This paper reviews the empirical literature on the effects of institutionalization on young children’s development from the perspective of global child welfare practice and policy. It considers the characteristics of typical institutions, how to assess the quality of care in institutions, the level of physical and behavioral/mental development of infants and young children while residing in institutions, the crucial role of caregiver–child interactions in children’s development, the potential of children to developmentally improve when institutional caregiver–child interactions improve or children are transferred to families, and the influence of the quality of care on children’s development regardless of context. Several controversies are considered in a balanced fashion and from the standpoint of the nature of the evidence, such as care as typically practiced versus more ideal care, intercountry adoptions, improving institutions, and volunteers in institutions. Implications for practice and policy are identified throughout, especially factors that characterize successful large-scale attempts to transition from institutionalization to a system of family alternatives.
