Originally intended for the Department of Housing and Urban Development, this literature survey can also serve the interests of public officials, participants in demonstration programs, and academics involved in delivering assistance to local officials. Reviewed is the literature relating to innovation, diffusion, organizational behavior, and public administration. The results of the literature summary, together with accompanying bibliographies, are presented in the narrative and appendixes. The background section briefly describes the approach and methodology used in carrying out the search and presents a summary of terminology, processes, and typologies as an introduction to the work. Chapters 3, 4, and 5 present the major substantive findings. Chapter 3 identifies and provides detailed discussion of four major categories of factors--individual, organizational, environmental, and innovation-specific--that influence organizational innovations and diffusion. Chapter 4 focuses on those factors that influence innovation in public bureaucracies. Chapter 5 summarizes major shortcomings found in the literature. (Author/IRT)