This paper explores the intersection between institutional economics and development practice. Intent on shaping development policy and overcoming implementation dilemmas, development decision makers need new and useful ideas about institutions at project, country, and global levels. The paper presents development projects as instruments of policy reform and institutional change. It proposes a systematic framework for institutional design and deals with the pattern of different kinds of institutional goods in a country context. Last, the paper analyzes the global factors underlying the growing demand for institutional reform and describes why such reform is achieved more readily through multilateral cooperation.