Sovereign Debt Crises: Impact on Domestic Governance, Political and Economic Stability

Abstract

This article provides issues related to sovereign debt crisis and its widespread long-term impacts on debtor Nations. These crises are very complicated that they not only can ruin economies but also severely effect governance, political stability and social harmony of a country. The objectives of the article are to analyze these complex and multi-layered impacts and provides strategic recommendations. This article employed interdisciplinary approach that integrates economy, management and political science. This research incorporates empirical data, theoretical insights and case studies. The methodology of this article involves a comprehensive and precise analysis of historical and contemporary case study to identify the pattern and sequence of sovereign debt crisis. Results of this article indicates that debt crisis increase economic decline, destabilize political institution and erode public trust in governance. It also includes recommendations for policy makers those are implementing robust debt management framework, enhance governance structures, fostering economic diversifications and promoting social cohesion. This article suggests valuable insights for academic and policy makers to overcome the adverse effect of sovereign debt crisis and enhance long term stability in country.