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.An earlier
version of this article was given at the International Diffusion of
Political and Economic Liberalization Conference, Harvard University,
October 2003. We thank Frank Dobbin, Geoffrey Garrett, and Beth Simmons
for organizing the conference and this symposium; Sarah Babb, Jeeyang
Baum, Torben Iversen, Michael Mann, Steve Morgan, Fred Pampel, Deok-Seob
Shim, conference participants, and IO's editor and reviewers
for their helpful comments; and Thomas Cusack for his generosity in
sharing public employment data.