This chapter concentrates on one of the most disputed areas of development studies, the role of the state in the process of economic transformation. It begins by framing the discussion within the context of major socioeconomic realignments of the 1980s which set the stage for a renewed debate over the role of the state. It concludes with recent research which attempts to reaffirm the potential of the state as an agent of economic growth, a view widely held by the early developmentalists as well as the heterodox thinkers discussed in the previous two chapters.