DeMuth is said to have read AEI publications as an undergraduate and used them as a lecturer at Harvard. He was appointed president of AEI at a time of crisis for the institute, after the turbulent presidency of William J. Baroody Jr. AEI was a respected institution, but Baroody had been careful to keep AEI in the political mainstream. DeMuth returned the institute to its conservative and small-government principles, allowing it to compete with The Heritage Foundation and Cato Institute, and bringing in more money from conservative foundations. DeMuth restored AEI's financial fortunes, eliminating $9 million in debt and generating an asset balance of over $75 million. He also more than tripled AEI's budget during his presidency.