Coercive Policy Diffusion in a Developing Country: The Case of Public-Private Partnerships in Sri Lanka

Abstract

Over the last two decades, public-private partnership policy has been adopted in developing countries to a lesser degree than in industrialised countries. This paper argues that this policy has been diffused to developing countries like Sri Lanka with coercion from international aid-granting organisations through conditionalities attached to financial assistance. It details the country-specific challenges faced by Sri Lanka in responding to conditionalities as it has sought to implement this policy. Drawing on policy diffusion theory the paper develops a framework to be used in analysing the issues under investigation.

Key Words:

• Public-private partnership
• Sri Lanka
• challenges
• developing countries
• coercion
• policy diffusion

Notes

¹ For example UNP was in government during 1965-70 and 1977-94. The SLFP has been in government in 1956-65, 1970-1977 and, since 1994, has been a major party in the United People's Freedom Alliance government.

² According to Kovach & Lansman (2006: 19), 20% of all World Bank conditions for poor countries are economic policies. Half of these impose some sort of privatisation and trade liberalisation conditions. Further, 43% of all IMF structural conditions focus on economic policy reforms. Of these, half are privatisation related.

³ In 2008, PSIDC was merged with the National Development Trust Fund (NDTF) and SME bank in order to expand the operation of Lanka Putra Bank.

⁴ The public sector comparator calculates the net present cost of the hypothetical public provision of the infrastructure and the services (English, 2006).

⁵ In the period 1971-89, JVP attempted twice to capture state power by creating uncertainty in Sri Lanka. Since the early 1990s JVP has been operating as a democratic political party.