The paper argues that international organizations and economic problems interact to cause policy diffusion. Economic problems cause country i to look for successful policies abroad. International organizations serve as information channels, transmitting information about successful policies between sender country j and receiver country i. These two factors interact: Joint membership in international organizations should increase the likelihood that country i imitates country j, but only if country i faces economic problems. Economic problems should increase the likelihood that country i imitates country j, but only if they share many joint memberships in international organizations. The argument is corroborated by an quantitative analysis of privatization policies in the OECD world. A multilevel logit model shows that joint membership in international organizations and economic problems increase the likelihood of policy imitation, and clearly demonstrate the interaction between both factors.
