This study seeks to examine the economic dimensions of political conflicts in developing countries and it provides a conceptual framework to explain the emergence of political conflicts in the context of economic change. It looks at the trends and the links between war, political conflicts and the economic features of developing nations and the conventional approaches to the subject and discusses political conflicts in different social-structures. The nature of developing countries and development are examined extensively and Sri Lanka’s political conflict is discussed in the context of its welfare democracy. This publication looks at the trends in Sri Lanka, such as the escalating conflict, the growth of a competitive society, and the decline in economic prosperity. While the economic crisis in Sri Lanka and its social implications are discussed in the study, the role played by ethnicity, scarcity, education and class are also explored. This study also looks into state interventions to equalise existing disparities. Finally, the study’s conclusions focus on the theoretical framework and the concept of political conflicts especially in relation to Sri Lanka’s economy and political conflicts.