How Are Innovations Adopted? Exploring How Organizational and Institutional Contexts of Public Organizations Affect Public Sector Innovation

This paper analyzes innovation in three Colombian organizations at different government levels. Data include 24 interviews and seven focus groups conducted in 2023. The analysis reveals how organizational elements such as capacity, decision-making flow, the hierarchy of actors, and forms of leadership affect the desired flow of innovative ideas. At the institutional level, the need for legitimacy in governance contexts and values, such as transparency and democratization of information, strongly motivate innovation generation. The analysis shows that in Global South contexts, PSI functions simultaneously as performance improvement and legitimacy restoration, operating under resource scarcity and institutional fragility. Organizations bypass formal trialing phases due to capacity constraints, implementing an “adjust-while-doing” approach requiring strong monitoring mechanisms. The study demonstrates that innovation in capacity-constrained environments serves both compensatory and strategic purposes, extending organizational and institutional theories into decentralized, developing country contexts where innovation outcomes vary significantly across different organizational capacity levels.