In April 2022, Sri Lanka became the first South Asian country in the post-independence era to default on its external sovereign debt, triggering a severe economic and political crisis marked by inflation, shortages of essential goods, mass protests and institutional instability (Akter et al., 2025; Samarakoon, 2024). The crisis rapidly extended beyond macroeconomic deterioration to broader transformations of governance and legality. Emergency regulations were expanded, fiscal authority became increasingly centralized within executive institutions, and negotiations with the International Monetary Fund (IMF) introduced externally conditioned legal and policy reforms into domestic governance structures (Perera, 2024; Wijetilleke, 2024). These developments indicate that the crisis was not solely an economic rupture but also a restructuring of the organization and exercise of legal and political authority within the Sri Lankan state.
Existing analyses of the Sri Lankan crisis have primarily emphasized political economy factors, such as sovereign indebtedness, governance failures, elite mismanagement, and dependency on external financing (Akter et al., 2025; Kupriyanov, 2024; Samarakoon, 2024). While these studies provide important explanations for the origins and consequences of the collapse, they tend to treat the state as a relatively coherent institutional actor responding to external economic pressures. This perspective insufficiently captures how crisis governance alters the internal distribution of authority across executive institutions, legal frameworks, administrative practices, and transnational regulatory mechanisms. Parallel scholarship on legal pluralism in Sri Lanka has largely focused on customary law, religious legal systems, and postcolonial institutional hybridity. However, this literature often examines plural legal orders as socially coexisting normative systems without fully addressing how economic crisis conditions reshape the hierarchy, interaction, and strategic deployment of these orders.
Consequently, existing scholarship lacks an integrated framework capable of explaining how economic crises restructure sovereignty through the interaction of domestic legal pluralism and transnational governance. This gap is theoretically significant because contemporary crisis governance increasingly operates through overlapping institutional arrangements in which authority is dispersed across domestic state institutions, emergency executive mechanisms, informal socio-legal practices and international regulatory actors. Conventional state-centric approaches struggle to explain these dynamics in detail. Classical theories of sovereignty, grounded in Weberian and Westphalian assumptions, generally conceptualize authority as being territorially centralized and institutionally coherent (Stirk, 2012). Even more recent global governance approaches often portray sovereignty as externally constrained or diluted by international actors rather than internally reorganized through interactions between domestic and transnational legal orders (Fioretos & Tallberg, 2021).
Similar limitations appear in legal pluralism scholarship. Although legal pluralism theory recognizes the coexistence of multiple normative orders, much of the literature remains primarily descriptive, focusing on legal coexistence without sufficiently examining the power asymmetries and governance strategies that structure the relations among competing legal authorities (Berman, 2020; Griffiths, 2015). These limitations become particularly pronounced during periods of economic crisis, when emergency governance, fiscal restructuring, and externally conditioned reforms transform the allocation and operation of legal authority in China. In such contexts, legal pluralism is not merely a residual characteristic of postcolonial governance but an active mechanism through which authority is negotiated, distributed and stabilized.
This article addresses this conceptual gap by advancing the concept of fragmented sovereignty. Fragmented sovereignty refers to a governance configuration in which legal and political authority is dispersed across multiple, partially overlapping domestic and transnational institutions that exercise differentiated but interrelated forms of control. Rather than signifying the disappearance of sovereignty, fragmentation describes its reorganization through layered, legal, and institutional arrangements. In Sri Lanka, this reconfiguration emerged through three interrelated processes: executive consolidation under emergency governance, incorporation of IMF-linked regulatory reforms into domestic legal frameworks, and the strategic use of plural legal orders in administrative and local governance practices. Therefore, sovereignty does not operate as a singular territorial monopoly but as a relational and internally differentiated structure shaped by interactions between domestic institutions and external governance regimes.
The theoretical framework guiding this analysis integrates legal pluralism theory, critical sovereignty studies, and Third World Approaches to International Law (TWAIL). Legal pluralism provides a conceptual basis for examining the coexistence and interaction of multiple normative orders, including statutory law, customary practices, administrative discretion, and transnational regulatory frameworks (Berman, 2020). Critical sovereignty theory contributes to a relational understanding of authority as contingent, negotiated, and continuously reconstituted across institutional sites (Tóth, 2023). TWAIL situates these transformations within the broader structures of global economic inequality and interrogates how international financial governance reshapes domestic legal autonomy in postcolonial states (Sánchez & Catalán, 2024; Gomez-Gonzalez et al., 2024). These approaches perform distinct analytical functions within the study: legal pluralism explains normative multiplicity; critical sovereignty theory explains the redistribution of authority across legal orders; and TWAIL explains the asymmetrical global conditions under which such redistributions occur.
This study examines how the 2022 economic crisis reconfigured Sri Lanka’s legal authority and sovereignty. This study addresses two interrelated research questions. First, how did the crisis redistribute legal and institutional authority across state, nonstate, and transnational actors? Second, through what mechanisms did this redistribution reshape the conventional understanding of sovereignty within international law and governance theory? To answer these questions, this study employs a qualitative case study design that combines doctrinal legal analysis with a qualitative examination of policy frameworks, institutional practices, and crisis governance mechanisms between 2022 and 2025.
This study makes three principal contributions. First, it develops fragmented sovereignty as a mid-range conceptual framework for understanding how authority becomes internally differentiated during crises. Second, it theorizes the interaction between legal pluralism and transnational economic governance as a dynamic process through which external financial conditionalities are embedded within domestic legal structures. Third, it introduces the concept of embedded conditionality, defined here as the institutionalization of externally mandated economic governance norms within domestic legal and administrative frameworks, such that compliance persists beyond immediate bailout negotiations or temporary crisis-management arrangements. In Sri Lanka, embedded conditionality is observable through the incorporation of IMF-linked fiscal reforms, central bank restructuring, debt sustainability mechanisms, and public financial management reforms into binding domestic legal and regulatory structures. By conceptualizing conditionality as internally institutionalized rather than externally imposed, this article demonstrates how transnational governance imperatives become stabilized within the operational architecture of state authority (International Monetary Fund, 2023b).
By situating Sri Lanka within broader debates on sovereignty, global governance, and postcolonial legality, this article argues that contemporary sovereignty in crisis-affected Global South states is not simply eroded under external pressure. Instead, it is being reorganized through layered and relational forms of governance that redistribute authority across overlapping, legal, and institutional domains. Recognizing this transformation is essential for understanding how crisis governance reshapes the structure of state authority in an era of intensified economic vulnerability and transnational regulatory interventions.

