The Decision to Privatize as an Economic Policy Idea: Epistemic Communities, Palace Wars, and Diffusion

We would like to acknowledge financial support of INSEAD and the University of Texas and the comments of Frank Dobbin and other members of the working group on the International Diffusion of Democracy and Markets. Andrew Spicer has been an important inspiration for many of the ideas in this paper. 2 Abstract The diffusion of economic ideas is often attributed to a homogenization of world culture that instructs policymakers, despite different national contexts, to adopt common policies. Our analysis below supports the broad contention of diffusion of privatization as an idea, while underscoring the heterogeneity, or " palace wars " , among ideological stances within an epistemic community. The results show that the diffusion of privatization as an idea was significantly affected by American-trained (and particularly Chicago-trained) economists in the adopting countries. Diffusion of privatization as an economic idea reflects less a learning or emulation of better policies, but the dynamics of discourse and ideology among knowledgeable individuals in a globally dispersed epistemic community.