Biodistricts as social innovation: Territorial implications in Italy

In the context of rural ecological transition, market and policy-based instruments often prove insufficient to address environmental challenges stemming from human activities. This underscores the need for broader societal transformation, including restructuring of organisational practices and governance frameworks. Social innovation emerges as a response to challenges insufficiently tackled by market mechanisms and public sector interventions. In Italy, biodistricts represent a prominent example of this process, as they foster rural revitalisation through cooperative governance that extends beyond organic production. This study investigates whether biodistricts can be regarded as a form of social innovation and assesses their socio-economic impact on local agricultural systems. A quantitative analysis of Italian biodistricts is carried out by comparing municipalities within biodistricts to neighbouring non-member municipalities through a counterfactual design. This spatially bounded approach mitigates potential endogeneity concerns by controlling for unobserved heterogeneity, thereby providing more robust evidence on the role of biodistricts in promoting sustainable and inclusive rural development. The results show that Italy's main biodistricts can indeed be interpreted as manifestations of social innovation, with the capacity to foster innovative pathways for rural development through the practice of organic farming. • Social Innovation drives ecological transition in rural areas. • Biodistricts are hubs for social innovation based on agroecology principles. • Counterfactual analysis shows the positive effect of Italian biodistricts on territory. • They foster innovation, multifunctionality, and social cohesion in agriculture. • Biodistricts offer an innovative governance approach to tackle rural challenges.