This study adopts a qualitative case study design to examine how the 2022 economic crisis in Sri Lanka reconfigured the distribution of legal and institutional authority across the domestic and transnational governance domains. The analysis focuses on the period between April 2022, marked by Sri Lanka’s sovereign debt default and the intensification of emergency governance, and December 2025, by which point major fiscal, monetary, and institutional reforms associated with post-crisis restructuring had been substantially consolidated within domestic legal frameworks. This temporal scope enables the examination of not only immediate crisis responses but also the institutionalization of crisis-era governance mechanisms over time.
Sri Lanka was selected for this study because of its analytical purposiveness and theoretical grounding. Although several states, including Argentina and Greece, have experienced sovereign debt crises and extensive IMF intervention, Sri Lanka presents a distinct configuration that makes it particularly valuable for examining transformations in sovereignty and legal authority. Unlike Greece, whose crisis unfolded within the regulatory architecture of the European Union and Eurozone governance structures, Sri Lanka represents a postcolonial Global South state that operates outside supranational regional integration regimes. Unlike Argentina, where sovereign debt crises have largely been examined through the lens of macroeconomic instability and executive populism, Sri Lanka combines sovereign default with historically entrenched legal pluralism, emergency governance, mass anti-government mobilization, and externally conditioned institutional restructuring occurring simultaneously within a relatively compressed temporal period.
These features make Sri Lanka a critical and theoretically revealing case for three reasons. First, the crisis generated overlapping forms of governance intervention, including emergency executive consolidation, IMF-linked fiscal restructuring, and institutional reforms in central banking, taxation, and public finance. Second, these reforms unfolded within a historically plural legal environment, characterized by the coexistence of statutory law, customary practices, religious legal systems, and discretionary administrative governance. Third, the Sri Lankan case illustrates how postcolonial states negotiate external economic pressures while simultaneously relying on internally differentiated legal and institutional arrangements. The case is therefore valuable not because it is statistically representative but because it concentrates multiple dynamics of crisis governance, legal pluralism, and transnational intervention within a single analytically intensive setting. Consequently, the objective is theoretical refinement rather than statistical generalization.
Methodologically, the study is situated within a critical socio-legal framework that conceptualizes law not as a neutral regulatory system but as a site of institutional strategy, contestation and power redistribution. This orientation is informed by legal pluralism and TWAIL (Sánchez & Catalán, 2024; Griffiths, 2015), both of which foreground the interaction between multiple normative orders and asymmetrical global governance. Within this framework, the analysis adopts a process-oriented approach that traces how crisis conditions generate shifts in authority through interactions between domestic institutional practices and transnational governance mechanisms. The unit of analysis is the configuration of legal authority, operationalized through observable changes in institutional competencies, legal instruments, regulatory frameworks, and governance practices during the post-crisis restructuring period.
The empirical analysis draws on a purposively constructed corpus of primary and secondary materials covering the period from 2022–2025. This study examined approximately 70 primary documents and institutional materials. Primary sources include constitutional provisions, emergency regulations issued under the Public Security Ordinance, parliamentary debates, fiscal reform legislation, taxation amendments, the Central Bank of Sri Lanka Act No. 16 (2023), debt restructuring frameworks, IMF Extended Fund Facility (EFF) policy documents, executive directives, and official government statements. Secondary materials included scholarly literature, institutional reports, policy analyses, and socio-legal studies contextualizing the crisis and its governance implications. Documents were selected through theoretically informed purposive sampling, prioritizing materials that directly reflected transformations in the allocation, exercise, justification, or institutionalization of the legal authority.
The analytical strategy combines doctrinal legal analysis with qualitative content and discourse analyses (Al Arief, 2019; Hutchinson & Duncan, 2012). Doctrinal analysis is employed to identify formal legal transformations and examine how statutes, regulations, and policy instruments redistribute institutional competencies and decision-making authority. Particular attention is given to emergency governance measures, fiscal restructuring legislation, and regulatory reforms linked to IMF conditionalities. Simultaneously, qualitative thematic coding was applied to policy documents, institutional narratives, and governance statements to identify recurring patterns associated with executive consolidation, authority redistribution, embedded conditionality, normative layering, and strategic legal pluralism.
The coding proceeded iteratively through both the deductive and inductive stages. Initial coding categories were derived from the theoretical framework, including concepts such as “authority redistribution,” “embedded conditionality,” “executive consolidation,” and “normative layering.” These categories were subsequently refined through repeated engagement with empirical materials, allowing for the identification of emerging institutional patterns and governance contradictions. Discourse analysis further examined how legal and policy texts constructed narratives of necessity, legitimacy, crisis management, and fiscal discipline, particularly concerning externally conditioned reforms and emergency governance practices. This combined analytical strategy enabled the identification of the mechanisms through which the economic crisis reconfigured sovereignty, rather than merely descriptively documenting institutional change.
To strengthen the analytical robustness, this study employs triangulation across multiple categories of sources, including legal texts, policy frameworks, parliamentary materials, institutional narratives, and secondary scholarly analyses. Internal validity is reinforced through process tracing (Thomas & Gerring, 2006), whereby sequences of legal reforms, policy adjustments, and institutional restructuring are systematically linked to shifts in governance authority. Although this study does not seek statistical generalization, it pursues analytical generalizability by situating the findings within broader debates on sovereignty, legal pluralism, crisis governance, and transnational regulation in Global South contexts.
Nevertheless, this study has several limitations. Reliance on publicly available legal and institutional materials limits access to confidential negotiations, informal decision-making practices, and intergovernmental bargaining processes that may also shape governance outcomes. In addition, the single-case design restricts direct empirical comparisons across multiple jurisdictions. However, these limitations are partially mitigated by the study’s theoretical orientation and the process-tracing methodology. Sri Lanka functions as a theoretically revelatory case that enables closer examination of how sovereignty is reorganized through interactions between legal pluralism and transnational governance during periods of economic crisis. Therefore, the objective is not to produce universally generalizable claims but to refine the conceptual understanding of fragmented sovereignty and embedded conditionality in crisis-affected postcolonial states. Table 1 outlines the analytical framework, specifying the theoretical constructs, operational indicators, and corresponding data sources.

