Category Archives: governance

my experiences with the governance in Nepal and how I have dealt so far. Plus my critique on the state of affairs.

No representation without our constitution ! Goodbye!

No representation without my constitution

An open letter to 601 ex-lawmakers and your masters who failed Nepal from 30,000,000 Nepali like you and me.”

“You the 601 and the ones who you follow,
From this day, none of you, I repeat none of you, will have my representation, either in this election or ever again.

I am an alert, honest Nepali. Nepal is my country, therefore is my responsibility.  I know what is right and what is wrong.  And you all are so wrong!

You robbed 91,000,000,000, yes 91 billion rupees from nearly 30 million of us, (that is Rs 3,000 from each of us) by taking 4 years to finish a job you promised to complete in 2. In the end you gave us nothing except anguish, anger, hate, disunity and hopelessness ! Are you not ashamed at giving us such a return on our investment !

We sent you to finish making the constitution , not to turn 3 million Nepali sisters and brothers on each other. You have abused us in the name of representation. You have looted from us in the name of constitution. You have raped our trust and looted our dignity. What now remains for us ?

Answer me this. Why should we rehire you when you have proved utterly incompetent to handle? Why should we not ban you from this job forever? Yes.. that’s it. We will ban you from our conscience.

I hereby declare that you do not represent me anymore. I will do what I can, to make sure I don’t need your help anymore. I am not going to bend down to you anymore.
Until you mend your ways, I will not vote for you.

Nepali citizens are waking up as each day passes by. The critical mass of awake Nepali inch closer, uniting against your incompetence, abuse of authority, impunity and gross failures. Should you insist on ruling over us, we will gladly march to prison or the street, because under an unjust rule, the true place for a just Nepali is inside a jail or on the streets.

To see the change in Nepal, I am becoming that change. Today, I am taking that small step! From today, you have none of my representation. Enough is enough!

You are fired! Goodbye! 
A Nepali Citizen

2 reasons Foreign aid is not effective in Nepal right now

Reason 1) Foreign aid is not a very effective means of dealing with the failure of nations around the world today. Far from it. Countries need inclusive economic and political institutions to break out of the cycle of poverty. Foreign aid can typically do little in this respect, and certainly not with the way it is now organized. Recognizing the roots of world inequality and poverty is important precisely so that we do not pin our hopes on false promises. As those roots lie in institutions, foreign aid, within the framework of given institutions in recipient nations will do little to spur sustained growth. In other words giving it to the institutions that are at fault, will not help.

Reason 2) Since development of inclusive economic and political institutions is key, using the existing flows of foreign aid at least in part to help such development would be useful. Putting conditions on aid (which is what some donors do in Nepal) is not the answer, as it requires existing rulers to make concessions which they usually don’t agree or just bypass.

Instead, we should perhaps structure foreign aid so that its use and administration brings groups and leaders otherwise excluded from power into decision-making process. Here are my few suggestions.

How about using Foreign aid to:

  1. give necessary tools -trainings to empower passionate previously apathetic youths to run independent “issue based” political grassroots campaigns?
  2. help train youth leaders outside the traditional political “syndicate” to become stronger in influencing political decision-making by showing them success stories around the world?
  3. help build incubators which provides immediate resources and mentorship to fresh entrepreneurs with a passionate team, who have been excluded from such opportunities?
  4. support grassroots entrepreneurs and citizen activists thereby empowering a broad segment of population than established exclusive elite ones who are supported today?
  5. reward any political platforms and institutions that show inclusiveness and meritocracy in action?
  6. help build leadership clubs in schools in rural Nepal where transparency and accountability are taught to young students.
  7. build leadership building academy for urban educated youths interested in politics and bureaucracy.
  8. invest in practical education. Help build Entrepreneurship clubs in every high school just like libraries.
    Add your own points…..


This summary of this article is made possible through heavily borrowing and edits based on quotes from the book “Why Nations Fail” by Daron Acemoglu and James A. Robinson. The authors hold copyright to a lot of content in this article, therefore I cannot claim any right to this article. If  you consider this stealing, I apologize in advance. I only do this because their words seem to do justice than mine. If you are copying content from here, please attribute the article to the names mentioned above properly.

Thoughts on Political institutions and structures in Nepal : Summary of 7th open citizens meet-up in Kathmandu

See you tomorrow (Saturday) at 9:45 am for the 8th open meeting at GAA Thamel, Kathmandu (till 11:15 am). Here are some of the summaries of the last episode ( 7th meetup).

•There are strong links between political culture and literacy levels; with rising levels of literacy in Nepal, there is greater hope for a better system to come into place.

