This collection reviews national policies that critically influence economic performance in developing countries. It describes principles that shape good economic policy and illustrates them with case studies. In an overview that draws together insights from the essays, the volume editor explains why poor countries need sound government policies to offset unfavorable conditions, including scant natural resources, adverse problems that occur with monetary and exchange rate policies and financial sector reform. The basic rules for monetary policy in an open economy are developed along with the different ways in which financial reform and financial repression affect an economy. Practical ways to deal with foreign exchange markets are described. They include such arrangements as multiple exchange rates for commercial transactions and dual rates that separate commercial and financial transactions. Also examined are the ways in which trade liberalization and trade restrictions impede economic development. Advice is given on developing a uniform structure that balances the administration of taxes with the efficiency of a tax structure. The book examines the relationship between budget deficits and money creation and suggests management strategies for developing sound economic policy that include advice on inflation control, international trade, import restrictions, income tax rates, and price and wage controls. Published for the World Bank by Oxford University Press.