Innovation from the margins: policy entrepreneurship and public sector innovation in centralized contexts

Public-sector innovation (PSI) and policy entrepreneurship (PE) are both deeply embedded in national political contexts, but their respective literatures have remained largely separate. This study bridges them by examining how innovators navigate institutional constraints in centralized governance systems, using Israel as a revealing case. Through a systematic review of 51 academic articles that examined innovation and entrepreneurship in Israel’s public sector – a country known for private-sector innovation but constrained by centralized governance and institutional rigidity. Findings reveal that innovation often emerges from peripheral actors such as NGOs, citizens, and junior bureaucrats who navigate these constraints using entrepreneurial strategies.