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Foreign Aid in the Making of Economic Policy in Sri Lanka, 1977-1983

Brian Levy
Policy Sciences
Vol. 22, No. 3/4, Policymaking in Developing Countries (1989), pp. 437-461
Published by: Springer
Stable URL: http://www.jstor.org/stable/4532178
Page Count: 25
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Foreign Aid in the Making of Economic Policy in Sri Lanka, 1977-1983
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Abstract

The paper analyzes the interaction between inflows of foreign aid and the character of the economic policies pursued by the Sri Lankan government between 1977 and 1983. Aid did not support the policies of liberalization and balanced public investment that were preferred by donors. Rather it enabled the Sri Lankan government to push forward with the Mahaweli irrigation scheme on a scale that worked against both liberalization and other components of public investment. The process that led to the adoption and funding of the Mahaweli scheme and continued support for that scheme even after its impact on the overall economic program had become apparent is examined in detail, with particular emphasis on the decisions and behavior of both the Sri Lankan government and of aid donors.

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