Table 1. Analytical Framework and Operationalization

Source: Author’s compilation (2026)

3.1. Reconfiguration of Legal Authority under Crisis Governance 
The first empirical pattern concerns the reconfiguration of legal authority through emergency governance measures and crisis-driven institutional restructuring in Sri Lanka following the sovereign default of April 2022 (International Monetary Fund, 2024). As foreign exchange reserves collapsed, inflation exceeded 70 percent by late 2022, and shortages of fuel, food, and medicine intensified, the state increasingly relied on exceptional legal mechanisms to manage political instability and economic disruption (Akter et al., 2025; Samarakoon, 2024). In response to mass anti-government protests associated with the Aragalaya movement, successive states of emergency were declared under the Public Security Ordinance in April, May, and July 2022, granting expanded powers to the executive and security apparatuses (Perera, 2024). Emergency regulations authorized restrictions on public assembly, expanded detention powers, the deployment of armed forces for civilian policing functions, and enhanced executive discretion in maintaining public order. These measures significantly altered the institutional balance among executive authority, parliamentary oversight, and civil liberties.
Simultaneously, the government introduced accelerated fiscal and regulatory reforms linked to negotiations with the IMF’s Extended Fund Facility (EFF). These reforms included substantial increases in the Value-Added Tax (VAT), restructuring of public expenditure frameworks, reform of state-owned enterprises, and enactment of the Central Bank of Sri Lanka Act No. 16 (2023), which strengthened central bank independence and formally limited direct political influence over monetary policy (Gheethanjali et al., 2025; Government of Sri Lanka, 2023; International Monetary Fund, 2023b; Ramasamy & Baniamin, 2025). The IMF agreement also requires revenue-based fiscal consolidation, debt sustainability benchmarks, anti-corruption reforms, and strengthened public financial management systems. These policy commitments were not confined to external negotiations; they were progressively codified within domestic legal and regulatory structures through legislation, executive directives, and institutional reform mechanisms.
This process illustrates what this study conceptualizes as embedded conditionality. Embedded conditionality refers to the institutionalization of externally mandated economic governance norms within domestic legal frameworks, such that compliance persists beyond immediate bailout negotiations. In Sri Lanka, IMF-linked conditionalities were embedded through concrete legal and institutional reforms. For example, amendments to taxation policy increased VAT rates from 8 percent to 15 percent and expanded tax bases to satisfy IMF revenue targets (International Monetary Fund, 2023b). Similarly, the Central Bank Act (2023) formalized inflation-targeting mechanisms and enhanced institutional autonomy in accordance with international financial governance standards. Debt restructuring frameworks and fiscal responsibility measures further translated externally negotiated macroeconomic objectives into legally enforceable, domestic obligations. Therefore, conditionality operated not merely as external policy guidance but as a mechanism through which transnational governance priorities were incorporated into the architecture of domestic law.
The interaction between emergency governance and externally conditioned reforms generates a layered redistribution of authority across multiple institutional sites. Executive institutions consolidated crisis management powers internally, while transnational financial governance mechanisms increasingly shaped domestic regulatory and fiscal policies externally. Rather than producing a simple erosion of sovereignty, the crisis restructured authority through differentiated but interconnected legal structures. Fiscal policy, monetary governance, emergency administration, and public financial management became partially insulated from ordinary democratic contestation through the juridification of externally aligned reform commitments (Kelemen, 2015).
Figure 1 illustrates this causal chain. The diagram models how the economic crisis triggered emergency governance responses that consolidated executive authority domestically, while simultaneously intensifying engagement with external financial actors, particularly the IMF. These parallel processes converged through the translation of IMF conditionalities into domestic legal frameworks, including fiscal legislation, Central Bank of Sri Lanka (2023) reform and debt restructuring mechanisms. The result was the juridification of policy commitments and the redistribution of authority across domestic and transnational governance structures, ultimately producing a fragmented sovereignty configuration. The figure demonstrates that fragmentation emerged not through state collapse alone but through the institutional interaction between emergency executive governance and externally embedded regulatory reform.

Figure 1. Mechanism of Crisis-Induced Authority Reconfiguration

Source: Author’s illustration (2026)

From a doctrinal perspective, these developments reflect the juridification of economic governance, whereby policy commitments negotiated within international financial arrangements acquire binding domestic legal status (Magnussen & Banasiak, 2013). This process blurs the distinction between internal lawmaking and external policy prescription, challenging conventional understandings of sovereignty, which are grounded in institutional autonomy and territorial exclusivity (Shepherd, 2024). Authority in post-crisis Sri Lanka increasingly operated through negotiated interactions between domestic institutions and transnational governance regimes rather than through singular and centralized legal orders.
However, this reconfiguration was structured by asymmetrical power relations and therefore cannot be understood as politically-neutral. A TWAIL-informed analysis highlights the disproportionate influence of the IMF in shaping the parameters of domestic reform (Sánchez & Catalán, 2024). IMF conditionalities constrain the range of legally and politically acceptable policy options by linking financial assistance to specific institutional reforms and fiscal targets (Beazer & Woo, 2016; International Monetary Fund, 2023a). The incorporation of these reforms into domestic legislation consequently reflected not only technical economic adjustment but also the reproduction of hierarchical forms of global economic governance in the country.
Therefore, the Sri Lankan case extends the existing scholarship on crisis governance and conditionality. Previous studies often conceptualize international financial intervention as an external constraint imposed on an otherwise coherent state apparatus (Westermeier, 2026). In contrast, the evidence presented here demonstrates a more complex internalization process. External governance norms were translated into domestic law, stabilized through institutional reforms, and reproduced in national regulatory structures. Thus, embedded conditionality operated as a mechanism through which transnational governance imperatives became structurally integrated into domestic legal authority.
Simultaneously, this governance configuration generates significant institutional contradictions. The expansion of executive discretion under emergency governance coexisted with the formalization of rule-based fiscal discipline associated with IMF reforms. This has created tensions between centralized crisis management and externally imposed regulatory constraints. Economic reforms framed as technocratic necessities were increasingly insulated from ordinary democratic deliberation, raising broader questions concerning accountability, constitutional balance, and the legitimacy of crisis governance in the long run.
Taken together, these findings address the first research question by demonstrating that the 2022 crisis reconfigured legal authority through layered institutional restructuring rather than through a straightforward erosion of state power. Authority was redistributed across executive institutions, fiscal governance frameworks, and transnational regulatory regimes, producing a fragmented but operationally coordinated governance structure. Therefore, the Sri Lankan case supports the article’s broader argument that sovereignty in crisis-affected contexts is best understood not as a fixed territorial monopoly but as a relational and internally differentiated configuration shaped by interactions between domestic legal adaptation and global regulatory integration.

