Sri Lanka's Trade Policy: Reverting to Dirigisme?

This paper surveys recent development in Sri Lankan trade policy, with an emphasis on emerging protectionist tendencies, using Sri Lanka’s Trade Policy Review (2010) by the World Trade Organization as a reference point. The Sri Lankan experience for over the three decades following the liberalization reforms started in 1977 has clearly demonstrated that an outward-oriented policy regime can yield a superior development outcome compared to a closed-economy regime, even under severe strains of a protracted ethnic conflict and macroeconomic instability. Viewed against this back drop, recent developments in the Sri Lankan policy scene do not seem to augur well for the future of the Sri Lankan economy.