Over the past 75 years, the world has witnessed a series of successive international development theories that have structured donor and government policy prescriptions. As each theory has failed to swiftly eradicate global poverty, criticisms have mounted, and the paradigm has shifted. Assessing the role for the state and for the market in fostering positive socioeconomic change has been central to the evolution of theories of development. This chapter first traces the history of these paradigmatic changes, beginning from a period of state-centered, to market-centered, and then to governance-focused development theory. Second, the chapter highlights the relatively recent focus on “good governance” institutions in creating enabling conditions for markets, as well as the importance given to “collaborative governance” in the 2000s. In so doing, the chapter notes the ways in which the field of international development uses the term “governance” in common and particular ways.