As capitalism defeated socialism in Eastern Europe, the market displaced the state in the developing world. In Beyond the Miracle of the Market, first published in 2005, Bates focuses on Kenya, a country that continued to grow while others declined in Africa, and mounts a prescient critique of the neo-classical turn in development economics. Attributing Kenya's exceptionalism to its economic institutions, this book pioneers the use of 'new institutionalism' in the field of development. In doing so, however, the author accuses the approach of being apolitical. Institutions introduce power into economic life. To account for their impact, economic analysis must therefore be complemented by political analysis; micro-economics must be imbedded in political science. In making this argument, Bates relates Kenya's subsequent economic decline to the change from the Kenyatta to the Moi regime and the subsequent use of the power of economic institutions to redistribute rather than to create wealth.

Robert H. Bates undertook graduate studies of anthropology at Manchester University and economics at Stanford. Joining the Division of Humanities and Social Sciences at the California Institute of Technology, he rose to full professor before leaving for the Luce Professorship at Duke in the early 1980s. He joined the faculty at Harvard in 1993. Bates has conducted field work in Zambia, Kenya, Ghana and the Sudan and traveled throughout much of West Africa as well. He has also conducted fieldwork in Colombia and Brazil, where he conducted research on the politics and economics of the international coffee industry. A consultant for the World Bank and USAID, Bates is also a member of the State Failure Task Force. He serves as a resource person for the Africa Economic Research Consortium and has for several years held a visiting professorship on the faculty of the economics department at Toulouse University.