Global economic policies, especially liberalizations, have become widespread over the last three decades. However, current political economy models don't fully explain these trends.
Data & Methods
This study examines how countries adopt similar foreign economic policies by analyzing policy transitions across nations and tracking liberalization efforts on key accounts (current account, capital account) and exchange rate regimes.
Our findings challenge domestic-focused explanations. Evidence shows that international competition significantly drives foreign economic policymaking. Countries are also influenced by their sociocultural peers through a process we call "channeled learning"—a form of policy diffusion where governments search for suitable models to implement in their economies.
Key Findings
- International economic competition strongly motivates liberalization decisions
- Sociocultural similarity increases the likelihood of adopting similar policies
- Countries look abroad not just when they face pressure, but proactively seeking solutions
These insights suggest political scientists must consider both global pressures and peer learning to understand economic policy diffusion.
