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‘Community’generally has a bad name in economics and allied social sciences. Since Mancur Olson, we associate groups–everything ranging from informal, traditional communities to organized groups–with a range of growth-limiting vices, including rent-seeking and blocking of change (Olson 1965). A second negative view of groups comes from several sources, including public choice theory, the economics of information, and contract theory. It provides a picture of the ways that collective life frustrates preference attainment: it is impossible to aggregate voices perfectly; leadership inevitably runs into principal–agent problems; and groups create insider–outsider dynamics, which in turn impede the factor mobility held to be the key to long-term economic growth. The corollary of this negative,‘blocking’view of communities, is that much of economics and political economy is favourable to ‘institutions’. This generally refers to broad rules of the game which, when appropriate, provide the order and stability in which markets can function. This facilitates the ongoing adjustments to the economy that make development possible. And, most importantly, institutions limit the damage that groups, or the ‘players of the game’can do through things such as property rights, the rule of law, constraints on the executive, individual rights, and limits on monopoly power. Good institutions protect markets and individuals from the ravages of community, though there is immense debate about precisely which such rules/institutions do this optimally. 2