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This paper examines the economic performance of Ceylon/Sri Lanka in the colonial era and after becoming independent in 1948. It addresses the reasons for slow economic growth in the years up to 1975, and the impact of the economic reforms implemented from the late 1970s through to the end of the century. The paper compares Sri Lanka not only with India, Pakistan and Bangladesh but also with the more successful countries of East and Southeast Asia. It concludes that while Sri Lanka has made considerable progress in terms of GDP growth and also built on the favourable colonial legacy in health and education, the consistent implementation of economic reforms has been hampered by electoral politics. Sri Lanka is an important case study of the interaction between a democratic electoral system and economic transformation. The paper also examines the implications of unrest among the Tamil minority, an inheritance from the colonial era which most governments have found difficult to deal with
