Contents: 1. Purpose, scope, and preview. 2. Industrial policy in developing countries: changing perspectives. 3. Industrial development policy in Sri Lanka: historical overview. 4. Reforms and the incentive structure since 1977. 5. Industrial growth and adjustment. 6. Foreign direct investment and export-oriented industrialization. 7. Liberalization and export performance. 8. Liberalization reforms and factor productivity growth. 9. Conclusions and inference. Statistical appendix. References. Name index. Subject index.

"Sri Lanka's experience provides a valuable repository for the study of the impact of transition from import-substitution to outward-oriented policy on industrial growth and adjustment in a developing economy. The authors document and evaluate the structure and growth of output, export orientation, factor proportions, employment, and productivity in the Sri Lankan manufacturing sector. A comparative analysis is made in the context of existing literature on the subject. The study concentrates on a number of important conceptual issues that have long dominated academic and policy debate in this area.

"Describing reforms since 1977, Athukorala and Rajapatirana use detailed empirical analysis to show how Sri Lanka's rapid progress in industrialization and employment generation can be attributed to reforms. The Sri Lankan case is particularly interesting because it is a latecomer to the strategy of export-oriented growth. The lessons are of immense value to other countries. The authors convincingly argue that being a latecomer does not hamper progress as long as there is a complementary liberalization of both trade and investment policy.

"The book will interest researchers and students of economics and development, as well as policy-makers." (jacket)

[Prema-Chandra Athukorala is Senior Fellow, Department of Economics, Research School of Pacific and Asian Studies, Australian National University.

Sarath Rajapatirana is Visiting Scholar, American Enterprise Institute, Washington DC.]