The International Diffusion of Public-Sector Downsizing: Network Emulation and Theory-Driven Learning

• Published in: International organization 2006-10, Vol.60 (4), p.883-909
• Main Authors: Lee, Chang Kil, Strang, David
• Format: Article
• Language: English
• Subjects: Balance of trade; Cooperation; Diffusion; Discourses; Dominance; Downsizing; Economic development; Economic growth rate; Economic liberalism; Economic life; Economic models; Employment; Generalized method of moments; Government; Government initiatives; Government reform; Imitation; Immediate; International cooperation; International Economic Organizations; International studies; Layoffs; Learning; Liberalization; Longitudinal studies; Neoliberalism; OECD; Public Sector; Regulation; Social life; Symposium: Diffusion of Liberalism; Trade; Trade development; U.S.A
• ISSN: 0020-8183; 1531-5088
• DOI: 10.1017/S0020818306060292

We examine change in the size of the public sector between 1980 and 1997 across twenty-six Organization for Economic Cooperation and Development (OECD) member nations, with particular attention to diffusion dynamics. General method of moments (GMM) analyses demonstrate imitation of shifts in government employment within the United States and mutual influence among nations that are geographically proximate and that trade extensively. Disaggregated analyses show that downsizing is contagious while upsizing is not: proximate downsizers but not upsizers are imitated, and states act on evidence that downsizing is economically beneficial while ignoring evidence that it is harmful. We argue that these asymmetries in emulation and learning are a product of the dominance of neoliberal and managerialist discourses that legitimate and theorize shrinking the public sector.