From civil servants to liberal professionals: an empirical analysis of the reform of Portuguese notaries

Abstract

The use of market mechanisms has been progressively introduced as an alternative solution to public service delivery since the 1980s. This work addresses an uncommon public service function – civil law notaries – and seeks to analyse the factors that led to the formation of diverse market structures as a result of the choice of the privatization path over civil service status by public notaries. The Portuguese government gave public notaries the choice of becoming private, and regulated a numerus clausus of notaries by district. Since the reform was completed, a diversity of market structures have prevailed throughout the 278 notarial districts. Our key hypothesis is that markets with multiple agents formed in jurisdictions having a larger and more profitable number of notary and legal acts that provided financial survival and profit. In contrast, monopolies formed as a result of a perceived absence of market opportunities and demand. During the period 2010–11 we collected data from official statistics of the notary system supplemented by data on the economic and demographic features of each jurisdiction. Multinomial logistic regression is used to test the key hypothesis regarding market arrangements in the 278 notarial districts of continental Portugal.

Points for practitioners

The trend in the deregulation of the notary profession is likely to continue to sweep European Union countries. Lessons can be drawn from the Portuguese experience, where the change from civil service status is not yet mandatory for all notaries, but financial constraints and fiscal pressures indicate privatization as the inevitable path.