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Over the past 25 years, India's economy grew at an average real rate of close to 6 percent, with growth rates in recent years accelerating to 9 percent. Yet by 2005-06, the general government debt-to-GDP ratio was 34 percentage points higher than in the 1980s. The authors examine the links between public finances and growth in the post-1991 period. They argue that the main factor in the deterioration of government debt dynamics after the mid-1990s was a reform-induced loss in trade, customs, and financial repression taxes. Over time, these very factors plus lower entry barriers have contributed to stronger microfoundations for growth by increasing competition and hardening budget constraints for firms and financial sector institutions. The authors suggest that the impressive growth acceleration of the past few years, which is now lowering government indebtedness, can be attributed to the lagged effects of these factors, which have taken time to attain a critical mass in view of India's gradual reforms. Similarly, the worsening of public finances during the late 1990s can be attributed to the cumulative effects of tax losses, the negative growth effects of cuts in capital expenditure that were made to offset the tax losses, and a pullback in private investment (hence, growth and taxes), a situation which is now turning around. Insufficient capital expenditures have contributed to the infrastructure gap, which is seen as a constraint especially for rapid growth in manufacturing. The authors discuss ongoing reforms in revenue mobilization and fiscal adjustment at the state level, which if successfully implemented, will result in a better alignment of public finances with growth by generating further fiscal space for infrastructure and other development spending.

Access to Finance --- Banks and Banking Reform --- Budget constraints --- Debt Markets --- Economic Theory and Research --- Emerging Markets --- Entry barriers --- Expenditure --- Expenditures --- Finance and Financial Sector Development --- Government debt --- Government indebtedness --- Indebtedness --- Macroeconomics and Economic Growth --- Private investment --- Private Sector Development --- Public finances --- Tax

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Why do prices in Spain's regions fail to converge? The prime suspects for this puzzling result are differences in regional barriers to entry in retail distribution. This paper develops a Cournot-Nash model of imperfect competition to illustrate the effect of barriers on prices. A unique data set-derived from an extensive analysis of competition policies in Spain- provides evidence that barriers to entry increase regional prices. The evidence also suggests that, consistent with the model's predictions, barriers to entry raise prices up to a point, and thus indicate that barriers have a threshold effect on prices.

Barriers to entry (Industrial organization) -- Spain. --- Competition -- Spain. --- Electronic books. -- local. --- Prices -- Spain -- Regional disparities. --- Retail trade -- Spain. --- Management --- Business & Economics --- Industrial Management --- Barriers to entry (Industrial organization) --- Competition --- Prices --- Retail trade --- Regional disparities. --- Retail industry --- Retailing --- Commercial products --- Commodity prices --- Justum pretium --- Price theory --- Competition (Economics) --- Competitiveness (Economics) --- Economic competition --- Entry, Barriers to (Industrial organization) --- Economic aspects --- Commerce --- Marketing --- Shopping centers --- Wholesale trade --- Consumption (Economics) --- Cost --- Costs, Industrial --- Money --- Cost and standard of living --- Supply and demand --- Value --- Wages --- Willingness to pay --- Conglomerate corporations --- Covenants not to compete --- Industrial concentration --- Monopolies --- Open price system --- Trusts, Industrial --- Industrial organization (Economic theory) --- Restraint of trade --- Trade regulation --- Diversification in industry --- Econometrics --- Finance: General --- Inflation --- Macroeconomics --- 'Panel Data Models --- Spatio-temporal Models' --- Market Structure and Pricing: Oligopoly and Other Forms of Market Imperfection --- Price Level --- Deflation --- General Financial Markets: General (includes Measurement and Data) --- Truncated and Censored Models --- Switching Regression Models --- Threshold Regression Models --- Finance --- Econometrics & economic statistics --- Threshold analysis --- Consumer price indexes --- Financial markets --- Econometric analysis --- Price indexes --- Spain