This chapter builds upon recent advances in the study of policy dynamics to examine the decision-making processes associated with the diffusion of policy innovations. It demonstrates that patterns of policy diffusion display punctuated dynamics inconsistent with a single process of incremental learning, but instead indicate multiple underlying decision-making processes. This is perhaps shown most forcefully by the abrupt and rapid spread of policy innovations across states in American history, a diffusion that cannot be explained through the process of incremental learning but must rather reflect decision making under extreme pressures for change placed on state governments.

A more nuanced theoretical understanding of the process of public-policy diffusion can be gained by integrating research on innovation diffusion with studies of agenda setting in political decision making. The agenda-setting perspective demonstrates that government attention is unequally allocated in political decision making. State decision makers prioritize and respond differently to competing streams of information based on perceived issue importance, salience, and urgency. The diffusion of public policies often conforms neatly to the process of policy identification, evaluation, and emulation central to most modern research on innovation diffusion. However, a significant subset of policy innovations attracts immediate and widespread attention. These policies encourage immediate political responses, leading to the outbreak of nearly identical policy innovations across states. If diffusion dynamics are truly driven by two or more paths of organizational information processing, then the existing incremental decision-making model is insufficient to explain the processes of diffusion dynamics.