Institutional change in regional economies is affected by multiscalar developments such as alignment with the EU and its markets. In countries in the EU’s Eastern and Southern neighborhood, processes of alignment and mutual market liberalization shape the supranational conditions for regional development but do so in variegated ways. Policy alignment consists of changes in the supranational institutional context that are translated into diverse changes in the regional institutional context. Building on literature on institutional entrepreneurship, cultural political economy, and actor-network theory, the paper argues that EU alignment opens a transnational window of institutional opportunity for agents to shape regional development through the translation of institutional change both between different spatial scales and between different components of institutional contexts. In this contested process, institutional entrepreneurs draw on imaginaries, narratives, and visions, and actively shape them. The empirical case of tourism in Israel's Southern Negev illustrates the impact of the country's integration into the EU’s external aviation policy on the tourism sector as well as the strategies of institutional entrepreneurs to use this transnational window of institutional opportunity to promote diverse patterns of institutional change based on multiple imaginaries.