3.2. Legal Pluralism as Strategic Governance: Negotiating Authority across Formal and Informal Orders 
The second analytical pattern demonstrates that legal pluralism in Sri Lanka functions not merely as a residual feature of postcolonial institutional hybridity but as an actively utilized mode of governance in times of crisis. During the post-2022 restructuring period, state officials, local administrators, community authorities, and affected populations increasingly relied on overlapping legal and normative frameworks, including statutory law, administrative discretion, customary dispute resolution mechanisms, and informal mediation practices, to manage governance pressures generated by fiscal austerity and institutional disruption (Musmuliadin et al., 2024). These practices became particularly significant in areas such as land governance, welfare allocation, local dispute settlement, and access to public resources, where formal institutional capacity was strained and bureaucratic procedures were often unable to respond effectively to rapidly changing socioeconomic conditions.
The strategic use of legal pluralism is especially visible in land and community dispute governance in Indonesia. Sri Lanka’s legal system has historically combined statutory law with customary and religious legal traditions, including Kandyan law, Thesavalamai law, Muslim personal law, and localized mediation mechanisms (Schonthal, 2022). During the crisis period, these plural legal arrangements became increasingly operational in terms of dispute management. For example, mediation boards and community-based settlement practices continue to resolve a substantial proportion of minor civil and interpersonal disputes outside formal court structures. Available institutional data indicate that Sri Lanka’s Mediation Boards Commission has historically resolved approximately 60–65 percent of referred disputes through informal settlement mechanisms without escalation to formal litigation (Niriella, 2016; Wijayatilake, 2023). Although these figures are not limited exclusively to the post-2022 crisis period, they demonstrate the longstanding operational significance of informal and semi-formal dispute resolution mechanisms within the Sri Lankan legal order. Under crisis conditions characterized by court delays, administrative strain, and fiscal constraints, reliance on such mechanisms has become increasingly important for maintaining governance continuity at the local level.
Similarly, in welfare administration and subsidy allocation, codified eligibility criteria frequently interact with discretionary administrative practices. Local officials often exercised a flexible interpretation of formal regulations when distributing fuel allowances, social assistance, and emergency relief resources during periods of acute scarcity. These governance practices reflect both institutional necessity and localized political negotiations. Legal pluralism therefore operates not at the margins of governance but within its everyday institutional functioning (McCabe & Nank, 2018).
Empirically, this pattern can be understood through three interrelated mechanisms: forum selection, normative switching and jurisdictional layering. First, actors engaged in forum selection by navigating between formal courts, mediation boards, administrative authorities, and community-level dispute mechanisms to identify decision-making arenas that are perceived as more accessible, efficient, or politically advantageous. Second, normative switching occurred when actors strategically invoked different legal or normative frameworks, statutory rules, customary principles, religious norms, or administrative discretion depending on contextual objectives and institutional constraints. Third, jurisdictional layering emerged through the coexistence of overlapping legal authorities that enabled disputes and governance responsibilities to move across multiple institutional sites rather than remaining confined within a single legal hierarchy (Gómez-Mera, 2016).
These mechanisms collectively demonstrate that legal pluralism under crisis conditions was not an accidental institutional residue but rather a structured governance strategy. The economic crisis intensified bureaucratic incapacity, delayed formal adjudication processes, and constrained administrative resources. In response, both state and non-state actors increasingly relied on flexible and overlapping normative arrangements to preserve institutional functionality. Legal multiplicity thus became instrumentally valuable because it allowed governance actors to adapt to fiscal austerity and externally conditioned reform pressures without fully abandoning localized administrative responsiveness to them.
