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The market and the state have to play valuable complementary roles in economic
development. The government or state is expected to correct and facilitate the
market. If the government fails, people cannot lead fine lives. At present, South
Asian people have many socio-economic and political problems including poverty.
Some of these problems are outcomes of poor performance of the state and are
correlated with poverty. Specifically speaking, in South Asia, 32 per cent of the
population lives on less than $ 1.25 a day. Some countries do not concentrate
on development. Instead, they are entangled in civil struggles, infringement of
human rights and failures of government, such as, corruption. Therefore, this
study examines whether the South Asian countries have played the proper role
of the state as accepted by economists. This objective is achieved by analyzing selected performance measures of the state, such as, corruption, rule of
law, modernization of roads, education, health and governance, over time and
comparing their changing patterns between economies. The study is based on
secondary data, and in addition to qualitative analysis, many variables are econometrically analyzed. It concludes that in South Asian states poverty is decreasing
but states and governments of these countries have to do much more to promote growth and. alleviate poverty.
