Abstract

The objective of the paper is to examine the role of the two donor agencies, the IMF and the World Bank in the formulation of social welfare policies in the post-independence Sri Lanka. The ideologies of the two major parties in Sri Lanka, the United National Party (UNP) and the Sri Lanka Freedom Party (SLFP), became the determining factor in the formulation of social welfare policies before 1977. In this context, the IMF and the World Bank played two different roles before 1977. Meanwhile, the ideological gap existed between the two major parties began to disappear after 1977 with the introduction of liberalized economic policies. The IMF and the World Bank played an important role during the post-1977 period. There was evidence that these funding bodies influenced in the formulation of social welfare programmes under the two major parties. The guideline recommended by these two organizations adversely affected the subsidized rice ration, one of the major welfare programmes, in the country