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Privatization and the Diffusion of Innovations

By Vanessa Bouché and Craig Volden


The privatization of government services tends to bring about a more rapid adoption of innovative policies due to the competitive pressures of the market. In federal systems, however, the diffusion of innovations across subnational governments may offset such benefits of privatization. In this study, we test whether county governments that have privatized their provision of foster care services are more or less likely to adopt policy innovations and more or less likely to learn from the policies of other counties than are those that have resisted privatization. We explore the diffusion of four innovative foster care policies across 384 counties in five states between 1995 and 2006. We find that the initial innovativeness arising from the market competition of privatization is counterbalanced by learning across public diffusion networks. Privatization and the Diffusion of Innovations An age-old question in political economy is which goods and services should be provided b

Year: 2010
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