This chapter explores the drivers behind the continued, and in some parts of the world, growing, institutionalization of children. It presents evidence related to the serious harm caused by institutionalization and the better alternatives that exist and provides developing evidence of a range of economic drivers behind the proliferation of 'orphanages' globally. The chapter summarizes an approach to transforming children's services and reducing reliance on institutional care that has been tried and tested in many countries. The proliferation of orphanages and the resistance to closing orphanages in many countries result primarily from a range of economic drivers that ultimately result in the commodification of children. The UN World Report on Violence against Children revealed corporal punishment and abusive 'treatments', including physical restraint and electric shocks, used on children in institutions. The chapter shows an increased risk for children from residential care backgrounds being involved in trafficking.