What role does the state play in economic development? This thesis seeks to investigate the relationship between a strong state and economic development. To define the concept of a strong state I focus on the relationship between the scope of state functions and the efficiency of which these functions are implemented. The concept of a strong state is in this thesis defined as the efficiency of the state functions. By using a database constructed by three economists; David Kaufman, Aart Kraay and Massimo Mastruzzi as a measurement of a strong state I test the relationship with economic development empirically. The empirical data covers all of the countries in the world and GDP per capita is used as the dependent variable of economic development. The test is carried out by a linear regression analysis. The analysis shows not only that there is a significant positive relation between state and economic development but furthermore that the relation between the variables is exponential rather than linear. The results show that a strong state has an accelerating return on GDP per capita. This means that an already efficient state can enjoy greater returns in economic development than a not so efficient state
