Good UK source of inexpensive adjustable reamers is RDG tools at rdgtools.co.uk (I think). They sell sets of small and medium ones, which get you up to an inch dia. Also lots on e-bay I think. Have used mine several times for exactly this purpose - gearlever outer cover bush ( made in bronze), and also for doing small ends. I never feel great with reamer in hand because it really is a case of slowly does it, a fraction at a time. They jam if you're too ambitious, which can make a bigger mess than you started with. Don't ask me how I know! Subject to that proviso re the learning curve, and subject to never reversing the direction of rotation, even when withdrawing, the results have been perfectly OK.
Re the Q of whether they're made oversize, sort of yes. The inner dia shrinks when inserted - or they do if they're a decent fit in their housing. In theory it's presumably possible to make them exactly so that with the shrinkage they'll be perfect when installed . . . but life's not always that simple . . . wear on shafts, wear in housings etc. Hence, fitting is normally needed.
