Abstract
This study shows how stakeholder interactions, and formal and informal rules drive sustainability innovation through collective action. We use the Institutional Analysis and Development framework to assess the capacity of tourism stakeholders to engage in sustainability innovations. Drawing on a multistage qualitative data collection process, including interviews and workshops, we comparatively analyze an existing sustainability innovation and a stakeholder-led, co-created innovation, testing ten design principles for management systems rooted in collective action and self-governance theories. We find that (i) incentives to free-ride accumulate over time, (ii) legitimacy enables institutional change in destinations, (iii) shared responsibility helps unveil interactions between stakeholders in managing tourism sustainability, and (iv) self-governing rules can help engage opposing stakeholders more democratically in sustainable destination management.
•Sustainability innovations can promote institutional change in destinations.•Critical institutions influence stakeholders' decisions to collaborate.•Formal and informal rules shape stakeholder engagement in sustainability innovation.•Enabling self-governance in sustainable tourism innovation drives collective action.•Interplay of formal and informal rules governs sustainable tourism innovation.