When markets fail, there is room for government to intervene in the market and correct market failures, thereby promoting economic development. The government, however, often “fails” and exacerbates market failures or generates new market failures where markets used to work. In this chapter, I analyze what the government in developing countries should not do, including the implementation of conventional land reform, support for modern large-scale agriculture, adoption of social forestry, promotion of heavy industries, support for modern large-scale firms, and setting a high minimum wage. I demonstrate that all these policies deteriorate the prospects for the development of poor economies.