State vs. market in search of good governance: The case of Sri Lanka telecommunications industry reforms

This research investigates the relationship between the state and the market under independent regulation that accompanied telecommunications‐sector reforms in Sri Lanka. It assesses whether the telecommunications regulator has been functioning in line with market principles. Building on the findings of an exploratory study undertaken for a doctoral degree in 2006–07, the study finds that the regulator has been performing under a plethora of constraints: institutionally, politically, legally, and socially. Institutionally, the regulator is affected by its own internal problems, a lack of capability and capacity, and a complexity created by the other agencies. Politicians have become exceptionally powerful, affecting every function of the regulator. Legal provisions have proven inadequate. Socially, regulatory functions are affected, causing delays. It is important to highlight the fact that these are interconnected; one creates or influences another. The findings suggest that the environment in which the regulator operates affects the credibility and effectiveness of a regulatory framework. The authors, with their extensive expertise, argue that such blockages could be overcome through various measures proposed in the conclusion. © 2010 Wiley Periodicals, Inc.