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Studies on innovation and diffusion have uncovered the mechanisms and dynamics that govern the development and spread of policies across state and local governments. However, despite extensive research on policy diffusion mechanisms, there remains a noticeable lack of a unified definition and measurement of these mechanisms, particularly neglecting the role of public managers and the intentions of individual policymakers in the diffusion process. Additionally, most studies tend to concentrate on general policy diffusion process, paying less attention to the adoption patterns and mechanisms of public policies concerning institutional reform. This study empirically explores policy innovation and diffusion mechanisms using the establishment of data bureaus in China as a case study. The paper first traces the emergence and spread of the data bureau as a policy model, collecting data from 292 prefectural-level cities and 4 centrally administered municipalities in China. The study then examines how economic conditions and urban population sizes influence policy adoption and analyze the rationale behind the adoption of new policies through imitation, competition, and coercion mechanisms. The findings reveal that the personal motivations of policymakers, driven by career advancement incentives, significantly influence policy adoption decisions. These findings affirm the existing literature and contribute theoretically by redefining how competition mechanisms are measured. This paper highlights the importance of individual policymakers’ aspirations, particularly regarding policies adopted for career advancement. This approach offers a detailed perspective on the dynamics of policy diffusion, emphasizing agent-based decision-making processes. Additionally, the results provide new insights into the inter-regional political promotion tournaments in China, illustrating how local officials’ career incentives influence policy decisions.