• Charismatic leadership circles, an enlightened mass, and a suitable political structure are needed in order for a better political culture to develop. In Nepal’s political history as well, people like B.P. Koirala, Madan Bhandari, etc. were charismatic leaders with a great vision, but they did not have an enlightened mass to support them, nor did they make an effective political structure to streamline their own governance and give their administration an efficient and transparent direction. In this sense, all these leaders who succeeded in specific historical events but failed in longer-term political processes were not successful because of the absence of a ‘good’ political structure within which to run.

• The differences between professional politicians and professionals who then get into politics is an important one. For instance, professional who already have a means to sustain themselves before and after they get into/ out of politics are more likely to be sincere, transparent, and not as entrenched in their own power-trips. On the other hand, politicians who depend almost entirely upon politics for their livelihood, professional politicians’, are more likely to be corrupt and less likely to support a fluid power structure.
A fluid power structure, with a constant (periodic) rotation of those in positions of power, is essential for a better political system and government.

• There are many institutional arrangements that can be made to make sure such fluidity of power. E.g. particular parties could make internal arrangements to make sure there is a fluid rotation of people as party leaders and to curtail the entrenched powers of the older leaders.

• A distributive “check and balance” mechanism for power is needed within a political leadership team, bureaucratic structure, party structure, and other institutionalized forms of governance.

• Maybe the focus be on the ways to split the relations between power and authority; there should be mechanisms to make sure greater distribution of power and responsibilities.

•It should be borne in mind that power is always delegated to powerful people; this is the basic tenet of democracy whereby leaders become powerful only because they receive support from their subordinates (or people).

How can Nepal prosper?

The openness of a society, its willingness to permit creative destruction, and the rule of law appear to be decisive for economic development.
– Kenneth J. Arrow, Nobel laureate in economics.

In the 1st part we talked about how Nepal keeps failing and why is it poor. Please read it, if you haven’t.
So If we want to understand how Nepal can prosper, first we have to answer this question first.

What is the link between politics and prosperity?

Economic institutions shape economic incentives: the incentives to become educated, to save and invest, to innovate and adopt new technologies, and so on. But it is the political process that determines what economic institutions people live under, thus it is the political institutions that decide how this process works.

Central is the link between inclusive economic-political institutions and prosperity. Inclusive economic institutions that enforce property rights, create a level playing field, and encourage investments in new technologies and skills are more conducive to economic growth than extractive economic institutions that are structured to extract resources from the many by the few and that fail to protect property rights or offer incentives for economic activity.”

Inclusive economic institutions in turn are forged on foundations laid by inclusive political institutions which make power broadly distributed in society and constrain its arbitrary exercise.

Inclusive political and Inclusive economic institutions = Prosperity in Nepal

How to build inclusive institutions in Nepal ?

To be inclusive in Nepal, economic institutions must feature secure private property, an unbiased system of law, and a provision of public services that provides a level playing field in which people can exchange and contract; it also must let the entry of new businesses and allow people to choose their careers.

Inclusive economic institutions are in turn supported by and support inclusive political institutions that is those that distribute political power widely in a pluralistic way and are able to meet some amount of political centralization to set up law and order, the foundations of secure property rights, and an inclusive market economy. Similarly extractive*** economic institutions are linked in synergy to extractive political institutions which concentrated power in the hands of a few, who will then have incentives to support and develop extractive economic institutions for their benefit and use the resources they get to cement their hold on political power.

*** Institutions, which have opposite properties to those we call inclusive are called extractive institutions— extractive because such institutions are designed to extract incomes, wealth and power from one subset of society (mass) to help a different subset (elite).”

What are critical junctures and how they affect in positive or negative ways?

Critical junctures are catalysts for change either into inclusive or extractive political/economic institutions and decide whether the nation heads towards prosperity or poverty. In Nepal, Jana Andolan of 2006 was one such critical junctures. But it has led to more extractive political /economic institutions in Nepal. Right now in 2012 the failure of constitution to be built leading to a constitutional limbo is what can be called critical juncture. This can be a catalyst for Nepal being either prosperous by building inclusive institutions or a failed nation if it chooses to build more extractive institutions.

Can radical innovation like the internet bring about positive change in Nepal ?

Major innovations like the information technology also threaten to reshape political power. The ruling elite believe that they would become political losers because they are concerned, those displaced or rejuvenated by this invention (like the internet making large parts of bureaucracy redundant, and bringing educated youths from diverse backgrounds into the political game) would create political instability and threaten their own power.

The elite especially when their political power is threatened, form a more formidable barrier to innovation. The fact that they have much to lose from creative destruction means not only that they will not be the ones introducing new innovations but also they will often resist and try to stop those innovations. Thus society needs newcomers to introduce radical innovations, and these newcomers and the creative destruction they wreak must often overcome several sources of resistance, including that from powerful rulers and elites.

So what needs to be done to take Nepal on the road to prosperity ?

