Northern Ireland has been characterised as having an excessively large public sector. This characterisation has led some to explain poor regional economic performance in terms of ‘crowding out’. This diagnosis has been used to justify a policy of ‘rebalancing’ and the region copying its southern neighbour’s lower rate of corporation tax. However, Rodrik’s comparative institutional analysis indicates that - as in the Nordics – a large public sector was the result of building a successful tradable private sector. In terms of the possible ‘economic dividend’ from devolution it suggests that a Hayekian insight is better: no ‘silver bullets’ exist.