Since the 1970s, market‐based economic policies have been institutionalized as a nearly global policy paradigm. Using four national case studies, this article shows that economic and financial globalization played a critical role in fostering the transition to neoliberal policies, but that local institutional conditions were decisive in shaping the nature and meaning of the shift. While the analysis finds that developing countries appear more dependent upon direct external pressures than developed ones, it also shows that institutionalized patterns of state‐society relations determined the way in which neoliberal transitions were carried out, somewhat irrespectively of the level of economic development. In Chile and Britain, poorly mediated distributional conflict created the ideological conditions for a “monetarist” revolution. In Mexico and France, on the other hand, neoliberalism was understood mainly as a necessary step to adapt the country to the international economy.