Has Sri Lanka’s crisis-driven import controls incentivised import substitution?

By Dr Asanka Wijesinghe and Nilupulee Rathnayake

Continued from Yesterday

Revisiting import controls on food products is particularly important due to their impact on urban and suburban households. These controls exacerbate food costs and shortages, burdening households, especially those with low incomes. More damagingly though, the distortion in incentives (the import-substitution incentive structure) perpetuates labour movement and retention in the agriculture sector.

More details on this study can be found in Wijesinghe, A., Yogarajah C., and Rathnayake N., (forthcoming) “Import Controls in Sri Lanka: Political Preference and Incentive Distortions”, International Economic Series, Institute of Policy Studies of Sri Lanka. Colombo.

Link to original blog: https://www.ips.lk/talkingeconomics/2023/06/12/has-sri-lankas-crisis-driven-import-controls-incentivised-import-substitution/

Asanka Wijesinghe is a Research Fellow at IPS with research interests in macroeconomic policy, international trade, labour and health economics. He holds a BSc in Agricultural Technology and Management from the University of Peradeniya, an MS in Agribusiness and Applied Economics from North Dakota State University, and an MS and PhD in Agricultural, Environmental and Development Economics from The Ohio State University. (Talk with Asanka – asanka@ips.lk)

Nilupulee Rathnayake is a Research Assistant working on Macro, Trade and Competitiveness research at IPS. She holds an MSc in Development Economics from the University of Nottingham, United Kingdom, and a BA in Economics from the University of Colombo, Sri Lanka. (Talk with Nilupulee – nilupulee@ips.lk)