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This study seeks to contribute to the policy transfer literature through a comparison of the British “Next Steps” initiative of agencification (i.e., organizational separation of policy implementation from policy formulation in central departments) and the Japanese reform that officially proclaimed to be inspired by the British example. In addition to confirming the crucial role played by domestic structural constraints in producing variant outputs in different countries, this article also shows that the transfer of policy ideas can be a highly proactive political process in which political actors in the learning country interpret and define both problems and solution as they “borrow” from another country. [ABSTRACT FROM AUTHOR]