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International Coercion, Emulation and Policy Diffusion: Market-Oriented Infrastructure Reforms, 1977-1999

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Author Info
Witold J. Henisz ()
Bennet A. Zelner ()
Mauro F. Guillen ()

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Abstract

Why do some countries adopt market-oriented reforms such as deregulation, privatization and liberalization of competition in their infrastructure industries while others do not? Why did the pace of adoption accelerate in the 1990s? Building on neo-institutional theory in sociology, we argue that the domestic adoption of market-oriented reforms is strongly influenced by international pressures of coercion and emulation. We find robust support for these arguments with an event-history analysis of the determinants of reform in the telecommunications and electricity sectors of as many as 205 countries and territories between 1977 and 1999. Our results also suggest that the coercive effect of multilateral lending from the IMF, the World Bank or Regional Development Banks is increasing over time, a finding that is consistent with anecdotal evidence that multilateral organizations have broadened the scope of the “conditionality” terms specifying market-oriented reforms imposed on borrowing countries. We discuss the possibility that, by pressuring countries into policy reform, cross-national coercion and emulation may not produce ideal outcomes.

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Paper provided by William Davidson Institute at the University of Michigan Stephen M. Ross Business School in its series William Davidson Institute Working Papers Series with number 2004-713.

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Length: 74 pages
Date of creation: 01 Jul 2004
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Handle: RePEc:wdi:papers:2004-713

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Related research
Keywords: Privatization; deregulation; liberalization; infrastructure; International Monetary Fund (IMF); World Bank; Multileral Institutions; Development; Reform; Globalization; Adoption; International;

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Find related papers by JEL classification:
O19 - Economic Development, Technological Change, and Growth - - Economic Development - - - International Linkages to Development; Role of International Organizations
F02 - International Economics - - General - - - International Economic Order; Noneconomic International Organizations;; Economic Integration and Globalization: General
F42 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - International Policy Coordination and Transmission
H11 - Public Economics - - Structure and Scope of Government - - - Structure and Scope of Government
L33 - Industrial Organization - - Nonprofit Organizations and Public Enterprise - - - Boundaries of Public and Private Enterprise; Privatization; Contracting Out
L96 - Industrial Organization - - Industry Studies: Transportation and Utilities - - - Telecommunications
L94 - Industrial Organization - - Industry Studies: Transportation and Utilities - - - Electric Utilities
N70 - Economic History - - Economic History: Transport, International and Domestic Trade, Energy, and Other Services - - - General, International, or Comparative
P16 - Economic Systems - - Capitalist Systems - - - Political Economy of Capitalism
C41 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods: Special Topics - - - Duration Analysis

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References listed on IDEAS
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Cited by:
(explanations, Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.)

  1. Maria Victoria Murillo, 2006. "Policymaking under Globalization Pressures: Reforming Public Utilities in Latin America," Working Papers id:755, esocialsciences.com. [Downloadable!]
  2. Estache, Antonio & Goicoechea, Ana, 2005. "A"research"database on infrastructure economic performance," Policy Research Working Paper Series 3643, The World Bank. [Downloadable!]
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