"But when you compare it with the evidence-based policy debate in Ghana or India or Bangladesh it is much more than in Sri Lanka."

Evidence Based

When Ghana embarked on a reform program the government had gone on TV and debated with economists, challenging and debating policies.

People had argued policies through newspaper articles. But in Sri Lanka there was very little evidence based debate in newspapers.

He said Sri Lankans wish for natural resources such as oil, but many African countries which were rich in natural resources had also lagged behind nations such as Korea which were not rich in natural resources.

Natural resources exports had sometimes appreciated exchange rates, hurting manufactured industry. In many African countries a contest for natural resources especially among different ethnic groups had sparked civil wars.

Many resource-rich African countries had a bad record in spending money they easily collected from natural resources, while countries in East Asia collected money from taxes.

"Public investment decisions [in Africa] were particularly bad," Devaranjan said.

"They build bridges to nowhere, presidential palaces in the president's village."

Resource Curse

Countries like Nigeria were now in a worse position after the discovery of oil than they were before. In 1970 per capita income in Nigeria was 900 US dollars. After the oil boom it was 450.

This had made many to refer to the experience as a natural resource 'curse'. But countries like Zambia, which had no civil wars had also underperformed.

Many African countries instead wished to be rich in human resources. Sri Lanka was rich in human resources. But the information technology boom that was seen in India had largely by passed Sri Lanka. Meanwhile educated youth were unemployed.

Sri Lanka has had several civil wars. The Sinhalese possibly from educated youth had engaged in armed uprisings against the government twice. The Tamils minority had also sparked a civil war.

Though Sri Lanka had made impressive gains in literary and health indicators it had failed to make economic gains. There was a fair amount of consensus about what needed to be done.

These included reforming education, labour markets, land markets, and achieving macro-economic stability and better public spending.

Political market failure

"I think there is a fair amount of consensus around what are these policy reforms that are needed in order to be able to make use of this rich resource, which is the human resources of this country," Devaranjan, who is of Sri Lankan origin said.

"And then the puzzle to me is always, this is a democracy, this is a literate and educated population; why don't we vote for these reforms that will benefit them.

"The median voter benefits from this kind of reform, yet it does not happen."

In Sri Lanka reforms were opposed by small vocal interest groups who played on coalition politics. But he said it did not really explain how very small groups wielded so much power in policy.

"I think it comes down to what the literature now calls political market failures," Devaranjan said.

"There is a real asymmetry between voters and politicians in this country - as in many countries."

In the past 10 years, many African nations had made impressive economic gains and had also attained stable low inflation economies, except for examples like Zimbabwe. Average inflation had halved to around 5.0 percent.

Fiscal balances in Africa were about 4.0 percent lower. Sri Lanka on the other hand was a high fiscal deficit country by global standards.

In many countries, governments were being held accountable for spending, especially when money was collected from the people through taxes.

But Devaranjan says the improvement in policy must come from domestic consensus if the country is to reach higher performing countries.

"It should not come out of Washington D.C. but Colombo," he said. "Then it can happen."