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This article focuses on the role of government in economic development. Development economists recognized the role of government in providing social overhead capital or infrastructure to facilitate economic development. But most analysis focused on a second role: government should undertake activities that would compensate for market failures. Market failures were thought to result from structural rigidities which were defined as a lack of responsiveness to price signals. It was therefore concluded that governments should take a leading role in the allocation of investment, control the commanding heights of the economy, and otherwise intervene to compensate for market failures.