News February 2019

Overcoming Corruption and Impunity

CESIF Nepal Blog / Article, Good Governance, Thematic Areas Leave a Comment

We need policies for development, rule of law and human security that can get results in spite of corruption and impunity.

Political leaders, including Prime Minister Khadga Prasad Oli, have been talking about the ‘implementation of the constitution’. The ‘implementation’, however, is only about creating laws and new federal structures and mechanisms so that they can exert political control based on those laws.

Like many other countries, the evolution of the state in Nepal has been a gradual process. Democratization in Nepal has always been a bargain between the autocratic political elites, who want to retain control over the state and its resources, and the citizens, who have been demanding democracy.

The transfer of political power to the people, in practice, remains incomplete and is allowed only to the extent required to maintain political stability. According to Robert Bates, a modern state reflects the ‘the transformation of the use of power from a means of appropriating wealth into an instrument of its creation’. However, Nepal’s democracy has so far failed to deter individuals from pursuing privately beneficial but socially harmful activities.

The current political leadership is more interested in ruling by the new laws and mechanisms than allowing the people to enjoy real democracy. The need for political survival creates conditions in which the political leaders in power have to dole out special privileges to their supporter base and frequently adopt policies and practices that harm public interests.

Corruption and impunity have become the central mechanisms of Nepali politics. Political leaders depend on these two mechanisms to accumulate power and extract resources. Estimates show that top political leaders control the volume and flow of corruption, which could be worth at least Rs 200 billion a year. This includes theft of state revenues and development expenditure; rent collected mostly from the private sector, contractors and the public sector office holders; extraction of natural resources; and extraction of wealth from citizens and consumers.

The political economy of corruption and extraction is supported by five major pillars linked to the political settlement process. The first is the policy of redistribution of wealth and welfare schemes, which seeks to appease the voters and maintain political control. The second is the pork-barrel politics targeted to constituencies. The third is the element of corruption/extraction which steals from the government budget (mainly development expenditure) and collects rent from the private sector for access to the extraction of natural resources, operation of licensed sectors, and exploitation of consumers/citizens.

The fourth pillar is the decentralization of corruption to the intermediate classes (which constitute about 30-40 percent of the population) through patronage systems, federalism and party organisation. The fifth is a system of impunity built into the kleptocratic network which captures, distorts and hollows out the functions of core state legal institutions (institutions that make the law, enforce the law and apply the law in individual instances).

Nepal’s political parties, therefore, are unreliable partners. The people cannot depend on them, or even trust them, to implement democracy. The main opposition, Nepali Congress, has become incompetent. One of the reasons for such incompetence is the party leaders’ share in the political settlement.

In addition, corruption and impunity are having a severe impact on the state and the people of Nepal. Newspaper reports are full of examples showing how corruption and impunity are subverting Nepal’s democratic evolution, federalism, social cohesion and economic development. Corruption and impunity are distorting development priorities and obstructing economic growth. They are making the society vulnerable to environmental, economic and political shocks which has a severe impact on the poor and the marginalized. They are also undermining our democratic system and are likely to fuel inequality.

These are just a few examples of the impact of corruption and impunity. Since it is impossible to counter all the negative impacts, our priority should be to promote the rule of law, economic development, and human security.

The level of corruption is directly linked to a society’s level of transition to the rule of law and economic development. At present, Nepal is trapped in a vicious cycle. Endemic corruption is hindering Nepal’s development and promoting impunity, which in turn is preventing Nepal’s transition to democracy and development.

Given the political leaders’ dependence on the two mechanisms for accumulation of power, we should not expect corruption and impunity to go away any time soon.

There are, however, ways to break through the cycle. Experiences of various societies around the world show that it is possible to achieve democracy and development in spite of corruption and impunity. Therefore, in order to achieve economic development and control corruption, Nepal must select a model that is resilient to corruption and the absence of the rule of law.

For example, in their recent report, Mustaq Khan and Pallavi Roy provide some examples of how such development policies could look like in Nepal. Similarly, strategies exist to promote the rule of law even when the kleptocratic networks have managed to capture and hollow out core state legal institutions.

Civil society should, therefore, begin to talk about implementation of democracy, because there is a distinct difference between ruling by law and rule of law. There are three areas where civil society must intervene: rule of law, economic development, and human security. We need strategies that can deliver rule of law, economic development and human security in spite of widespread corruption and impunity.

Author: Ajaya Bhadra Khanal

Photo: Sushma Bhatta

This article first appeared in The Kathmandu Post on September 9, 2019.

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