Reducing Inequality: Underlying Challenge of Federalism in Nepal

The spirit of federalism among general public in Nepal was fostered with a strong sentiment of self-governance of their locality and setting themselves free from the top-down central authority. In other words, federalism was a response of grass-roots against social, cultural, economic, and political hegemony of the center and sub-centers. Such hegemony relationship is considered to be the main reason of increasing socio-economic inequality among populations living in the center/s (e.g. Kathmandu), sub-centers (district headquarters) and peripheries—areas that are generally isolated from the center and sub-centers.

Many people have proposed different explanations about the rationale of federalism. Some argue that if the country had been able to maintain a reasonable level of equity in basic wellbeing among its populations across regions/sub-regions, the issue of federalism would not have existed now. It is, in this context, important for us to reflect on the underpinnings of the socio-political phenomenon that conceived federalism in Nepal.

Despite the passage of an ambitious local governance act in 1990s, relationship between centers, sub-centers and peripheries remained strongly hierarchical in terms of institutional structure, information exchange and program/service delivery. The flow of information, decisions and resources remained largely controlled by the central or sub-central authorities. But perhaps even more important, the organization and management of public institutions at the local level continued to maintain the culture of the rule-of-privilege. Majority of minorities—women, indigenous, and the Dalits—continued to be excluded from the management and decision making processes at the local level. Such exclusion ultimately cost high for the society as these groups continued to loose interest in those institutions such as legal systems, administrative systems, health/education etc.

The lack of adequate inclusion of these populations in institutional stake helped maintain the gap between people and the institutions. In other words, public institutions could not adequately buy-in local people for their product and services. Consequently, poverty and vulnerability continued to transmit through generations especially among minority populations of peripheral areas. Maoists took the opportunity to play the chord of the state of vulnerability, which later turned out to be the fundamental agenda (federalism) of the democratic movement organized by the Maoists and seven-party alliance in 2006.

The moral ground of federalism in Nepal, as explained, lies in the persisting social inequalities across sub-regions and populations. Such inequalities are the result of the way Nepalese institutions function and their inability to have their stakeholders’ buy-in. A successful federal structure therefore should be able to end this gap, primarily by empowering locales in periphery and including them in institutional governance.

Various models (ethnicity-based, ethno-language based, geography-based, natural resources-based) proposed by different political parties and intellectuals therefore warrant a rigorous analysis and debate whether they can actually address the crux of the problem. Given that only six months remain to complete the constitution and that too amidst a tremendous political instability on the ground, it will be difficult to conduct such rigorous analysis one these models and find the “right one”. If so, Nepal may continue to risk instability, inequality and underdevelopment.