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THE INSTITUTIONAL POLICY FRAMEWORK FOR REGULATION AND COMPETITION IN SRI LANKA
Centre on Regulation and Competition
WORKING PAPER SERIES
Paper No. 40
THE INSTITUTIONAL POLICY
FRAMEWORK FOR REGULATION
AND COMPETITION IN SRI LANKA
Malathy Knight-John
Institute of Policy Studies
(Sri Lanka)
December 2002
ISBN: 1-904056-39-3
Further details:
Published by:
Fiona Wilson, Centre Secretary
Centre on Regulation and Competition,
Institute for Development Policy and Management, University of Manchester,
Crawford House, Precinct Centre, Oxford Road, Manchester M13 9GH, UK
Tel: +44-161 275 2798 Fax: +44-161 275 0808
Email: crc@man.ac.uk Web: http://idpm.man.ac.uk/crc/
1
THE INSTITUTIONAL AND POLICY FRAMEWORK FOR
REGULATION AND COMPETITION IN SRI LANKA
Abstract
The liberalization of the Sri Lankan economy in 1977 and the privatization of
state enterprises in the ensuing years, created a need for competition policy and
rules-based regulatory systems to address distributional concerns. However, the
integration of these newer external regulatory processes into the policy framework
was slow due to an ongoing civil war, pressures to finance the burgeoning fiscal
deficit and the related move to opt for rapid privatization. In addition, the policy
and governance milieu, institutional structures, and legal framework within which
these reforms were finally formulated and implemented did not allow for an
effective competition and regulatory regime.
This paper describes and analyzes the policy, institutional and legal framework
for competition and regulation in Sri Lanka, placing them in the context of
pervasive bad governance practices. It is argued that rampant political capture is
the principal obstacle to the creation of effective competition and regulatory
agencies.
The paper also poses the following questions - how to build effective competition
and regulatory institutions and systems and to create the conditions for good
regu
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