Includes bibliographical references (p. 189-215) and index.

1. Introduction -- 2. Why are poor countries poor? -- 3. Market-supportive institutions -- 4. Can foreign aid promote development? -- 5. Can we measure institutions and institutional change? -- 6. Institutions and the reform of urban water systems -- 7. The role of scholars and scholarship in economic development -- 8. Where do we go from here?

A landmark contribution to our understanding of economic development. This significant book argues that fundamental changes in deeply rooted institutions do not happen because of outsiders' money, advice, pressures, or even physical force; which explains why foreign aid has not, and can not, improve institutions. The impetus for changing institutions must come from within a society, and the author shows how groups of local scholars contribute to institutional change and development when the political opportunity presents itself.