An often-stated advantage of federalist over unitarian states is that decentralized states serve as policy laboratories in which new policies are tested and--if successful--spread to the entire country. It implicitly assumes that federalism promotes policy learning. However, how do policies diffuse? Through which channels are policy relevant information disseminated? To address these questions, empirically, this book analyzes how interdependencies between poli-cy-makers in the federal state of Switzerland influence health policy choices. More precisely, it focuses on governmental subsidies for health insurance premiums, the main social correcti-ve to the otherwise strongly liberal system. Adapting a diffusion framework and using an in-novative method, this research provides evidence that policy-makers learn from the experien-ces of others. Indeed, successful policies do not just spread--rather, they need to be channe-led. By facilitating the exchange among policy-makers, institutionalized intergovernmental cooperation is identified as one possible channel for policy diffusion and policy learning. Such institutions are therefore crucial for the states-as-laboratories metaphor to work.