Ecological capacity in water-stressed Somalia under globalization, institutional change and human capital development

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This study empirically examines the determinants of ecological sustainability in Somalia by analysing the relationships among globalization, water stress, institutional quality, and human capital using annual data from 1990 to 2020. The Load Capacity Factor (LCF), which captures the balance between biocapacity and ecological demand, is employed as the principal measure of ecological sustainability. ARDL bounds testing is used to assess cointegration, while Fully Modified Ordinary Least Squares (FMOLS) and Dynamic Ordinary Least Squares (DOLS) validate the long-run estimates, and the Toda–Yamamoto procedure examines predictive causality. The results indicate that globalization reduces Somalia’s LCF in both the short and long run, whereas water stress has a significant adverse effect in the long run. Conversely, institutional quality, proxied by the ICRG Government Stability indicator, and human capital, represented by the population of official secondary-school age for both sexes, have positive and statistically significant long-run associations with the LCF. The causality results further show that globalization, water stress, institutional quality, and human capital predict changes in the LCF, while feedback from the LCF is primarily observed toward globalization. Overall, Somalia’s ecological sustainability is constrained by water stress, institutional fragility, and environmentally unsustainable forms of global integration. The findings support a sequenced policy agenda that reconciles globalization with environmental stewardship, strengthens water-resource governance, promotes institutional development, and expands investment in human-capital formation.