the transparency of legal services. Also, alternative dispute resolution mechanisms can be developed further, meeting different needs for judicial services, in particular those on insolvency, while alleviating court congestion. Finally, building on past and ongoing reform efforts, the judicial system should continue to improve the capacity to undertake forensic investigations of economic and financial crimes.


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