The influence of political instability and economic crisis on human capital in Sri Lanka: a literature review

Nirma Sadamali Jayawardena, Narayanage Jayantha Dewasiri, Prakash Singh and Isuru Koswatte

Chapter 8 in Augmenting National and International Human Capital, 2026, pp 123-137 from Edward Elgar Publishing

Abstract: For effective policy formulation and decision-making, it is essential to understand the intricate relationships between key macroeconomic variables such as inflation, interest rates, exchange rates, debt, foreign reserves, and economic growth. As a result of the COVID-19 pandemic, there has been renewed interest in predominant debt crises, with demands for debt relief for developing nations. Therefore, it is essential to contextualize recent research findings in this field within the broader economic landscape, particularly in light of the growing concerns regarding sovereign debt crises in various countries, including Sri Lanka. The first section provides an overview of unstable government and economic crisis on human capital in developing countries. The second section provides an overview of long-term consequences such as declining productivity and competitiveness due to the migration of skilled professionals, government budget constraints on public education, high unemployment rates and reduced career prospects among youth, economic instability that affects women's participation, and lack of confidence in public institutions that discourages civic engagement and long-term investment in human capital. The final section discusses the conclusion by providing implications for future researchers to study unstable government and economic crisis on human capital in South Asian context

Keywords: Human Capital; Unstable Government; Economic Crisis; Sri Lanka; South Asia (search for similar items in EconPapers)
Date: 2026
ISBN: 9781035318278
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