Consequently, the Sri Lankan case extends existing legal pluralism scholarship by foregrounding the strategic and hierarchical dimensions of normative multiplicity. Classical legal pluralism literature often emphasizes coexistence, social legitimacy, and normative diversity within plural legal orders (Schonthal, 2022). However, the findings indicate that pluralism during periods of crisis is also structured by institutional incentives, power asymmetries, and governance objectives. State actors retain the capacity to selectively activate, prioritize, or suppress particular normative frameworks depending on their compatibility with broader crisis-management priorities and externally conditioned fiscal reforms. Legal pluralism therefore operated not only as a sociological condition but also as a governance technique through which authority could be redistributed, negotiated and partially obscured.
This interpretation advances recent political economy approaches to legal pluralism by demonstrating how crisis conditions intensify the instrumental deployment of normative diversity (Griffiths, 2015; Swenson, 2018). Under economic restructuring, the distinction between formal and informal governance has become increasingly porous. Statutory and customary frameworks were not functionally separate systems but rather interconnected mechanisms selectively mobilized to manage institutional pressures and resource scarcity. Consequently, the boundaries between legality, discretion, and informal negotiation became more fluid during the post-crisis governance period.
Simultaneously, this governance configuration generates significant tensions with rule-of-law principles. The selective invocation of different legal frameworks reduces the consistency, predictability, and transparency of legal outcomes, contributing to what may be conceptualized as institutional opacity (Reinisch, 2023). Decision-making increasingly depends on contextual negotiation, positional authority, and administrative discretion rather than uniformly applied legal standards. While this flexibility enhanced adaptive governance capacity under crisis conditions, it also produced uneven access to legal protection and reinforced existing social and political inequality.
From a TWAIL-informed perspective, the strategic deployment of legal pluralism can be interpreted as a localized response to the asymmetrical structures of global economic governance (Sánchez & Catalán, 2024). Externally imposed fiscal discipline and IMF-linked reform requirements constrained domestic policy flexibility at the macroeconomic level in Pakistan. In response, local administrative actors relied on plural legal practices to preserve limited forms of institutional adaptability and socioeconomic responsiveness within communities affected by austerity measures. This did not constitute resistance in a transformative sense; rather, it represented a negotiated accommodation between global regulatory demands and local governance realities.
Importantly, these dynamics generated further contradictions in the post-crisis legal order. Formal governance reforms increasingly reflect standardized regulatory principles associated with international financial governance, including fiscal discipline, transparency, and rule-based administration. However, implementation frequently depends on flexible local practices and discretionary institutional adaptation (International Monetary Fund, 2023a). This has widened the gap between formal legal rationality and operational governance realities, complicating both institutional coherence and democratic accountability.
Taken together, these findings demonstrate that the reconfiguration of legal authority in post-crisis Sri Lanka extended beyond formal institutional restructuring into the everyday practices through which governance was actualized. Legal pluralism functions simultaneously as an adaptive governance mechanism and as a structural condition that reproduces fragmented authority across overlapping institutional domains. By identifying the mechanisms through which normative multiplicity is strategically mobilized, the analysis further develops the article’s concept of fragmented sovereignty, showing that fragmentation is sustained not only through formal legal reforms but also through routine governance practices that mediate relations between state institutions, local actors, and transnational regulatory pressures.

