A COMMENT ON “GROWTH AND EQUITY IN DEVELOPING COUNTRIES: A REINTERPRETATION OF THE SRI LANKAN EXPERIENCE,” BY BHALLA AND GLEWWE

Abstract

The inaugural issue of this journal contained an article by Bhalla and Glewwe which addresses some problems that arise in attempting to assess relative success or failure of policies in different countries or policy regimes (Bhalla and Glewwe, 1986, p. 36). Their conceptual framework contrasts two approaches to raising economic welfare: direct or basic needs and the indirect or economic growth approach (p. 61). From 1960 to 1977 Sri Lanka is seen as approximating the first regime, while the subsequent period, following the change of government in 1977, is cast as having a closer correspondence to the second. The general conclusion invited by the paper is that the change in policy orientation has been for the better: evidence ... suggests that the post-1 977 policies have not been detrimental to equity objectives and may offer more promise than those which they replaced (p. 62). In what follows I will suggest that Bhalla and Glewwe have exceeded the interpretations which their data will support. Accordingly, their case cannot be sustained, much as one would like to have answers to the questions they raise. For my own part, I share the majority view that Sri Lanka's system of food subsidies was (and to some extent remains) inefficient. But it is surprising to find that Bhalla and Glewwe also question performance in the social field between 1960 and 1977, and that they totally ignore Sri Lanka's current state of disruption in their optimistic prognosis.