Our images of orphanages come from Dickens, Annie, and horrendous tales from Romania, where care for kids is less important than running a business. But recent research discussed in Scientific American says these are not the usual type in third-world countries.
Researchers looked at 3000 6 to 12 year olds kids in either foster care or orphanages in Tanzania, Kenya, Ethiopia, India, and Cambodia and found that "Health, emotional and cognitive functioning, and physical growth were no worse for institution-living than community-living OAC (orphan kids), and generally better than for community-living OAC cared for by persons other than a biological parent."
That is, kids in orphanages did as well as foster kids in cognitive measures and mostly better than foster kids in things like general health and specific indicators of health, such as likelihood of having had a cough or diarrhea in the last 2 weeks, or likelihood of being sick on the day of the interview. Height, weight, and BMI were the same for each.
The difference between these orphanages and the ones in Romania seems to be that the adults in these care about the kids. Many of them live in the orphanage, many without a salary. And they are mostly small, averaging 25 to 30 kids each.
On reflection, it should not be a surprise either that groups of 25 Kenyan orphans living with people who care about them should do better than Romanian kids in industrial nurseries, or that orphanages in third-world countries would be staffed by such people. Good for them. They're doing God's work.