A Sociological Institutionalist Approach to the Study of Innovation in Governance Capacity Sara Gonza ´lez and Patsy Healey [Paper first received, June 2004; in final form, June 2005] Summary. This paper draws on institutionalist approaches as developed in the fields of policy analysis and planning, to develop a methodological approach for assessing how the governance capacity for socially innovative action might emerge. After introducing the problematic of the search for governance relations which have the capacity for social innovation, the second and third parts of the paper summarise the emerging social-constructivist ‘institutionalist’ approach in policy analysis and planning. The fourth part draws on a three-level analytical model of governance dynamics to explore the dynamics and dialectics of urban governance transformation processes, illustrated with a case study of a socially innovative area-based initiative. The final section considers the power dynamics of episodes of socially innovative governance arising from within civil society and their potential to transform wider governance processes and cultures. 1. Governance and Social Innovation In the context of this Special Topic, this paper provides a methodological strategy with which to analyse the qualities of govern- ance capacity to promote socially innovative initiatives. It draws on sociological institu- tionalist analysis to develop a three-level con- ception of governance dynamics with which three questions are addressed. First, how do we identify and assess that urban governance is changing and that new emerging forms might have the potential to transform sig- nificantly existing ways of doing things? Secondly, once we have identified that sig- nificant transformation of institutional dyna- mics is happening, how do we evaluate whether the emerging forms allow for social innovation? Thirdly, what kinds of power dynamics are mobilised in initiatives which promote socially innovative local develop- ment and what resistances are encountered by such initiatives in their struggles to expand and institutionalise? By social innovation, we mean changes in governance institutions and agency that intend to or have the effect of contributing to improving quality-of-life experiences in a socially inclusive and socially just way. We are interested in particular in transformations in urban governance which expand the under- standing of the daily-life conditions of people who suffer from poverty and marginalisation in an urban context and which give voice and power to those who can both express this understanding and raise issues neglected in established governance discourses and practices. Urban Studies, Vol. 42, No. 11, 2055–2069, October 2005 Sara Gonza ´lez is in the Institute for Policy and Practice (IPP) and in the Global Urban Research Unit (GURU), University of New- castle, Newcastle, NE1 7RU, UK. Fax: 0191 222 6008. E-mail: Sara.Gonzalez@ncl.ac.uk. Patsy Healey is in the Global Urban Research Unit (GURU), University of Newcastle, Newcastle, NE1 7RU, UK. Fax: 0191 222 6008. E-mail: Patsy.Healey@ncl.ac.uk. The authors wish to thank Geoff Vigar for his contribution to the fieldwork and their colleagues in the SINGOCOM team for their many comments on earlier drafts of this paper and to acknowledge the resultant improvements. Its deficiencies, however, remain the authors’ own! 0042-0980 Print=1360-063X Online=05=112055 – 15 # 2005 The Editors of Urban Studies DOI: 10.1080=00420980500279778