The purpose of this thesis is to establish what specific forces influence whether or not a democratic setback within one nation will diffuse to peripheral states. Past studies devoted to this topic have largely suggested that diffusion essentially functions like a contagious disease, where the likelihood of "infection" is primarily based upon the level of interaction between states. This thesis however proposes that the interaction of the signal generated from a democratic state's collapse and the receptiveness of neighboring nations to this signal ultimately determines when and where diffusion will occur. In order to test the validity of this thesis' claims, the level of democracy within the neighboring states of all failed democratic governments spanning the years 1842-2002 are examined during the first years following such system breakdowns within a large-N quantitative research design. Ultimately this study leads to the conclusion that the interaction of signals and receptivity play a major role in the diffusion of democratic setbacks.