Nepal’s policymaking has been taken up by the much narrated focus on economic prosperity, and its immediate development goal is to transform into a middle-income country. A critical reading of the present policy debate shows that the agenda of building an inclusive institution was not a development strategy at all, but a tool for elite policymakers to soothe demands from the margins for accountable institutions. The relevance of inclusion has ceased to exist in dominant policy discourse after its service to the elite during the peace process to consolidate state power. Neither policymakers nor opinion makers are concerned that inclusive institutions are necessary for the accountable delivery of basic services, which is a prerequisite for sustained democracy and development.

Economist Daron Acemoglu and political scientist James Robinson, in their seminal book Why Nations Fail, suggest that countries can prosper economically only if they have inclusive institutions which can create a virtuous circle of innovation, economic expansion and more widely held wealth. The proposition was drawn from a comparative analysis of the political economic institutions of the developed and the developing countries. This painstakingly drawn idea demonstrates that the foundation of economic prosperity is the elimination of privileges.  

All distraction

In Nepal, nothing more has been said about economic prosperity and how it is going to be achieved except for advertising it in terms of free trade, that is foreign direct investment in roads and hydropower projects; and a free market, that is privatisation of basic services like health and education. In any case, it is to be seen whether the euphoric publicity is designed to distract the masses from their fight against poverty and indignity, consolidate state power and capture resources for personal and sectarian gains.

The 1990 constitution was received as a marker of an era of economic development with the same kind of fervour that people had for the reign of king Mahendra in the 1960s. The post-1990 period saw much enthusiastic privatisation of state-owned enterprises (SOEs), investment in hydropower projects and expansion of roads to rural areas, to name a few initiatives, in the name of economic prosperity. King Mahendra’s reign is still remembered for the construction of highways and investment in SOEs, and he is acclaimed by the elite section of society as a visionary leader. Similarly, the successful privatisation of SOEs resulted in the then finance minister Ram Sharan Mahat being awarded the title Finance Minister of the Year 2016 by The Banker magazine of the UK.

The two development policies were diametrically opposite, but they had one thing in common: They did not have any consideration for inclusive institutions and elimination of privileges. Eventually, they failed to prepare a ground for Nepal to eliminate the vicious circle of underdevelopment. The king Mahendra-reinvigorated monarchy survived the student protests in 1979 and the referendum in 1980 to come to an end through the first People’s Movement in 1990. The most acclaimed political change of 1990, that also emphasised economic prosperity, was greeted with a decade-long armed conflict that saw about 17,000 deaths and the second People’s Movement in 2006.

Will the narrative change?

The 2015 constitution has introduced one more change in the form of governance. The government, recently elected as per the new constitution, seems to have exclusive focus on the agenda of growth and economic prosperity. One more time, the agenda of economic growth and prosperity has given the left alliance a sweeping electoral victory. Backed up by consolidated power and a conciliatory geo-strategic background, there is an assurance of the expected results being seen. What is not known is whether the great masses will get to enjoy the development dividends or the existing make-up of institutions will remain extractive and bolster resource capture and abuse of authority.

Several decades ago, American political scientist Samuel P Huntington argued that economic prosperity in the developing countries with weak governing institutions would not necessarily lead to political stability. On the contrary, economic growth in such contexts can be politically destabilising. Daron Acemoglu and James Robinson have described Huntington’s institutions as being extractive institutions and argued that such institutions create private gains for the elite and impoverish the broader society.

Newly installed signposts such as the holding of the elections for the implementation of the constitution are confirmative that Nepali policymakers do not care about the ladder of inclusive institutions. Nepal is now perceived by the great mass as a country that perpetuates the well-documented patterns of exclusion and lack of accountability that have led to persistent inequities in public decision-making.

A quick institutional analysis of all branches of the state confirms their exclusionary nature. The analysis shows not only lack of progress, but even regression in some areas. The long-standing hold of the elite on policymaking, narrative generation and resource allocation persists. The networks of elite castes across all public institutions, and the way they collude with each other for the exchange of favours and resources, are obvious. As a result, the hopes held by the general masses have only diminished with the passage of time.

Nepali is a graduate in international development economics from the Walsh School of Foreign Service, Georgetown University