Institutional drivers of public sector resilience: Governance capacity, fiscal investment, and demographic pressure in South Asia

Public sector resilience has become a central policy concern in South Asia as governments face overlapping health, fiscal, environmental, and demographic pressures. This study examines how governance capacity, public health expenditure, and demographic pressure shape institutional resilience outcomes across eight South Asian countries from 2010 to 2023. Resilience is measured through a Composite Resilience Index that combines normalized political stability, human development, and environmental performance indicators; the index is treated as an observable institutional-resilience outcome composite rather than as a complete measure of internal administrative capability. To address measurement and weighting concerns, the study reports equal-weighted and PCA-weighted versions of the index, component loadings, temporal stability checks, country rankings, and sensitivity analysis excluding governance-overlapping components. Using a tiered macro-panel strategy based on two-way fixed effects, interaction models, Driscoll-Kraay and PCSE corrections, dynamic persistence checks, and fixed-effects instrumental-variable estimation, the findings show that governance capacity and public health expenditure are positively associated with resilience, whereas demographic pressure has a negative direct effect and weakens the returns to both governance and fiscal interventions. The study contributes to resilience scholarship by clarifying composite measurement, reducing common-source concerns, and demonstrating that institutional reforms are conditionally effective under demographic stress. The findings support policies that integrate digital governance reform, resilience-oriented budgeting, accountability mechanisms, and demographic planning in South Asia.