The shift in the interest of international agencies and of the World Bank, in particular in the 1990s towards issues of governance, is on the face of it long overdue. It appears that, after a long hiatus, mainstream economists are returning to the political economy of growth in general and to the problems of policy implementation in particular. Evidently, the new consensus is to be welcomed as a huge improvement over the market theology of the 1980s. The state is now recognised as important, as are investments, and how effectively states and other non-state institutions, like financial institutions, work to create conditions conducive for investment must clearly have a lot to do with explaining growth and in directing policy attention when growth is poor. On the other hand, the new consensus is resistant to taking into account the role of political power in general, and in particular in explaining the patterns of corruption in different countries and the effects of this corruption. This is not because the importance of political corruption is not recognised. Economic theorists working on corruption, as well as the Bank and the IMF, have explicitly recognised the importance of political corruption. Rather, the problem is that political corruption is difficult to model and the policy implications of identifying this problem is that politics has to be targeted, a prospect that is not attractive to international institutions unless the political reform can be presented in terms familiar to their Western funding constituency.