Corruption, financial indiscipline and outright theft of public money is increasing rapidly at the expense of the poor. In the name of federalism and democracy, corruption is now embedded in the political and administrative system. Elections are becoming incredibly expensive and there is no transparent system of raising money that is sanctioned by law. So money is used to obtain power, and power is used to obtain money, creating a vicious circle that threatens the integrity and character of even the most honest and upright.

“Democratically” embedded corruption, as is evident in present day Nepal, is able to expand its tentacles both in the vertical and horizontal direction, threatening the basic objectives and aspirations of the people. A vertically expanding corruption structure assures a decrease in the probability of getting caught for corrupt practices over time, because powerful “clusters” are formed that are determined to protect their members and to challenge any countervailing forces. Ideally, democracy should be imbued with the concept of constitutional checks and balances including civil society and free press, thus providing opportunities for countervailing forces to face these clusters. However, Nepal’s experience so far indicates that the theoretical construct of liberal democracy can be easily hijacked by ever increasing clusters of corruption. In this scenario, periodic elections, the hall mark of a democratic system, provide legitimacy for the continuation of a set of policies and practices that help “democracy enabled corruption” gain strength.

A question of probability

In a democracy, membership in a corruption cluster lowers the probability of arrest. But this is just the beginning. It also means that even if a person is arrested, the probability of he/she  actually being charged in court also remains low, since both the vertical and horizontal linkages of a given corruption cluster will try to protect its individual members, who are now vital for the whole. Powerful corruption clusters will develop horizontal linkages in the system, making a mockery of the whole concept of checks and balances. To be successful in this game of building horizontal linkages, it becomes necessary to have your own “man” in important and key positions in the different arms of government. Thus, as soon as a new party comes to power, its first task is to identify those who can be reliable members of new corruption clusters in the making. Those who resist are quickly sent to the dogs. And then the looting begins with a sense of impunity that is enabled by democracy. This is the approximate reality of the country today.

Corruption clusters in the government, as they gain strength over time, focus their attention on horizontal linkages in different institutions of the system. In this context, the most important institutions in Nepal are the Commission for the Investigation of Abuse of Authority (CIAA) and the judiciary. In the event that a person is arrested and a case is registered against him in court, the vertical clusters of corruption will be on alert and will make sure the case is dismissed. When this link becomes strong, impunity gains strength. So even if the corrupt have to face the court, they know that they can sleep in peace because of the conviction that they will be protected by the vertical corruption clusters of which they are a part. It is then that democracy becomes a system for the corrupt, with the electoral system covering the whole process of degeneration under the veil of periodic elections. 

When the three elements of corruption prevention, namely the probability of arrest, the probability of being charged for corruption in a court of law, and the probability of punishment start decreasing, vertical clusters of corruption flourish and gradually evolve into bigger and stronger clusters that spread their wings over all sections of governance. This trend gains momentum when political parties in power start viewing the opportunity to serve in the government as an opening to promote partisan interests rather than national interests. There is then a scramble to monopolise the privileges and perks of being in power. Mentality of this nature forces a new disconnect between the people and the government. Under these conditions, even if the government has electoral legitimacy, it becomes afraid of its own people and starts looking for foreign help and support to remain in power. This is the road to a fragile state.

Corruption clusters have grown roots in the politics and bureaucracy of Nepal and are gradually taking an organised form. Cases of corruption are no longer deviations from the norm. The common people sense this trend. Hope for a new Nepal, which was a major theme a few years ago, has evaporated to give space to a new sense of cynicism that can only lead to new social turbulence and instability. There are no indications that the ruling political leadership is aware of this danger.

Corruption and anarchy

A positive association has been observed between rising levels of corruption and a decrease in bureaucratic quality and productivity of investments. In this scenario it becomes normal to ignore the efficient use of resources. In Nepal, for example, over a third of government investments take place in the last month of the fiscal year. This pattern is repeated every year and represents what could be labelled as a form of “silent corruption” protected by various corruption clusters in the government. It leads to huge welfare losses and has a negative impact on economic growth. In recent years, the situation has been further aggravated by a rise in “populist fiscal anarchy” which consists of commitments to new programmes that are not included in the budget and yet are announced without the required economic analysis that should be conducted by concerned departments or other agencies of the government. Prime Minister Sher Bahadur Deuba has introduced a whole set of populist policies without any concern about their long term impact on the economy. His actions serve as a prime example of populist fiscal anarchy. His own deputy, the vice chairman of the National Planning Commission, has gone to the press lamenting the fact that that his office was ignored in the decisions. If newspaper reports are to be believed, the  Finance Minister, who is a close confidant of the Prime Minister, has reminded the Cabinet that there is a Ministry of Finance in the country that has to be taken into confidence before any such policies are introduced. When deciding on policies that have far reaching fiscal impacts, ad hoc, irresponsible and anarchic behaviour only increases the level of cynicism in the bureaucracy while strengthening the idea that rational analysis and adherence to government rules and regulations can be safely ignored if there are political and financial advantages available to the ruling political establishment. It is this trend that is bound to strengthen the clusters of corruption in vital institutions in the nation and pose an existential threat in the future. 

It is important for a leader to be aware of the past so that it helps to formulate a vision for the future. A leader must be careful not to leave a legacy that goes against the values cherished by the people. A valiant attempt to destroy corruption clusters in politics and bureaucracy is what the people desire, and such an attempt is the need of the hour. On this score, Deuba’s government leaves a trail of disaster that will be hard to forget even while appreciating his efforts in holding the national elections.

Lohani is chairman of the ARPP (Nationalist)