Abstract Starting in the early 1980s, advanced democracies increasingly privatized state-owned enterprises. While most research seeking to explain this phenomenon treated countries as independent units, this study analyzes whether diffusion played a role in the spread of privatization. We provide a comprehensive, cross-sectoral picture of the drivers of the diffusion of privatization. We estimate spatio-temporal autoregressive models for 20 countries between 1980 and 2019 and include theoretically grounded operationalizations for the three main mechanisms of diffusion (learning, competition, and emulation), which we tailor to the case of privatization. We find that all three mechanisms affected privatization decisions but not at all times. Rather, diffusion only occurred from the early 1990s until the financial crisis. In contrast, during the 1980s, the example had to be set before the policy instrument could spread, while after 2007 the instrument was a well-established economic policy instrument that no longer needed to spread.
Jathe et al. (Fri,) studied this question.