Experimental Spaces and Institutional Innovation: The Interplay of Distancing Work and Anchoring Work

This paper examines processes involved in designing experimental spaces for institutional innovation. Through a qualitative, process-oriented analysis of an experimental space related to the institutional innovation of carbon markets in Europe, we show how key actors in the European electricity sector deliberately designed an experimental space and engaged a range of stakeholders in experimenting incognito with a carbon market model. A mirror image of their prototype later appeared as European policy. Our findings show that the key actors engaged in two forms of institutional work, distancing work and anchoring work, to design the experimental space. Distancing work consists in designing rules and procedures that alleviate institutional pressure on participants, encouraging them to engage creatively in developing alternative prototypes. Anchoring work consists in designing rules and procedures that connect the prototype to the organizational field, hence increasing the likelihood of institutional innovation. We develop a process model of institutional institutionalization that, through temporal interactions between distancing work and anchoring work, enables the generation and legitimacy of alternative prototypes.