By local development, we understand a multifaceted phenomenon which not only involves economic growth, but also engages relationships between economic, social, cultural, political and environmental dynamics, their logics and their various forms. By governance capacity, we mean the ability of the institutional relations in a social milieu to operate as a collective actor. In the context of this special topic, this paper provides a methodological strategy with which analysing the qualities of governance capacity to promote socially innovative local development. It summarises that the significant transformation of institutional dynamics is happening and evaluates whether the emerging forms allow for socially innovative development.