An Implementation of Buddhist Economic Elements to Sri Lankan Economy: What, How and Effect
This study attempts to incorporate the income management principles suggested by the Buddhist economics for an economic unit into the modern economic growth models and apply it in the Sri Lankan economy where majorities are Buddhists. Sri Lanka is currently a prominent example to the small open economy in the globe as the economic liberalization policies has been continued by the country over a past four decades since 1977. However, both the micro and macro level economic indicators in the country evident to suggest that failure of economic liberalization policies in the case of Sri Lanka. For example both the internal balance (by means of economic growth, employment, budget deficit and poverty level) and external balance (the Balance of Payments) in the country are far from the desired level. With this background, a necessity arises an adaptation of alternative policy package or introducing the evolutionary amendment or ethics to the ongoing liberalization policies for reawakening the economy. In methodology, data and information were collected from major three sources: Buddhist literature, theoretical literature in modern economics and empirical data gathered by the Central Bank of Sri Lanka to get clear answers to the three research questions: what are the rules of income management policies put forward in the Buddhist economics; how these policies practice in a real economy; and what would be the impact of these policies on the happiness of communities? One of the more significant findings to emerge from this study is that Buddhist economics has effective power to enhance happiness of the community in terms of all macroeconomic variables: consumption, investment, savings and growth of production and building social capital. It was also shown that in the long run, modern liberalization together with elements of the Buddhist economics results the external and internal balance simultaneously and in turn sustainable development. The empirical findings in this study provide a new understanding of how to link the philosophers (ethics) and economists (modern economic theories mostly based on competitive markets). Despite its exploratory nature, this study offers some insight into the idea that how to doing business better in a socioeconomic and political crisis situation in a country. Finally, further experimental investigations on ethics and economics as well as econometrics modeling are needed to forecasting the outcome of economic planning with the elements of Buddhist economics.