The powerful forces of market-based globalization have been the central concern in the consideration of the development policies of individual developing countries for several years and will increase their salience in the coming period. Water policy should not be an exception. Market-based globalization having diametrically opposite forces, namely integration into the world economy and marginalization from it, the developing world has been divided into three categories, each requiring a different set of policy responses, including water policies. They are: (1) those countries that are being integrated into the world economy; (2) those that are marginalized from it; and (3) those where both forces (integration and marginalization) are at work simultaneously. Relevant policies, such as full cost pricing, environmental considerations, water productivity in agriculture, conflict in water allocation and others, need to be elaborated along the lines of these three categories of countries.