: an assessment of Sri Lankan experience

  • Malidawu Liyanage M Rupasinghe

    Student thesis: Doctor of Philosophy (PhD) - CDU


    Since the mid-1970s a number countries have successfully implemented privatisation of state-owned enterprises (SOEs) as a policy to reduce government budget deficit and to improve efficiency of the public sector. Policy makers in Sri Lanka started to adopt market-friendly economic policies from 1977. Consistent with such economic policies, privatisation of SOEs was introduced to improve efficiency in Sri Lankan SOE sector. A more formal programme of privatisation was launched in 1989 with significant criticisms.

    The main reason put forward by policy makers for privatisation was perceived and actual inefficiency of SOEs. Inefficiency was interpreted by them in terms of financial losses and privatisation was expected to improve the situation. This study attempts to investigate the role played by privatisation in improving efficiency of SOEs in Sri Lanka. A thorough literature survey was conducted: to examine and analyse various forms of privatisation, b) to evaluate the efficiency argument, c) to discuss the development and the role of SOEs in Sri Lankan economy. In addition, four hypotheses were tested to evaluate the impact of privatisation on profit/profitability, output, employment and productivity.

    The statistical analysis provided in this thesis is based on a sample of ten enterprises. Both secondary and primary data were used and the former was for the period from 1986 to 1996. The primary data came from a field survey on employees of the enterprises included in the sample. To analyse data, four statistical tools were employed: Wilcoxon Sign Ranked Sum Test, t-test of matched pairs experiment, multiple regression and Chi-Square test.

    The statistical analysis shows that: a) efficiency of SOEs in terms of financial profits and profitability has not significantly improved after privatisation, b) real output has shown no significant improvement after privatisation, c) privatisation has resulted in significant reduction in employment after privatisation, d) employee productivity has increased significantly after privatisation. Finally, the statistical analysis shows that incentives to employees in term of increased salaries/wages and gifted shared, have a strong positive relationship with employee attitudes towards privatisation. Such attitudes may have contributed to the increase in employee productivity.
    Date of AwardSept 1998
    Original languageEnglish
    SupervisorSajid Anwar (Supervisor)

    Cite this