The end of the nearly three-decade-long internal conflict and the graduation to middle-income status of Sri Lanka significantly shifted the development finance ecosystem in the country. The onus on traditional sources of external development finance, through the likes of bilateral and multilateral overseas development assistance (ODA) from developed nations, has decreased gradually. During the past decade, the country has seen a rise in South-South Cooperation (SSC), coming from India and China in particular. Together, each of these variables has created a unique ecosystem, where traditional and emerging donors are both equally well established.

This article by Kithmina Hewage and Harini Weerasekera borrows from an in-depth study comparing the institutional frameworks used in North-South Cooperation (NSC) and SSC projects in Sri Lanka. It discusses three themes that influence the success and failure of SSC projects: 1) measures adopted to stimulate local buy-in, 2) the importance of central and decentralised government, and finally, 3) the role of international agencies.

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