Public Accountability, Public Expenditure, Management and

Governance in Sri Lanka, 1948-1993

by David Hulme and Nimal Sanderatne
Governance Series

That those in positions of authority should publicly account for their decisions and use of public resources
has long been a tenet of democratic theory. The information revealed by systems of accountability, it is
argued, will permit the electorate to judge the quality of policies and the integrity of implementation so that
the most able and honest can be selected to govern. More recently, the notion of accountability has been
linked to that of economic development as a central element of the ‘good governance’ that some believe to
be positively associated with higher rates of economic growth and improved levels of human welfare. Public
accountability, it is postulated, leads to the selection of policies that will promote development and ensures
that public resources are used to yield their greatest return on investment. The World Bank, the European
Council, Commonwealth Heads of Government, the UK’s Overseas Development Administration and the
Heads of State of the Organisation of African Unity, amongst others, have all linked accountability to
economic development in the early 1990s.

Despite the hypothesised importance of accountability in the processes of governance and development
there have been few detailed studies exploring the precise nature of accountability in Asian countries. This
paper seeks to fill this gap by examining political and administrative accountability in Sri Lanka since
independence, with a particular focus on public expenditure management. It commences with a discussion
of the concept of ‘accountability’. This is followed by a brief description of the Sri Lankan background and
public expenditure trends in the country. The main parts of the paper then examine the changing nature of
ex-ante and ex-post accountability and the functioning of the ‘watchdogs’ that police the system. It is found
that accountability has eroded steadily since the early 1970s with a rapid deterioration from 1989 till 1992.
This paper deals with the period upto 1993. There has been some improvement in accountability since
1993, but the period is too close and too short to evaluate at present. The new government which took office
in 1994 has exposed several areas in which the previous government flouted accountability. The concluding
sections explore the reasons for the weakening of political and administrative accountability in the country,
speculate on what is likely to happen in the future, and shed light on the theoretical issue of the relationship
between public accountability and the processes of economic development.