Why can privatization and new public management reforms spread across different countries?

The spread of privatization and new public management (NPM) reforms across different countries is driven by a combination of fiscal pressures, external mandates, and the global diffusion of policy ideas.

In developed nations, the primary impetus for these reforms was often fiscal crisis. As state revenues declined—frequently following oil crises—and welfare expenditures rose, governments sought cost-cutting solutions, leading to the adoption of market-oriented management techniques. In contrast, for developing and transitional states, the spread of these reforms was largely driven by external pressures, particularly through structural-adjustment programs.1

From the perspective of neoinstitutionalism, the diffusion of such reforms is also a subject of study regarding how regulatory models travel across borders. Researchers investigate the mechanisms of "regulatory emulation," connecting the adoption of these practices to broader trends in liberalization and globalization. While some reforms are identified with specific political leaders, others spread as states attempt to manage policy agendas within changing institutional settings, often influenced by the global expansion of capitalism.23