THE SMALL ISLAND NATION of Sri Lanka is one of many developing countries recovering from a lengthy civil war and now exploring ways to grow its economy. Government policies in the late 20th century promoted growth in the resource sector, including tea, rubber and the labor pool necessary to expand the garments sector. But now, with diminishing returns in the resource sector, the government is seeking new and different ways to foster economic growth. 

A new working paper, co-authored by a group of researchers at Harvard’s Center for International Development (CID), describes the ways in which Sri Lankan public officials have worked with the CID team to diversify the nation’s economy utilizing new data tools that target specific sectors ripe for growth. 

“Government agencies have become adept at supporting existing industries, but have not promoted large-scale entrepreneurial ‘emergence’ for over a generation,” the authors write. “When outside agencies, academics and consultants have offered advice on the issue, often under the guise of ‘diversification,’ the advice has largely stayed on paper or on the shelf.”

A group of Sri Lankan government officials began working with the CID Building State Capability team in August 2016, to leverage their approach to addressing complex development challenges called Problem Driven Iterative Adaptation (PDIA). PDIA engages people to “find their own solutions to pressing problems, learning as they progress and releasing new or latent capabilities in the process.”

The authors detail the ways in which distinct teams have been working on distinct problems, building templates, reaching out for relevant data, and engaging key stakeholders to identify those targets that demonstrate the greatest potential for growth within the current Sri Lankan economic eco-system.   

“Beyond the PDIA process…the challenge will be to take lessons about what made this process work and institutionalize such in other areas of Sri Lanka’s policymaking and implementation system,” the authors write. “This challenge involves ensuring that government recognize the kind of rules and structures needed to empower its people to facilitate and even lead adaptation in the economy (needed to achieve diversification goals).”

“…continued progress will depend on the degree to which Sri Lankan leaders recognize process rules that need changing to keep momentum going,” the authors conclude. “In a sense, these leaders should observe that government officials work most effectively when given structured autonomy—organized around a clear problem, given freedom to experiment in action, within a set of regular and constructive reporting and feedback relationships.”

Get smart & reliable public policy insights right in your inbox.