Areas of Work

State restructuring and Governance

Nepal’s new constitution has greatly expanded the rights and jurisdictions of local government bodies.  However, challenges remain in building the capacities of local governments to carry out their new duties, and in coordinating with federal and provincial-level governments to ensure cooperation across the three tiers of government. For example, the success of local governments will depend to a large extent on adequate funding from the center, through mechanisms such as the intergovernmental fiscal transfer system and National Natural Resources and Finance Commission. There is therefore a need to collaborate with the National Natural Resources and Finance Commission to enable a just and fair outcome for all governments, in particular local governments.

Security sector reform

Despite the promulgation of a new constitution that dramatically decentralizes government responsibilities in Nepal, the nation’s security apparatuses remain highly insular and centralized.   Security sector policies, and relationships between law-and-order agencies and the military, are still evolving within the new federal context. Certain security services may be devolved, whereas others cannot be. For example, the federal government will need to coordinate with provinces and municipalities on certain issues but will need to take the lead on others like terrorism, insurgencies, trafficking, industrial espionage, IT crime, and issues pertaining to the open border with India.  Determining which security issues which will be handled by which level of government, and how the levels will cooperate, is of high priority and is a prerequisite to technical assistance.

Infrastructure Development (water, energy, and hydropower)

Infrastructure policy considerations in Nepal mainly pertain to access (i.e. roads) and energy (i.e. hydropower).  While Nepal’s road network is expanding dramatically, energy supplies are not. Nepal has a current installed capacity of just over 1,000 MW, compared to an estimated potential of over 40,000 MW.  Without a corresponding increase in energy availability, increased access has not translated into broad-based economic growth. A study by the Government of Nepal in 2014 identified inadequate electricity supply as one of four key constraints to growth; energy availability could help spur industrial activity and provide important government revenue from electricity sales.

Historically, analysis and planning in the water resources sector has focused on technology. However, overcoming barriers to hydropower development will require more careful analysis and planning from a political-economic perspective, taking into consideration macroeconomic and geopolitical issues.   Clearer and more effective policy frameworks are necessary for harnessing large-scale investment in hydropower. Consideration of other uses of, and issues pertaining to rivers – such as irrigation and flood control – are also needed. Niti Foundation provides advisory services and convenes myriad interest groups to facilitate collaborative problem-solving in the field of energy infrastructure development and investment.

Combating Corruption and Impunity

Corruption and impunity are closely intertwined issues – each contributes to the other – and they are serious constraints to policy reform and effective performance across all of the Nepali government.  Corruption and impunity have become institutionalized within the Nepali state over decades by politicians and bureaucrats seeking personal enrichment and control over institutions. They have become legitimized through cultures of collusion across society at large.

As Nepal transitions to a new federal system, there is frequent confusion due to a lack of norms and guidance, creating a serious risk for redistribution or re-entrenchment of corruption.   At the same time, a great deal of resistance to change within political parties and the bureaucracies can be linked to a reluctance to disturb long-established kleptocratic networks. Any work on accountability in the public policy sphere requires attentiveness to reducing discretionary space and informal arrangements in public administration.

Addressing Marginalization and Vulnerability

Along with a friendly business environment and strong labor institutions, social security and protection systems are critical for alleviating poverty and enhancing the living standards of society at large.  To date, Nepal has incorporated a variety of such programs, but in a fragmented manner. Following the Comprehensive Peace Accord of 2006, all political parties committed to promote marginalized groups’ access to government services, and successive governments have introduced populist social protection programs for the poor and vulnerable. It is estimated that around 70 programs now exist; most are versions of cash transfer programs for the elderly, women, children, and other groups.  While these programs are popular, it is unclear how well they correspond to government priorities – e.g. the 32 fundamental rights enshrined in the new constitution – and how well they are integrated with development assistance planning. Critically, the cost to the government of all these programs is also unclear. Analysis is needed to map the various schemes and their costs, and to develop a more coherent social protection policy and related legal/ regulatory framework.

While social protection programs help address certain types of vulnerability, other policies are needed for novel, episodic or geopolitical types of vulnerability. Nepal’s perennial susceptibility to disaster, for example, is a difficult policy issue because disasters magnify other pre-existing vulnerabilities. The country’s dependence on remittances, fuel imports, a couple of major supply roads, and a single international airport are other vulnerabilities that have national security implications as well as direct costs to the public. The government has a significant capacity gap regarding these vulnerabilities. There is a need to develop mechanisms (e.g. security advisory bodies or commissions on energy security, supply security, and so on) to focus information, analysis, and expertise to address these issues. Recently, the ruling coalition has called for forming an advisory committee under the prime minister for this purpose. However, much remains to be done from a strategic perspective.

Though the new constitution seeks to redress the historical political marginalization of certain groups, members of marginalized communities still struggle to influence public policy processes at the local, provincial, and federal levels.   Despite reserved seats for ethnic minorities, Dalits, women, Madhesis, Muslims and geographically disadvantaged populations at all three tiers of government, members of these groups still struggle to make their voices heard, in part due to political disregard for their inclusion in the restructuring process. Persistence of marginalization is likely to cause instability without mediation between aggrieved groups and the government and accompanying changes in practice.