This paper argues that the impact of international programmes intended to improve the effectiveness of higher education institutions in transitional states is related to the extent to which the programmes are successful, through their various projects, in creating social capital within the institutions concerned. Based on case studies of similar institutions in Poland and Romania, the paper finds that projects developed within the institution had a more lasting impact on organisational change, even when the project was of an academic nature, than did externally directed projects which were actually focused on achieving institutional change. Social capital theory offers an explanation of this difference, and suggests what the mechanisms at work may be.