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Rethinking professional services regulation: New evidence from the OECD Product Market Regulation Indicators
Professional services play a central role in modern economies, both as providers of high-skilled services and as key inputs into a wide range of downstream activities. While regulation of these services is commonly justified by information asymmetries and negative externalities, concerns persist that regulatory frameworks may exceed what is necessary to protect consumers and limit negative spillovers, thereby restricting entry, limiting competition, and reducing productivity. This paper examines how six professions - lawyers, notaries, accountants, architects, civil engineers, and real estate agents - are regulated across fifty countries, drawing on the OECD Product Market Regulation (PMR) database and indicators. It documents substantial cross-country and cross-profession variation in entry and conduct rules, with licensing remaining the dominant regulatory model and restrictive entry requirements more prevalent than conduct restrictions. The analysis shows that many regulatory approaches appear poorly aligned with the actual risks posed by professional activities and that demand-side tools remain underdeveloped. The findings suggest scope for reform through the recalibration of entry requirements, reduction in conduct restrictions, and stronger consumer-facing mechanisms. Aligning regulation more closely with market failures could expand access to professional services, support geographic and social mobility, increase competition, and generate productivity gains across the wider economy.
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