This is the Cato Daily Podcast for Monday, April 29, 2004.

I'm Caleb Brown.

The state's capacity to defend your rights, to make your property more secure, can foster

economic growth and human flourishing.

But advancing the interests of people currently in the informal economy remains a challenge and of course there are downsides to a larger state capacity.

Eduar Escalante is a professor of economics at Angelo State University.

We discussed the case of Peru last month in Dallas.

So at first blush when you hear the phrase state capacity, there are a lot of liberals who would

say, well I don't want that. Without knowing anything

about it then the response might be well the states cast leader to do what? That's

right I think there was a big debate on what is what the government should do But once the government choose to do, how does it achieve it?

And that is relevant because you find that large sectors of the world population live outside at the margin of this government

and living at the margin of the government they have been able to create their agreements to enforce them, but still in a very precarious way.

There is a collision there between two systems, the formal and informal system.

And that has generated also contradictions and conflict

in many of these countries.

So enforcing the law is what people assume for state capacity when they think that the state

capacity is beneficial to create growth. Economic growth and prosperity comes

with the capacity of the government to enforce

in the law and instructive resources for it.

Of course, if you assume that the state capacity has another aspect, that is the capacity of the government to go ahead with war or

probably build large infrastructure projects that nobody cares and they are not beneficial.

...