Andorra Regulatory Quality

Andorra’s regulatory quality score, a composite measure of the government’s ability to formulate and implement sound policies and regulations, has risen from 1.27 in 1996 to 1.46 in 2025, placing the microstate 18th worldwide. The upward trajectory peaked in 2011 at 1.61, the highest level recorded over the 26‑year series, before a sharp decline to a trough of 0.86 in 2016 that briefly erased earlier gains. Since the trough, reforms in the financial sector and the adoption of EU‑aligned standards have restored confidence, propelling the score back to 1.46, a level comparable to peers such as Monaco (1.46) and Lithuania (1.47). The recent improvement suggests that continued alignment with international best practices and further digitalisation of administrative procedures could sustain the positive momentum, while any reversal in fiscal discipline or regulatory enforcement would risk a relapse toward lower scores.