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How can a country become more developed? The introduction of the new growth theory sees the role of government in the growth process in a new light that endogenous factors, including government, can influence economic growth. While enlargement of government could result in a boost in economic growth rate through establishing protections of property rights, standardization, ruling law, decreasing transaction costs and creating an environment conducive to investment and providing infrastructures and public goods especially healthcare and education; On the other hand, it leads to deceleration of economic growth through disincentive effects of taxation and borrowing and increased inefficiencies. Especially when public sector gradually trespasses to domains where private sector could provide services at higher quality and lower costs. Furthermore, although they are closely related, the variables that affect economic growth could affect development differently. Thus, the final impact of government size on development depends on the weight of negative and positive effects