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Understanding Local Governance in Nepal


After the dusk of World war II, the developing societies were besieged with a range of problems in public management, precisely for the dysfunctional administration, cursed bureaucracy, disordered institutions and functional complexity in delivery. This nuisance in governance led to the emergence of idea of state-centrism and the concentration of administrative and legislative powers in the central government. Such structural approaches, however, institutionalized corruption, cronyism and political interference. In the 1980s, reform and revitalization of this centralized approach were deeply felt, and, therefore, a consensus developed to widen the government space by shifting the emphasis from state control to alternative partners, such as the market, private domains, institutions and non-state actors. This was a shift from centripetal use of power to centrifugal distribution, an expansion in the realm of governance, and an overwhelming rise of the ‘third sector’, which we call decentralization. With the eradication of hitherto demarcations between the public and private domains, multiple actors could now contribute their ideas, knowledge and resources to change governance, in a pluralist setting at a local level, from being state-centric to society-directed.

In the context of Nepal, the local level administration itself went through three phases: centralization in the Panchayat era until 1990, bureaucratization from 2002 to 2017 and decentralization via LGA 2017. In the first phase, the idea of the village as the fundamental unit cherished King at the centre and people in the periphery. This was the ruination of Nepal, as this was an abuse of individual sovereignty, and not only the Panchayats abstained distribution and utilization of skills and resources for the welfare of the people, but also played a vital role in the conservation and ratification of social ills, such as gender, caste and age-based stratifications. After the People’s Revolution of 1990, democracy was restrained and the liberal approach towards governance generated space for decentralization and a ‘one people one value’ system. In the second phase, after the first tenure of Local bodies turned our after 1997 elections, their powers were ceded to bureaucrats, who were to fail at all dimensions of governance thereafter. Today, after the Social Revolution of 2008, we are in the third phase, where the Constitution of Nepal has granted 22 exclusive powers and 15 concurrent powers to local bodies and also developed legislative, executive and judicial power to it. This idea of self-sustainable, inclusive representation at local levels is a direct product of apathetic and unaccountable bureaucratic behavior and alienation of remote areas from the center in the past. This is a move from conventional public administration to new public management paradigm.

The 22 exclusive powers and 15 concurrent powers enshrined in the Constitution of Nepal and the legislative, executive and quasi-judiciary powers materialized in the Local Government Act (LGOA) 2017 make local governments more responsive and participatory, such that the power devolution creates fair competition and amplifies democratic practices at the grassroot level. The local government is the combination of municipal board, executive board and judicial committee, which has to acknowledge five thematic sectors, such as economic development, social development, physical infrastructure development, forest development and disaster management, and institutional development. The budget itself is categorized into these aspects, with procedural planning, in accordance with revenue projection and budget ceiling, in a strict timeline. The budget allocation, by the federal government, is based on the administrative area, population, human development index and development indicator in ratio of 15%, 70%, 5% and 10% respectively. The center has been certainly positive about the LGs, as there has been exponential rise in budget allocation – that is, from $2 Bn in fiscal year 2016/17 to $6Bn in the following year, which is after implementation of federalization.

The institutionalization of such closet and trustworthy local government first involves consensus that demanded greater political representation over majoritarian rule – that is, local democracy over democratic centralism. The seven-party alliance, which concluded the 2nd People’s Revolution in Nepal, had certainly built a broad coalition to cooperate with other elites and to exclude the anti-democratic forces from the status quo. This was the primogenitor of idea of decentralization, nay the dissemination of power from ‘bureaucratic elites’ to the ‘society’ itself. In other words, the people’s uprising in 2006/7 brought new challenges to the existing system in the sources of authority, their purposes to serve the people and mechanisms for constituting the government. Hence, the emergence of local government, as opposed to the previous local units, can be seen as a dynamic process to equalize power and authority for the separate needs and demands at the bottom level.

So, LGs as such has become an organization rather than a mere institution. While institutions are mechanisms for maintaining socio-economic order and governing the society with respect to the social dynamics, organizations are governmental structures that accelerate the supply of social needs and justice. A great economist and Nobel laureate, Douglass C. North, in a brilliant deduction once said that “institutions are the rule of the game and organizations are the players.” Institutions, both formal and informal, are fundamentally the product of social dynamics, but organizations are the mediums of institutional change. Therefore, the LGs prioritize as well as succor people’s participation in collective actions, advocate social-well-being and generate solidarity opposed to the hitherto inefficient technocratic local body. In other words, the new local bodies are amalgamation of what Michael Foucault called “government and rationalism.” This paradigm shift of third layer of government from local body to local organization is, in fact, a shift from government to governmentality.


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