When a broad segment of society mobilizes and organizes to effect political change, and does so not for sectarian reasons or to take control of extractive institutions but to transform extractive institutions into more inclusive ones, then only it will translate into meaningful change. Whether such a process will get underway in Nepal and open the door to further empowerment and ultimately to durable political reform will depend on the type of economic and political institutions we make, on how we overcome the opposition to the creative destruction that happens time and again,  and on the critical junctures (events) like we are faced now in 2012 with the current constitutional limbo.

What rules Nepali society ends up with is determined by politics, and the answer to the question of whether our beloved country will fail or prosper.

In other words to make Nepal prosperous, we have to build inclusive political and economic institutions NOW !



This summary of this article is made possible through heavily borrowing and edits based on quotes from the book “Why Nations Fail” by Daron Acemoglu and James A. Robinson. The authors hold copyright to a lot of content in this article, therefore I cannot claim any right to this article. If  you consider this stealing, I apologize in advance. I only do this because their words seem to do justice than mine. If you are copying content from here, please attribute the article to the names mentioned above properly.

Why Nepal keeps on failing ?

This is a 2 part series: 1) Why Nepal keeps on failing? 2) How Nepal can prosper again? (This writing is heavily adapted from book “Why Nations Fail” I recommend reading it.)

To answer why Nepal keeps on failing, first let us address this question:

Why is Nepal poor ?

Nepal is poor precisely because it has been ruled by a narrow elite that have organized society for their own benefit at the cost of the vast mass of people. And every leader of a new revolution assimilates either with the old elite or copies their systems to create the same vicious cycle as before.

The things that have held Nepalis back include an ineffective and corrupt state and a society where they cannot use their talent, ambition, ingenuity, and what kind of education they can get. But Nepalis also recognize that the roots of all these problems are political. All the economic impediments they face stem from the way political power in Nepal is exercised and monopolized by a narrow elite. This, they understand, is the first thing that has to change.

But even after so many political revolutions to right the wrongs, why does Nepal keep failing (continuously) ?

Nepal had revolutions in the past which did not change things for the most of us, because those who mounted the revolutions simply took over the reins from those they had deposed and re-created a similar system. It is very difficult for ordinary citizens to acquire real political power and change the way their society works.

But it is possible, as it happened in England, France, and the United States, and in Japan, Botswana, and Brazil. Fundamentally it is a political transformation of this sort that is required for a poor society to become rich.

Countries such as Great Britain and the United States became rich because their citizens overthrew the elites who controlled power and created a society where political rights were much more broadly distributed, where the government was accountable and responsive to citizens, and where the great mass of people could take advantage of economic opportunities.

What kind of institutions are responsible for Nepal failing?

“Institutions, which have opposite properties to those we call inclusive are called extractive institutionsextractive because such institutions are designed to extract incomes, wealth and power from one subset of society (mass) to help a different subset (elite).”

Nepal is failing because we have extractive economic institutions supported by extractive political institutions that impede and even block economic growth.

The extractive institutions upon which our narrow elite rule creates extensive inequality, and thus the potential for infighting between those who could benefit from the wealth extracted from the people. This conflict has led to the undoing of the Malla Kingdoms in the 18th century, the Rana Regime in the mid 20th century, the Shah dynasty in 2006, and ongoing fighting among main political parties.

But can’t we just focus on the economic growth, whatever political system we make?

For sustained economic growth we need new technologies, new ways of doing things, and more often than not they will come from newcomers. It may make society prosperous but the process of creative destruction that it initiates threatens the livelihood of those who work with old technologies who would have found themselves unemployed by the new technology.

The fear of creative destruction (the change that happens when old is replaced by new through the use of innovation in technologies, techniques and events) is the main reason there was no sustained increase in living standards in Nepalis in the last 150 years (since the Rana rule). Technological innovation makes human societies prosperous, but also involves the replacement of the old with the new, and the destruction of the economic privileges and the political power of certain people.

Because elites dominating extractive institutions in Nepal fear creative destruction they will resist such innovation and hence, any growth that starts under extractive institutions will be ultimately short-lived. So in-case you were wondering, dictatorship won’t take us to the road to prosperity even if it makes sound economic policies at the beginning since it is in its nature to resist any economic innovation for the fear of ‘creative destruction’ of itself..

While economic institutions are critical for determining whether Nepal is poor or prosperous, it is politics and political institutions that decide what economic institutions Nepal has. Therefore we are at a critical juncture where our politics will decide what our economic system will be like and how poor or rich therefore Nepal will be in the future.

Extractive political Institutions + Extractive economic institutions = A Failed nation Nepal

Now please read part 2 for: How can Nepal prosper?



This summary of this article is made possible through heavily borrowing and edits based on quotes from the book “Why Nations Fail” by Daron Acemoglu and James A. Robinson. The authors hold copyright to a lot of content in this article, therefore I cannot claim any right to this article. If  you consider this stealing, I apologize in advance. I only do this because their words seem to do justice than mine. If you are copying content from here, please attribute the article to the names mentioned above properly.