Rethinking Policy Diffusion: The Interstate Spread of ‘‘Finance Innovations’’ T. Austin Lacy • David A. Tandberg Received: 1 April 2013 Ó Springer Science+Business Media New York 2014 Abstract Recently a number of studies have focused on states’ adoptions of postsec- ondary-specific policies. Cutting across much of this research is the presence and influence of interstate diffusion of policy adoptions, a phenomenon for which support is scant. This paper seeks to address this through broadening the categorization of policies beyond the discrete form traditionally used to one that encompasses a larger conception of ‘‘finance policy.’’ Our sample uses 131 finance innovations for 47 states over a 29 year period, finding that upon broadening our definition, we can detect the process of diffusion. However, the findings are striking, showing that while states do learn from one another, the process is dynamic and shifts across time. Keywords State policy adoption  Postsecondary finance  Diffusion  Event history analysis Introduction Historically, state policymakers have attempted to keep tuition low through direct appropriations to public colleges and universities. Since the nineteenth century, the states were the predominant funders of public colleges and universities, a commitment accel- erated by the federal land grant acts, the development of teachers colleges, community colleges, the expansion of public research universities and further federal action such as the GI Bill (Johnson 1987). However, as early as the 1940s, policymakers became concerned An earlier version of this paper was presented at the annual meeting of the Association for the Study of Higher Education, Charlotte, NC. We thank Jim Hearn and Michael McLendon for their comments on an early draft and continued support. All errors contained are our own. T. A. Lacy (&) The University of North Carolina System Office, Chapel Hill, NC, USA e-mail: talacy@northcarolina.edu D. A. Tandberg Florida State University, Tallahassee, FL, USA 123 Res High Educ DOI 10.1007/s11162-014-9330-2