Do small municipalities imitate larger ones? Diffusion of water privatization policies

Studies on local services privatization have traditionally focused on factors such as pragmatic, ideological and political issues, with little attention paid to the option of policy diffusion processes. The main contribution of this paper consists of introducing the possibility that local policymakers can be influenced by policy adopted by other local governments. The presence of a policy diffusion process, which explains part of the decision to privatize, is expected. Three new variables, not considered in previous studies, are introduced in order to test three hypotheses of policy diffusion. In doing so, data from 755 municipalities in Andalusia (southern Spain) for the period 1995–2013 are used. For data analysis a Logit Multilevel Model is applied. Results confirm the importance of the mechanisms of policy diffusion when adopting privatization policies.