Regulation, Productivity and Growth: OECD Evidence This paper examines the relationship between the scope and depth of regulatory reforms and growth outcomes in OECD countries. Using new quantitative indicators of regulation, it shows that regulatory settings have become more varied in recent years, despite extensive liberalization and privatization. The paper analyzes the link between regulation and growth using data from a wide range of manufacturing and service industries over the past two decades. It focuses on multifactor productivity (MFP), which plays a crucial role in GDP growth and accounts for a significant share of its cross-country variance. The findings suggest that reforms promoting private governance and competition tend to boost productivity. Both privatization and entry liberalization are estimated to have a positive impact on productivity. In manufacturing, the gains are greater the further a country is from the technology leader, suggesting that regulation limiting entry may hinder the adoption of existing technologies. These results help explain the recent differences in growth patterns across OECD countries, particularly between large Continental European economies and the United States. Strict product market regulations and lack of regulatory reforms are likely to underlie the relatively poorer productivity performance of some European countries, especially in industries where Europe has accumulated a technology gap. The paper uses a new set of quantitative indicators of regulation to measure the extent and depth of regulatory reforms. It finds that reforms promoting private governance and competition tend to boost productivity. Both privatization and entry liberalization are estimated to have a positive impact on productivity. In manufacturing, the gains are greater the further a country is from the technology leader, suggesting that regulation limiting entry may hinder the adoption of existing technologies. These results offer an interpretation to the observed recent differences in growth patterns across OECD countries, in particular between large Continental European economies and the United States. Strict product market regulations—and lack of regulatory reforms—are likely to underlie the relatively poorer productivity performance of some European countries, especially in those industries where Europe has accumulated a technology gap (e.g. ICT-related industries). The paper also discusses the role of ownership and competition in growth. It finds that privatization and competition tend to improve productivity. The paper concludes that regulatory reforms, privatization, and competition are important for productivity growth. The findings suggest that the negative effects of more timid regulatory reforms may have been particularly strong in industries where European countries suffer from a significant technology gap.Regulation, Productivity and Growth: OECD Evidence This paper examines the relationship between the scope and depth of regulatory reforms and growth outcomes in OECD countries. Using new quantitative indicators of regulation, it shows that regulatory settings have become more varied in recent years, despite extensive liberalization and privatization. The paper analyzes the link between regulation and growth using data from a wide range of manufacturing and service industries over the past two decades. It focuses on multifactor productivity (MFP), which plays a crucial role in GDP growth and accounts for a significant share of its cross-country variance. The findings suggest that reforms promoting private governance and competition tend to boost productivity. Both privatization and entry liberalization are estimated to have a positive impact on productivity. In manufacturing, the gains are greater the further a country is from the technology leader, suggesting that regulation limiting entry may hinder the adoption of existing technologies. These results help explain the recent differences in growth patterns across OECD countries, particularly between large Continental European economies and the United States. Strict product market regulations and lack of regulatory reforms are likely to underlie the relatively poorer productivity performance of some European countries, especially in industries where Europe has accumulated a technology gap. The paper uses a new set of quantitative indicators of regulation to measure the extent and depth of regulatory reforms. It finds that reforms promoting private governance and competition tend to boost productivity. Both privatization and entry liberalization are estimated to have a positive impact on productivity. In manufacturing, the gains are greater the further a country is from the technology leader, suggesting that regulation limiting entry may hinder the adoption of existing technologies. These results offer an interpretation to the observed recent differences in growth patterns across OECD countries, in particular between large Continental European economies and the United States. Strict product market regulations—and lack of regulatory reforms—are likely to underlie the relatively poorer productivity performance of some European countries, especially in those industries where Europe has accumulated a technology gap (e.g. ICT-related industries). The paper also discusses the role of ownership and competition in growth. It finds that privatization and competition tend to improve productivity. The paper concludes that regulatory reforms, privatization, and competition are important for productivity growth. The findings suggest that the negative effects of more timid regulatory reforms may have been particularly strong in industries where European countries suffer from a significant technology gap.