SEVERAL ASSUMPTIONS ABOUT INSTITUTIONALIZATION HAVE CONTRIBUTED TO THE GROWING EMPHASIS ON NONINSTITUTIONAL ALTERNATIVES. INSTITUTIONALIZATION IS ASSERTED TO BE SOCIALLY STIGMATIZING, EMOTIONALLY AND INTELLECTUALLY DEBILITATING, AND CONTRIBUTORY TO THE LEARNING OF DEVIANT BEHAVIORS AND RECIDIVISM. FURTHER, INSTITUTIONAL CARE REMOVES THE CHILD FROM HIS COMMUNITY, MAKING REHABILITATION MORE DIFFICULT, AND IS MORE COSTLY THAN NONINSTITUTIONAL ALTERNATIVES. FURTHERING THE TREND TOWARD DEINSTITUTIONALIZATION HAS BEEN EXTENSIVE LITIGATION ON BEHALF OF CHILDREN AIMED AT ENSURING EQUAL RIGHTS, DUE PROCESS, FREEDOM FROM CRUEL AND UNUSUAL PUNISHMENTS, AND OTHER RIGHTS AND LIBERTIES. PUBLIC LAW 93-647, PARTICULARLY TITLE XX WHICH FAVORS COMMUNITY-BASED SERVICES, AND RECENT LEGISLATION IN A NUMBER OF STATES HAVE BOTH INCREASED PRESSURE ON INSTITUTIONS IN A VARIETY OF WAYS. FINALLY, THE WIDESPREAD EXISTENCE AND GROWING INFLUENCE OF CHILD ADVOCACY ORGANIZATIONS HAVE EXERTED PRESSURES AIMED AT FURTHERING DEINSTITUTIONALIZATION POLICIES. THERE ARE BASICALLY FOUR DEINSTITUTIONALIZATION OPTIONS: ABOLISHING ALL INSTITUTIONS, A GRADUAL PHASING-OUT OF INSTITUTIONS, AN ELIMINATION OF MANY BUT NOT ALL INSTITUTIONS, AND THE RESHAPING OF EXISTING INSTITUTIONAL RESOURCES FOR NEW OR ALTERED PURPOSES. A REVIEW OF RESEARCH ADDRESSING ISSUES RAISED BY PROPONENTS OF ALTERNATIVE SERVICE DELIVERY MODES INDICATES THAT THERE IS A PAUCITY OF GOOD RESEARCH INTO THE EFFECTS OF INSTITUTIONALIZATION ON CHILDREN. AS MANY BENEFICIAL EFFECTS ARE CLAIMED FOR INSTITUTIONALIZATION AS NEGATIVE ONES. FURTHER, COST COMPARISONS AMONG SERVICE DELIVERY MODES ARE ON TENUOUS GROUND BECAUSE OF THE LACK OF EQUIVALENT MEASURES AND THE DISECONOMIES OF SCALE. THERE DOES, HOWEVER, APPEAR TO BE EVIDENCE OF A STIGMATIZING EFFECT FROM INSTITUTIONALIZATION, AND NO BENEFITS APPEAR TO BE DERIVED FROM OUT-OT-STATE OR GEOGRAPHICALLY ISOLATED INSTITUTIONAL PLACEMENTS. THE MAJOR ALTERNATIVES TO INSTITUTIONALIZATION ARE FOSTER CARE, GROUP HOME CARE, COMMUNITY-BASED PROGRAMS, AND MEASURES DESIGNED TO STRENGTHEN THE FAMILY. HOWEVER, A CRITICAL ASSESSMENT OF THESE ALTERNATIVES REVEALS A NUMBER OF SERIOUS SHORTCOMINGS AND A POTENTIAL FOR EQUALLY NEGATIVE EFFECTS. IN ADDITION, SERVICE GAPS OR UNAVAILABILITY, LACK OF ACCOUNTABILITY, REDUCTION IN TREATMENT ALTERNATIVES, LACK OF SAFEGUARDS TO ENSURE PROTECTION AND CARE, AND AN EMPHASIS ON COST-EFFECTIVENESS MAKE IT POSSIBLE THAT CARE AND SERVICES OUTSIDE THE INSTITUTIONAL SETTING COULD BE MUCH WORSE THAN THOSE IN INSTITUTIONS. TO BE SUCCESSFUL, DEINSTITUTIONALIZATION PLANS AND POLICIES MUST BE BASED ON THE RIGHTS OF CHILDREN, MUST BE PUBLICLY AIRED, MUST DEMONSTRATE FEASIBILITY, AND MUST BE GRADUAL AND CAREFULLY PLANNED. (JAP)