A failed state or a middle-income country?

Kedar Neupane

Kedar Neupane

A failed state or a middle-income country?

Political interference, financial mismanagement, and the lack of accountability toward public spending on the part of decision-makers have contributed to the conflict of interest across all three branches of governance and created a fertile ground for corruption. Government officials and political leaders with conflicting interests such as personal gain or loyalty to certain groups or individuals are more likely to engage in corrupt practices, such as bribery or nepotism. Such a situation leads to policies and decisions that serve the interests of decision-makers rather than the public good and/or policies and decisions that favor the commoner. This leads to erosion of public trust in government institutions under political patronage. As a result, they cannot function autonomously for the public good, leading to morally unjust behavior, political instability, and unrest.

Addressing both the causes of conflict of interest and effects of corruption in governance is crucial for promoting transparency, accountability, good governance and community welfare. This requires robust combating measures like anti-graft and corrupt practices and red-tape laws, independent oversight and enforcement mechanisms, and transparency in decision-making processes.

Factors behind unabated graft 

Several factors are contributing to corruption in state bureaucracy in Nepal, major ones being political interference, inefficient bureaucracy, fiscal abuse, ineffective parliamentarians, and the subservient nature of bureaucrats. Politicians using their powers to influence bureaucratic decisions or engaging in patronage networks to advance their own interests is all too common. This is exemplified by the appointment of unqualified or corrupt officials, and the misuse of public resources for personal gain.

Inefficient and inept bureaucracy enhances state corruption, as bureaucratic processes become slow and less transparent, opaque even, to most people. This concomitantly creates opportunities for officials and intermediaries to demand bribes or engage in graft and other corrupt practices to manipulate decision-making processes.

The subservient nature of bureaucrats in Nepal is also abetting corruption. In many cases, bureaucrats may be serving the interests of political leaders or senior officials, helping create and promote a culture of deference and obedience, where officials prioritize loyalty to their superiors over their duties to the public.

Civil Service cadres in Nepal are influential because of unionization along political party lines and patronage networks. In such an environment, bureaucratic appointments and transfers, which often come at the expense of merit-based appointments and transfers, promote a culture of favoritism and political loyalty, thereby consolidating power and rewarding supporters. This is one of the major problems that has wreaked the civil service in Nepal and rendered the system of governance almost dysfunctional, failing even to deliver public goods to the commoner.

Corruption in governance calls for combat measures that increase transparency, accountability, and professionalism. Also, an effective fight against corruption requires a long-term process accompanied by sustained efforts and commitment from all stakeholders.

Measures to fight graft:

Nepal needs measures like strong legislations, rules and regulations that deal with the root causes of the conflict of interest and the operating environment that fosters corruption. Anti-graft and anti-red tape laws, promotion of transparency and accountability and measures that build public trust in government institutions can go a long way. Below are some measures that can help curb political, financial, and judicial corruption:

Anti-graft laws and strong legal institutions: Nepal needs a robust legal framework that criminalizes corruption and awards harsh penalties to those found guilty. The government must enforce these laws strictly and impartially. For this, Nepal needs strong Anti-Graft and Corrupt Practices and Anti-Red Tape Laws that can play a crucial role in the fight against corruption. Laws should be applied across all segments of the society and institutions to punish the corrupt without exceptions and to reduce possible conflicts of interest. Effective implementation of Anti-Graft and Corrupt Practices and Anti-Red-Tape Laws will require autonomous Anti-Corruption Commission (ACC) and the Commission for the Investigation of Abuse of Authority (CIAA). They need to be strengthened to ensure their independence, impartiality, and effectiveness. Anti-corruption agencies should be given sufficient legal powers, resources, and authority to investigate and prosecute graft and other corrupt practices as this move can play a vital role in dealing with this cancer in governance. Senior officials tasked with running this institution must be selected on merit basis. The candidates should have impeccable track records along with relevant work experience as well as a non-political background. 

The selection process must include open discussions on the candidates, and a public voting process for picking the candidates with stakeholders like representatives of civil society organizations as voters.  

Increasing transparency and accountability: Nepal needs to promote transparency and accountability in its governance processes, including public procurement, budgeting (not only as a yearly event without open debate), and accountable fiscal management. Transparency and accountability are key to fighting corruption. Nepal can increase transparency by making government processes, budgets, and transactions publicly available and accessible. The government should implement a system of performance auditing and measures to ensure that public officials are held accountable for their action as well as inaction. For this purpose, laws should be enacted to safeguard the freedom of information, and programs launched with the citizens’ participation to promote inclusive governance and transparency by following international best practices. This must precede with the audit of “Beruzu” (yearly arrears amounting to billions of rupees in Nepal) accounts and a performance auditing system for financial accountability.

Enhancing public awareness: Encouraging citizens’ participation in decision-making process and creating channels for feedback and grievance redressal can help prevent corruption. Educating the public about harms of corruption, identifying and reporting the instances of corruption will be equally crucial. These measures can play an important role in the fight against corruption. The government, civil society organizations, and the free media can play a key role in raising awareness and promoting a culture of zero-tolerance toward corruption.

Strengthening judicial independence: Judicial independence is critical in any democracy for ensuring the rule of law and fighting corruption. Selection of judges should be transparent, and on merit basis, and appointees must have relevant work experience with impeccable track records. The candidates should be non-partisan; they should have no political affiliation whatsoever. The government should take measures to ensure that the judiciary is free and independent and capable of providing fair and impartial justice.

Strengthening bureaucracy: The bureaucracy can play a crucial role in the fight against corruption. No single institution can stop corruption on its own. It requires a collaborative effort from all segments of society to create a corruption-free Nepal. The bureaucracy in Nepal needs to be strengthened with competent and well-trained staff by making sure that they are adequately compensated financially and protected from political interference. A merit-based recruitment system will help reduce corruption in recruitment and promotion processes.

Whistleblower protection mechanism: Raising awareness among employees and civil society organizations about the impact of corruption on the society and promoting civic education can go a long way in building a culture of accountability and transparency. Whistleblowers can play a vital role in exposing corruption. Nepal should put a mechanism in place to protect whistleblowers from retaliation and ensure their anonymity.

Implementing e-governance: e-governance can help reduce corruption by increasing transparency, reducing human interaction, and improving efficiency. Nepal should invest in e-governance infrastructure to ensure that government processes are streamlined, and corruption is minimized. This should start with reforming the government procurement process with a focus on quality, timely delivery, and sustainability rather than cost-effectiveness.

Strengthening party finance regulations: Political parties are often the leading source of conflict of interest and cause of corruption. Nepal should strengthen regulations around political party finance, intra-party consultation process, and electoral system reform to ensure inclusivity and transparency in their deliberations and management of party affairs, funding, finances, and abide by the culture of ethics in democratic functioning of political party.


Toward a failed state?

The parliamentary system of governance has failed to deliver on people’s expectations of sustainable economic development due to conflicts of interest in the system of governance. Governance operating modules and instruments appear to have been favorable to elected officials seeking to fulfill vested personal interests vis-a-vis power, financial gains, etc. Apparently, the officials prioritize their own interests over those of the constituency and the nation they are supposed to represent. There have been several instances of conflict of interest among parliamentarians and decision makers representing the state organs. Long-term implications of such dismal performance of the governance system in this republic are hard to predict. For one thing, this inefficient system will have a negative bearing on the commoner’s aspirations for prosperity and progress. Performances of successive governments seem to indicate that this nation might become a failed state of the 21st century, instead of graduating to the club of middle-income countries as a sustainable economy in the coming years.

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