3.3. Fragmented Sovereignty as a Structurally Embedded Governance Configuration 
The third and cumulative finding consolidates the preceding analyses by demonstrating that post-crisis governance in Sri Lanka is most accurately conceptualized as a condition of structurally embedded, fragmented sovereignty. This condition is not reducible to institutional weakness or transitional instability; rather, it reflects the consolidation of a governance configuration in which multiple, partially overlapping authority structures operate within a single, yet internally differentiated, legal space. Empirically, this configuration is produced through the interaction of three previously identified mechanisms: executive consolidation, embedded conditionality, and strategic deployment of legal pluralism. These mechanisms generate a system in which executive-driven fiscal governance, internationally conditioned regulatory frameworks, and locally mediated normative orders exercise domain-specific authority while remaining functionally interdependent on each other. The resulting structure is neither hierarchically unified nor fully disaggregated but is organized through a layered and relational architecture in which jurisdictional boundaries are fluid and continuously renegotiated (Gómez-Mera, 2016; Young, 2015). Figure 2 presents the integrated governance configuration produced by the interacting mechanisms of fragmentation.

Figure 2. Structurally Embedded Fragmented Sovereignty

Source: Author’s illustration (2026)

This structural embedding is particularly evident in the routinization of crisis-era legal and policy mechanisms. Measures initially justified as exceptional, such as expanded executive discretion in fiscal decision-making, externally aligned regulatory benchmarks, and flexible enforcement practices, have increasingly become institutionalized within Sri Lanka’s post-crisis governance architecture. For example, IMF-linked fiscal consolidation targets continued to shape budgetary policy beyond the immediate stabilization phase, including the continued enforcement of increased VAT rates and revenue expansion measures introduced after 2022. Similarly, the Central Bank of Sri Lanka Act No. 16 of 2023 formalized enhanced institutional independence and inflation-targeting mandates, embedding externally aligned monetary governance principles within domestic law on a long-term basis (Central Bank of Sri Lanka, 2023; Government of Sri Lanka, 2023). Anti-corruption monitoring frameworks and public financial management reforms associated with IMF restructuring agreements have also been incorporated into routine administrative oversight mechanisms rather than remaining temporary crisis-response instruments (International Monetary Fund, 2024). Legislative reforms, fiscal rules, and administrative practices increasingly reflect an enduring accommodation between domestic legal frameworks and transnational governance imperatives, particularly those associated with IMF conditionalities (Beazer & Woo, 2016; International Monetary Fund, 2024; Westermeier, 2026). This normalization process transforms fragmentation from a contingent response to crises into a durable and self-reinforcing feature of governance. Rather than indicating a transition toward institutional recovery or recentralization, the evidence suggests the consolidation of a hybridized legal order in which fragmentation is constitutive of how authority is organized and exercised in the Russian state.
Theoretically, this finding necessitates a departure from the monolithic concept of sovereignty. Classical frameworks, grounded in assumptions of centralized authority and territorial exclusivity, cannot account for the coexistence of multiple, interacting loci of governance (Stirk, 2012; Tóth, 2023). Simultaneously, purely transnational or global governance approaches risk overstating the displacement of domestic authority by external actors (Fioretos & Tallberg, 2021). In contrast, the Sri Lankan case reveals a relational configuration in which sovereignty is continuously reconstituted through the interaction of domestic institutional practices and transnational regulatory pressures (Shepherd, 2024). In this context, the integration of legal pluralism with critical sovereignty theory is analytically essential. Legal pluralism accounts for the multiplicity and interaction of normative orders (Griffiths, 2015; Swenson, 2018), whereas critical sovereignty theory captures the contingent, negotiated, and processual nature of authority across these orders (Kenney‐Lazar, 2020). Thus, fragmented sovereignty emerges as a structured condition produced through the convergence of internal differentiation and external constraints, rather than as a residual or transitional phenomenon.
