ABSTRACT
An intriguing issue in development economics in recent times has been the impasse faced by several developing economies whereby they are, despite the fulfillments of most, if not all, of the traditional prerequisites for growth, locked into a “slow-growth steady state.” But, it is now increasingly recognized that the cardinal missing link has actually been the absence of a favorable politico-institutional milieu.1 Fiji and Sri Lanka could easily be cited as typical examples reflecting such a dilemma. They have both, in their efforts toward development, moved with times and adopted policies governed by suitable growth strategies, which have been in vogue and internationally recognized.2 Yet, their economies are largely stagnant, posing serious challenges to policy makers. The fundamental reason for their failure lies not in the pursued policies but more in their inability to marry these policies with compatible sociopolitical management for desirable outcomes. Ethnic conflicts are at the core of such institutional mismanagement, affecting the political as well as economic spheres.
