In Whose Interest? Macro-economic Policy-making and Poverty Alleviation in Sri Lanka: Sustained NGO Advocacy in the 1980s and 1990s

Abstract

The World Bank’s primary mission has been the alleviation of poverty since its foundation 50 years ago. The Bank has claimed the lead role in this most difficult task, particularly since the Presidency of Robert McNamara in the 1970s and the 1980 World Development Report. Although it initially built its reputation on large-scale infrastructure projects and had periods during which emphasis was placed on agriculture and a basic needs approach, in the late 1970s the institution came to the conclusion that without the correct economic policy framework no investment would produce the economic growth necessary to reduce poverty. This shift in the Bank’s focus brought a concentration on policy-based lending to assist governments change economic policies towards a model that reduced the state sector and increased market orientation. This coincided with the mid-1970s economic crisis in Sri Lanka and the UNP’s electoral victory in 1977. Sri Lanka’s new government quickly sought assistance from the Bretton Woods institutions (the IMF and World Bank) to stabilise the island’s economy and reorient it towards market-led growth. Sri Lanka, therefore, was among the first of the Fund’s and the Bank’s members to introduce what became commonly known as a structural adjustment programme.