ABSTRACT
Although economists increasingly agree that the state plays an important role as facilitator of economic development, there is still near-consensus that it should not play a direct role in the production of private goods and services. Another received wisdom is that oil-rich states suffer from particularly bloated and inefficient public sectors. State-owned enterprises (SOEs) outside of the infrastructure and utility sectors are generally seen as a bad, outmoded, and fiscally deleterious idea-especially in rentier states, which derive all or a substantial portion of their income from natural resources. Several of these states have had catastrophic experiences with state-led industrialization.
