A Contagious Concept: Explaining the Spread of Privatization in the Telecommunications Sector

Abstract

Qualitative studies suggest that the spread of privatization of public utilities is due to a change of the economic paradigm and institutional isomorphism pressures. However, current quantitative studies mostly account for domestic factors. These factors can explain differences in national privatization trajectories but cannot explain the large trend. Based on a quantitative analysis of privatizations in the telecommunications sector in 21 OECD countries, the article argues that emulation pressures can explain the trend toward privatization. The analysis suggests that privatization gained legitimacy as more and more governments emulated privatization policies they observed in countries they perceived as similar. However, the article finds no evidence of cross-sectoral diffusion. Thus, according to the analysis, telecommunications privatization diffused within the same sector between countries, but not within the same country between different sectors. © 2010 Wiley Periodicals, Inc.