The amino acid arginine is frequently used as a solution additive to stabilize proteins against aggregation, especially in the process of protein refolding. Despite arginine's prevalence, the mechanism by which it stabilizes proteins is not presently understood. We propose that arginine deters aggregation by slowing protein-protein association reactions, with only a small concomitant effect on protein folding. The associated rate effect was observed experimentally in association of globular proteins (insulin and a monoclonal anti-insulin) and in refolding of carbonic anhydrase. We suggest that this effect arises because arginine is preferentially excluded from protein-protein encounter complexes but not from dissociated protein molecules. Such an effect is predicted by our gap effect theory [Baynes and Trout (2004) Biophys. J. 87, 1631] for "neutral crowder" additives such as arginine which are significantly larger than water but have only a small effect on the free energies of isolated protein molecules. The effect of arginine on refolding of carbonic anhydrase was also shown to be consistent with this hypothesis.