His leadership of the think tank saw AEI enjoy new levels of political influence but was cut short by financial problems.

"Under Baroody’s direction, the office incorporated outreach efforts with consumers and women that had been located elsewhere in the White House, and the overall staff grew to approximately thirty.

Many AEI scholars left the institute for government service, including Jeane Kirkpatrick, Robert Bork, and James C. Miller III.

Insiders lamented a pursuit of prestige, evidenced by Baroody's hiring of Ford as a distinguished fellow, at the expense of more ideological conservative scholars.

[7] With AEI on the verge of bankruptcy in June 1986, Baroody resigned and was replaced on an interim basis by the respected economist Paul McCracken.