OECD PMR Indicators on professional services: top performances or outliers? The inhomogeneity of the civil law notaries’ cluster may bias the assessment on the administration of the justice

Abstract

The article passes in review the PMR indicators on notary regulation underscoring that the inhomogeneity of the cluster produces a large gap between minimum and maximum values. If we only consider “civil law notaries”, we can obtain more genuine picture of the reality. Since notaries exercise public functions within the administration of the justice (public good), they need a high level of regulation which is indeed empirically observed in the more homogeneous adjusted distribution (considering only notaries with comparable functions). In the case of notaries, in order to overcome market failure, higher regulation would be needed to ensure higher protection for the average consumer. The analysis of the legislative framework of Sweden, USA, Costa Rica and Israel clearly shows the inconsistency of the PMR notarial cluster as well incompatibilities with the OECD definitions of the notarial profession. Once sharpened the frontiers of the sample, excluding units belonging to a different distribution, notaries presents homogenous higher distribution of the PMR “regulatory score”. The inverse relation between regulation (PMR) and “cost” and the positive correlation between PMR score and quality (Cappiello 2022) in conjunction with the EXCAS study on the better performances of the civil law notaries countries compared to countries using different systems (World Bank indicators of the property transfers of the civil law notaries, are used to make a comparison among countries), it seems to confirm the paternalistic need of the adoption of a civil law notary system. The analysis of the homogenous cluster of civil law notaries completely reverses the benchmark thresholds of the OECD PMR indexes. Contrary to the OECD PMR general vision that “less regulated is better”, the top five PMR average score (countries with lowest notarial regulation) is in fact associated with high average costs, while the highest five PMR average score (countries with highest notarial regulation) is associated with low average costs for the consumer. Therefore, if a country presents a notarial PMR value above the OECD AVG (a level of notarial regulation above the OECD average), it would be empirically considered an advantage (because it produces lower cost, efficiency and higher quality) rather than a signal for deregulation as actually proposed by OECD.