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This paper shows evidence of strong heterogeneity in the relationship between government size and growth, depending on the quality of public sector institutions. Focusing on a wide sample of developed and developing countries over the period 1981-2005, we find that government size reduces growth when bureaucracy quality is low, whereas no significant effect is observed for sufficiently high levels of bureaucracy quality. The results hold both in cross-section and panel data analyses and are robust to a large number of robustness checks. These findings have important implications for assessing the role of government size in economic growth. [ABSTRACT FROM AUTHOR]

Disappointment over the contributions of Third World state apparatuses to industrial transformation and the increasing intellectual dominance of "neoutiliarian" paradigms in the social science has made if fashionable to castigate the Third World state as "predatory "and "rent seeking." This paper argues for a more differentiated view, one that connects differences in performance to differences in state structure. The "incoherent absolutist dominationt' of the "klepto-patrimonial" Zairian state are contrasted to the "embedded autonomy" of the East Asian developmental state, Then the internal structure and external ties of an intermediate state - Brazil - are analyzed in relation to both polar types. The comparative evidence suggests that the efficacy of the developmental state depends on a meritocratic bureaucracy with a strong sense of corporate identity and a dense set of Institutionalized links to private elites. [ABSTRACT FROM AUTHOR]