The selected six papers focused on different aspects of development policy. The aim is to put together diverse development issues and their implications in different segments of an economy, which are critical issues for low- and middle-income countries in a globalised financial system that places high risk for greater capital mobility into these countries. This special issue focuses on different structural aspects that can give rise to varying degrees of country-specific risks. While the first two papers investigate challenges facing development or improvement in standard of living, the next two papers focus on labour market reform and trade liberalisation in influencing relative prices in those sectors, respectively, with the remaining two papers looking at the performance of two service sectors (electronics and banking) in the aftermath of liberalisation in India and the way forward in these sectors. Overall these selected papers contribute to our understanding of the effects of domestic policy challenges and their effect on development in low and middle-income developing countries.