Liberalization and inequality in Sri Lanka. A comment

Paul Glewwe has recently argued against the widely held view that the liberalizing policy reform in Sri Lanka in the late 1970s increased inequality. We contend here that Glewwe has not convincingly discredited the household income distribution data, that he has misinterpreted the expenditure distributions, and that he has not considered the welfare distributional effects of the relative price changes induced by the policy reforms. Furthermore, we argue that a sound basis remains for the contention that the policy reforms of the late 1970s increased inequality.