This paper does not engage in an examination of competing theoretical trajectories of development as these debates are available elsewhere. Rather, it looks at the possibility that even if the theory on which good governance reforms are based is plausible, it may not be possible to achieve significant improvements in market-enhancing governance in poor countries simply because these capabilities require significant fiscal and productive capacities to implement. Our policy conclusion is that a shift is required in the reform focus from good governance to growth-enhancing governance.