This article reviews the development experience of Sri Lanka as a third world wel fare state. Sri Lanka stands out as a unique example since it put strong emphasis on the social sector even during the early phases of its development path. The social democratic state evolved in such a way that it was committed to the pursuit of greater equity. Although the country ranked low in terms of per capita GNP, it stood out on a range of social indicators such as the Human Development Index (HDI). Thus, Sri Lanka was able to achieve greater equity in the allocation of re sources and an improved living standard, which helped it to enhance the level of human development. However, the post-1977 era saw the new government depart from its earlier social policies by promoting neo-liberal economic policies. But the Centre-Left coalition which came to power in 1994 is committed to structural adjustment with a human face, with its thrust on distributive justice and social equality. This article suggests that the way forward is to integrate minority politics and welfare politics and to do away with the electoral populism of the past.
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