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This paper compares and contrasts the policy reform experiences of Poland and Turkey en route to high income. For both countries, globalization has presented unprecedented opportunities to catch up, unleased by integration into European and global markets and the establishment of macroeconomic discipline. These opportunities were reinforced by the creation of economic institutions to strengthen competition and support private entrepreneurship, catalyzed by the convergence process with the European Union. Both Poland and Turkey have shown resilience following the 2008 global crisis, but continued success will require renewed structural reform measures. Dealing with the challenging of aging while at the same time finding a way to sustain productivity growth through greater domestic innovation is shaping Poland's policy agenda. Turkey's structural and demographic potential as well as its strategic location between the markets of Europe and Asia offers attractive value proposition to investors, which could be further enhanced with improvements in business regulations and economic governance.

Indias states have significant developmental expenditure responsibilities. While the fiscal crisis which engulfed Indias states in the late nineties led to higher deficits and debt levels, it was also associated with a rapid increase in expenditure levels, and it might be thought that this would have increased the development effectiveness of the state governments. However, a closer look at the data reveals that this is not the case. The main positive fiscal development in the post 1996/97 period is a pick up in real growth in government capital expenditure. In other respects, the fiscal crisis weakened the developmental and poverty impact of state governments especially in the poor states. Real growth of expenditure in health and education slowed, in some cases halted, and the efficiency of government expenditure fell as liquidity constraints tightened and non-salary expenditures were crowded out.

Indias states have significant developmental expenditure responsibilities. While the fiscal crisis which engulfed Indias states in the late nineties led to higher deficits and debt levels, it was also associated with a rapid increase in expenditure levels, and it might be thought that this would have increased the development effectiveness of the state governments. However, a closer look at the data reveals that this is not the case. The main positive fiscal development in the post 1996/97 period is a pick up in real growth in government capital expenditure. In other respects, the fiscal crisis weakened the developmental and poverty impact of state governments especially in the poor states. Real growth of expenditure in health and education slowed, in some cases halted, and the efficiency of government expenditure fell as liquidity constraints tightened and non-salary expenditures were crowded out.

Following two decades of relatively rapid growth, and a decade of liberalization, there is growing confidence within India, as well as internationally, about the state of the economy, and India's development potential. Nonetheless, and particularly since the late nineties, when India's states experienced a sharp fiscal deterioration, they have faced a squeeze on development spending, particularly acute in the poorer ones. In response, most state governments embarked on fiscal reforms, aimed at reducing deficits, and enabling effective interventions in priority areas. States in India play an increasingly important role in devising, and implementing policies to stimulate economic growth, and promote human development. But the performance of India's states is increasingly divergent, State deficits and debt levels rose sharply in the late nineties, and off-budget liabilities also increased rapidly. This sharp fiscal deterioration gave rise to state-level fiscal adjustment efforts, which in recent years have shown some signs of improved fiscal performance. Concerns about the level, and composition of fiscal deficits remain. The report states that a halt in reforms would endanger the states quality and quantity of productive expenditures, while debt levels would steadily build. It reviews expenditure reforms - particularly salaries, at the core of expenditure restructuring - and, pensions as a rapidly-mounting liability, which can be contained by parametric reforms, and longer-term structural reforms, while also examines subsidies, exemplifying the difficulties involved in reforming subsidy regimes. Regarding power sector reforms, commercial discipline should be a top priority. Public enterprise reforms are outlined, suggesting that while immediate fiscal gains may not be achieved, such reforms will prevent future budgetary support from keeping loss-making enterprises afloat. On examining revenue reforms, the report indicates these are essential to reduce fiscal imbalances, suggesting the elimination of tax on ...