However, the institutionalization of fragmented sovereignty generates persistent and structurally embedded contradictions. A central tension arises from the coexistence of rule-based regulatory frameworks, often aligned with international financial standards, and discretionary, context-sensitive practices at the administrative and local levels. Fiscal reforms, for instance, emphasize transparency, predictability, and compliance with externally defined benchmarks; however, their implementation frequently depends on flexible interpretation, negotiated adjustment, and institutional discretion (Gomez-Gonzalez et al., 2024; Kelemen, 2015). This produces a disjuncture between formal legality and operational practice, wherein compliance is simultaneously codified and contingent. Such contradictions are not incidental but are constitutive of the governance configuration itself, reflecting the difficulty of reconciling standardized global norms with heterogeneous domestic institutional realities.
These dynamics generate identifiable governance gaps in the literature. Coordination across different layers of authority remains uneven as institutional actors operate under divergent mandates, temporalities, and accountability structures. Regulatory inconsistencies arise when overlapping jurisdictions produce competing interpretations of legal obligations, particularly in domains where fiscal reform intersects with social policy and resource allocation (Kreuder-Sonnen & Zürn, 2020). Accountability deficits are further exacerbated by the diffusion of authority across multiple sites, rendering the responsibility for decision-making difficult to attribute. This diffusion complicates both legal enforcement and the mechanisms of democratic oversight, raising fundamental questions regarding the legitimacy and transparency of governance in post-crisis contexts.
Engagement with existing scholarship indicates that this configuration cannot be adequately captured by state-centric analyses focused on institutional capacity or by transnational frameworks that privilege external control. Instead, the findings support a relational and process-oriented understanding of sovereignty, in which authority is continuously produced through interaction, negotiation, and adaptation across governance scales (Young, 2015). By demonstrating how fragmentation operates as a structured and enduring mode of governance, this analysis advances a reconceptualization of sovereignty as a dynamic and internally differentiated assemblage rather than a fixed attribute of the state. In doing so, it moves beyond the binary frameworks of sovereignty versus dependency, offering a more granular account of how authority is organized under conditions of crisis.
Importantly, this reconceptualization has implications beyond the Sri Lankan case. This suggests that in the context of economic crises and external intervention, fragmentation may function as a pragmatic mechanism through which states navigate competing pressures without fully relinquishing authority. However, this functionality is accompanied by significant normative trade-offs, including reduced transparency, uneven access to legal protection and constrained avenues for accountability. These trade-offs underscore the ambivalent character of fragmented sovereignty: while it enables adaptive governance under conditions of constraint, it simultaneously entrenches structural inequalities and institutional ambiguities (Kupriyanov, 2024). Table 2 synthesizes the structural implications of fragmented sovereignty for governance.

Table 2. Governance Implications of Fragmented Sovereignty

Source: Author’s synthesis (2026)

In direct relation to the research questions, this subsection demonstrates that the 2022 economic crisis precipitated not only a redistribution but also an institutionalization of fragmented legal authority. The interaction between legal pluralism and transnational governance has produced a multilayered system in which authority is dispersed yet operationally coordinated through structured mechanisms. This configuration provides a concrete empirical foundation for this article’s central argument: sovereignty in post-crisis contexts is best understood as a contingent and relational construct constituted through the interplay of domestic legal adaptation and global regulatory integration. By addressing the identified theoretical gap, the analysis advances a more precise framework for understanding governance transformations in the Global South under conditions of economic vulnerability and external constraints.

