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This article focuses on the concept of institutional racism as deployed in the Macpherson Report into police handling of the murder of Steven Lawrence. After some remarks on the methodological difficulty of grounding the concept in an investigation of a single incident of failed murder inquiry, the focus shifts to Macpherson's general understanding of the relations between police and black communities. Macpherson deploys a cultural explanation of institutional racism which is seen as grounded in the lack of contract between white police officers and black communities outside of the law enforcement relationship. This deflects from an understanding of the reproduction of institutional racism through the normal practices of operational policing, in particular ‘top and search’.