Models of policy diffusion have become commonplace in the policy literature. Recent research has identified five (5) five mechanisms of diffusion: learning, economic competition, imitation, coercion, and most recently, social contagion. Empirical evidence provides some support for each mechanism of diffusion. Despite the multidimensional aspects of diffusion and their empirical support, most studies have failed to investigate the institutional structures of policy diffusion. In this panel each of the four authors will discuss how institutional mechanisms alter policy adoption and policy outcomes. The four authors examine the social construction of target groups, the state constitutional limitations on policy adoption, barriers that intergovernmental relations play in policy adoption and diffusion, and the diffusion of interstate compacts. The strength of this panel is the high quality theoretical work of scholars who are well-published in the field and the focus on empirical investigation of the phenomena.