Dileni Gunewardena has consulted for the World Bank and the UNDP, and taught economics to undergraduates for nearly three decades. Cultural conditioning contributes more to national economic ideology than formal economics education, she says.
How do you interpret the Sri Lankan citizen’s expectation that “the government should supply everything”?
Research shows that countries are different in how they regard inequality and the role of the government. In general, European countries are more inequality-averse than the United States, and I think it’s safe to say that people in the US prefer a small government compared to people in Europe.
There are many reasons as to why people in different countries think differently, including the history of the country, their relative position within society and the opportunity for mobility within society. In Sri Lanka, if a lot of people are just average, and if they don’t perceive much opportunity for improving their lot (mobility) – or they see that they could only do it by getting a government job – then they are more likely to prefer the government playing a larger role.
Would you agree that a majority of Sri Lankans respond to “privatisation” negatively?
I think many Sri Lankans do have an inbuilt gut reaction against privatisation. I think it comes from when and where they grew up, went to school; how their parents voted; what their teachers thought; and what values were taught in temples, mosques and churches, among other things.
[pullquote]If a lot of people are just average, and if they don’t perceive much opportunity for improving their lot (mobility) – or they see that they could only do it by getting a government job – then they are more likely to prefer the government playing a larger role[/pullquote]
Speaking for myself, I grew up in the 1970s during the SLFP government and state-dominated economy. Despite shortages and austerity measures, I thought of socialism as a good thing, mainly owing to influences in my home, school and religious environment. I believe my experience was fairly common and that many Sri Lankans of my generation, and especially those who live outside the Western province, think this way. Interestingly, I don’t think it is true of young, urban, upper class or upper-middle class Sri Lankans today.
How has economics education contributed to deepening this thinking?
I don’t believe education – economics or otherwise – has a huge role to play in how attitudes and opinions are formed, and this is not specific to Sri Lanka; it is true of any country. I can only speak for the economics curriculum at Peradeniya, although I am fairly sure that it is representative of the undergraduate economics curriculum elsewhere.
Much of it is mainstream economics; in fact, we have been accused of neglecting heterodox/Marxist economics. So, my answer is: not much.
To what degree do you think other streams of study (eg: political science, sociology, history) influence Sri Lanka’s attitude to the government and privatisation?
That’s hard for me to say, in terms of specific courses of study or curricula. I would rather say that ideas from these disciplines influence public discourse probably to a greater extent than mainstream economics ideas.
If every Sri Lankan had a compulsory typical undergraduate economics education, how would their view of the economy and the role of the government be different?
First, there would be a greater understanding and appreciation for basic economic ideas like scarcity and efficiency. For example, the idea that “there is no such thing as a free lunch” – i.e. that everything, even the services that the government supplies, has a cost and that someone, somewhere is paying for it. I think there would also be a greater appreciation of efficiency – the idea of using scarce resources optimally with minimum cost. Because undergraduate economics students learn the concept of externalities, the idea of cost would not just be thought of as market cost or private cost, but would also take into account the cost to the environment.
Second, I think they would have a more complex view of equality – not just desiring it, which I think is a good thing, but also seeing that income redistribution is necessary for equality to be achieved and that taxes are needed to improve social protection. They would see that expanding the government, so that more people get jobs and subsidies or services, comes at a cost.
Third, they would have a more realistic view of what governments can do, because they would learn that, just like there is “market failure” – a situation when free markets fail to allocate resources efficiently – there is also government failure – a situation where government intervention in free markets does not improve allocative efficiency and leads to a decline in economic welfare. They would realise that governments are also made of economic agents, looking out to do the best for themselves, and that setting up incentives where they do the best for the public is easier said than done. They may also have a better idea of where government intervention is useful and where the overnment is less likely to do better than the market.
There would also be continued healthy scepticism about the free market’s ability to deliver, but hopefully more enlightened and educated scepticism that would know the limits of the market in promoting equity, ensuring sustainability, and preventing gender and racial discrimination, etc.