This article argues that the 2022 economic crisis in Sri Lanka did not simply weaken state authority but reorganized it through a structurally embedded condition of fragmented sovereignty. The empirical analysis demonstrates that post-crisis governance emerged through the interaction of three interconnected mechanisms: executive consolidation under emergency governance, institutional embedding of IMF-linked conditionalities, and strategic deployment of legal pluralism within administrative and local governance practices. Together, these processes redistributed authority across overlapping domestic and transnational institutional domains, producing a governance configuration in which sovereignty operated through differentiated and relational structures rather than through a singular and territorially unified state apparatus.
The article’s central theoretical contribution lies in developing fragmented sovereignty as a mid-range analytical framework for understanding how authority is reorganized under the conditions of crisis-driven restructuring. Fragmented sovereignty refers not only to weakened state capacity or external dependency but also to the structured dispersion of legal and political authority across partially overlapping governance sites that remain functionally interconnected. The Sri Lankan case demonstrates that sovereignty under crisis conditions is not displaced by transnational governance; rather, it is reconstituted through layered interactions between domestic institutional adaptation and externally embedded regulatory frameworks.
Importantly, the findings clarify the scope conditions under which the fragmented sovereignty framework is most analytically applicable. The framework is particularly relevant in contexts characterized by the convergence of four structural conditions: severe fiscal crisis or sovereign default; intensive engagement with external financial governance institutions such as the IMF; pre-existing legal pluralism or institutional hybridity; and expanded executive governance justified through emergency or exceptional measures. Therefore, fragmented sovereignty is not intended as a universal description of all crisis governance arrangements. Its explanatory value is strongest in postcolonial or institutionally differentiated states, where external economic restructuring intersects with internally plural legal orders and uneven administrative capacity. In highly centralized states with limited normative pluralism or in supranational governance systems, such as the European Union, where institutional authority is more formally integrated, the mechanisms identified in this study may operate differently or with reduced intensity.
This study further contributes to legal pluralism and sovereignty scholarship by demonstrating that legal multiplicity under crisis conditions functions not only as a sociological reality but also as a strategic governance mechanism. State actors selectively mobilize formal and informal legal orders to manage fiscal austerity, institutional constraints, and externally imposed reform pressure. This finding refines conventional legal pluralism theory by foregrounding its hierarchical and politically instrumental dimensions, while also extending critical sovereignty scholarship through an empirically grounded account of how authority becomes internally differentiated under the pressure of transnational economic forces.
Beyond its theoretical implications, the analysis has important policy consequences. The findings suggest that externally conditioned crisis governance frameworks should incorporate stronger institutional safeguards to prevent the excessive concentration of executive authority and erosion of democratic accountability during restructuring periods. Therefore, international financial institutions and domestic policymakers should prioritize three institutional considerations in future crisis management frameworks. First, fiscal and regulatory reforms should be accompanied by stronger parliamentary oversight and judicial review mechanisms to reduce the insulation of economic governance from the scrutiny of democracy. Second, crisis response legislation should include clearer temporal limitations and accountability provisions governing the use of emergency powers. Third, reform programs should account for the operational realities of plural legal systems, rather than assuming uniform institutional implementation capacity across all governance levels. Failure to address these issues risks deepening regulatory inconsistency, institutional opacity, and uneven access to legal protections.
Nevertheless, this study is subject to several limitations. Its reliance on publicly available legal and institutional materials restricts access to informal negotiations and internal decision-making processes that may shape the governance outcomes. In addition, the single-case design limits direct empirical comparisons across jurisdictions. However, the objective of the analysis was theoretical refinement rather than statistical generalization. Sri Lanka functions as a theoretically revealing case through which broader transformations in sovereignty and governance can be examined under conditions of economic crisis and external intervention.
Therefore, future research should move beyond broad comparative inquiries toward a more specific investigation of the mechanisms identified in this study. Three directions are particularly important. First, comparative research should examine whether embedded conditionality produces similar forms of authority redistribution in other post-colonial debt-crisis contexts such as Pakistan, Lebanon, and Zambia. Second, future studies should investigate how fragmented sovereignty affects long-term democratic legitimacy, especially whether prolonged reliance on externally embedded fiscal governance contributes to the depoliticization of economic policymaking. Third, additional socio-legal research is needed to examine how citizens and local institutions navigate overlapping formal and informal governance systems during periods of austerity and administrative fragmentation. These questions are essential for understanding whether fragmented sovereignty functions primarily as a stabilizing adaptive mechanism or whether it ultimately entrenches institutional incoherence and governance inequality.
Ultimately, the Sri Lankan case illustrates a broader transformation in contemporary governance in the Global South. Sovereignty in crisis-affected states is not disappearing; it is being reorganized through layered, relational, and internally differentiated forms of authority shaped by the interactions between domestic institutional adaptation and transnational economic governance. Recognizing this transformation is necessary for developing more precise theoretical approaches to sovereignty, legal pluralism, and crisis governance in an era that is increasingly defined by debt restructuring, economic volatility, and asymmetrical global regulatory power.