This work attempts to address dynamics of institutional change. It adopts the notion of entrepreneur that Schumpeter develops as the leader of innovation bringing in endogenous causes for economic development. We re-interpret this entrepreneurial role into the arena of institutional change, called as institutional entrepreneur, and so with managerial entrepreneur. The discussion of the entrepreneurship in this work aims to address the presently pressing challenges that China is faced with—China needs to improve innovative performance in sectors and regions of its micro-foundation, through sector-specific and region-specific policy initiatives. This makes a big difference in the policy process; now the policy-makers at middle and lower levels are to be assigned with much more active and important roles, in contrast to the conventional centralized top-down policy process. We attempt to explain how the differences might be in the roles and relationships of the top and middle policy makers, by drawing on the distinction between general/basic institutions and specific institutions, made by Nelson and his collaborators, and a scheme of middle-up-down process that Nonaka originally developed for the explanation of knowledge creation management at Japanese firms. With the concepts, we then analyze two cases--one is in SheKou Industrial Zone where was the home of much experimentation, economic and political, in the 1980s and the other in TaiZhou City where the local policy-makers initiated the experimentation on farmers’ cooperatives in recent years and that led the stipulation of the national Law of Farmers’ Cooperative (enacted in 2007). We explore interesting details of institutional entrepreneur and changes in institutions based on the two case studies.