Search results

The purpose of this paper is to answer the question: does a bilateral free trade agreement (FTA) lead to an improvement in the security of a member country and greater peace between two member countries in the developing world?

This paper reviews existing literature and uses the idea of non‐economic gains from regional trading agreements to explain how Sri Lanka managed to use FTAs to neutralise India and obtain military assistance from Pakistan using its FTAs with two countries during the recently concluded war.

Even though political objectives were not explicitly outlined in Sri Lanka's two FTAs with its big rival neighbours (India and Pakistan), the FTAs helped Sri Lanka to successfully execute the war against the LTTE (the Tamil Tigers) by neutralising India on the one hand and gaining military assistance from Pakistan on the other.

The research approach is basically qualitative. However, there is need to develop a comprehensive theoretical model to capture non‐economics gains from FTAs.

Although there is a growing body of literature on the underlying political and strategic motivations of countries forming regional and bilateral trading arrangements, this paper adds to understanding of what motivates small developing countries to form trade agreements with big neighbours.

There is a large body of literature on the link between trade liberalisation, growth and poverty. However, less attention has been paid to the relationship between trade and regional disparities. The purpose of this paper is to identify and quantify the regional impacts of trade liberalisation, particularly in the war-affected regions and to understand to what extent trade reforms can contribute to the post-war recovery process and long-term economic and political stability in Sri Lanka.

The authors developed a single country multi-regional computable general equilibrium (CGE) model for the Sri Lankan economy to meet the need for a detailed country study as emphasised in the recent literature.

Both short-run and long-run results suggest that all regions including war-affected regions in the country gain from trade liberalisation, although gains are uneven across regions. Furthermore, the results suggest that war-affected regions gain more relative to some other regions in the long run.

According to the best of the authors’ knowledge within country regional impact of trade liberalisation using a multi-regional CGE model has never been attempted for Sri Lanka. The results of this study, even though based on Sri Lankan data, will be relevant to other developing countries engulfed in internal conflicts with regional economic disparities.

There has been growing interest in recent years in modelling various poverty‐related issues. However, there have not been many attempts at empirical estimation of best‐fit income distribution functions with an objective of subsequent use in poverty focused models. The purpose of this paper is to fill this gap by empirically estimating best‐fit income distribution functions for different household income groups and computing poverty and inequality indices for Sri Lanka.

The authors empirically estimated a number of popular distribution functions found in the income distribution literature to find the best‐fit income distribution using household income and expenditure survey data for Sri Lanka and subsequently estimated various poverty and inequality measures.

The results show that the income distributions of all low‐income household groups follow the beta general probability distribution. The poverty measures derived using these distributions show that among the different income groups, the estate low‐income group has the highest incidence of poverty, followed by the rural low‐income group.

According to the best of the authors' knowledge, empirical estimation of income distribution functions for South Asia has never been attempted. The results of this study, even though based on Sri Lankan data, will be relevant to most developing countries in South Asia and will be very useful in developing poverty alleviation strategies.