DECENTRALIZED LOCAL GOVERNANCE: RHETORIC AND PRACTICE IN NEPAL SINCE 1950s
A Dissertation Submitted to
The Faculty of Humanities and Social Sciences of Tribhuvan University in Fulfillment of the Requirements for the Degree of DOCTOR OF PHILOSOPHY (PhD) in SOCIOLOGY
By
Sangram Singh Lama Tribhuvan University Kathmandu, Nepal
November 2009
LETTER OF RECOMMENDATION
We certify that, this dissertation entitled ‘DECENTRALIZED LOCAL GOVERNANCE: RHETORIC AND PRACTICE IN NEPAL SINCE 1950s' was prepared by Mr Sangram Singh Lama, under our guidance. We hereby recommend this dissertation for final approval by the Research Committee of the faculty of Humanities and Social Sciences, Tribhuvan University, Kathmandu, in fulfillment of the requirements for the DEGREE OF DOCTOR OF PHILOSOPHY (PhD) in SOCIOLOGY.
------Prof. Dr. Dilli Ram Dahal Supervisor
------Prof. Dr. Kailash Pyakuryal Expert
Date: 2 March 2009
ii
APPROVAL LETTER
This dissertation entitled 'DECENTRALIZED LOCAL GOVERNANCE: RHETORIC AND PRACTICE IN NEPAL SINCE 1950s' was submitted by Mr Sangram Singh Lama for final examination by the Research Committee of the Faculty of Humanities and Social Sciences, Tribhuvan University, Kathmandu, in fulfillment of the requirements for the DEGREE OF DOCTOR OF PHILOSOPHY (PhD) in SOCIOLOGY. I hereby certify that the Research Committee of this faculty has found this dissertation satisfactory in scope and quality and has therefore accepted in for the sought degree.
------Prof. Nav Raj Kanel, PhD Dean and Chairperson Research Committee Faculty of Humanities and Social Sciences, Tribhuvan University Nepal
Date: ______
iii ACKNOWLEDGEMENTS
The idea for undertaking this study sprouted in me some time in January 2003, when I attended a talk programme in Kathmandu where the late Dr Harka Gurung delivered a lecture on issues related with structural inequalities, social exclusion and discrimination being faced by the poor and excluded groups, particularly Dalits, Indigenous Peoples, women and Madhesi despite of many initiatives such as decentralization of power and authority to lower units of government and peoples by different governments for many years to ensure participatory development and service delivery to them in Nepal. At that time of the history, the Maoist 'People's War' was at its highest peak. In terms of their socio-economic and political participation and representation in different state institutions, abundant information and data are available at the macro-level and based on these, many have claimed that there is no equal opportunity to participate and represent in every state institution for each and every Nepalese peoples. However, there are no such data or information available and analyzed at the micro-level to substantiate this claim. In view of this, I, as a commoner, begun thinking and conceptualized the issues pertaining to our society, structural inequalities, social exclusion and their relationships with the state and the decentralization scheme that Nepal has been adopting and experiencing in the name of social change by devolving power and authority to the lower units of government since a long time back and the result is this dissertation.
To bring this study to this shape, a range of extremely helpful and co-operative people have contributed immensely to whom I own so much that I can not express in words here. I would like to take this opportunity to express my sincere gratitude and profound appreciation to several individuals and institutions that have generously provided me with various guidances, supports including lending books, reports and other relevant publications for this study.
Foremost, of course, I am deeply indebted to my supervisor Prof Dr Dilli R Dahal, who has extended his endless patience and enthusiasm in guiding me for undertaking this study. Prof Dahal has been a great source of inspiration for me who has provided me with the untiring support and zeal as and when needed throughout my study. During the entire study period, he provided guidance from early days of formulating ideas, collecting relevant literatures and other materials, designing the field questionnaires and checklists, analyzing and processing the data collected from the fields and finally giving a concrete shape of my work. This study would have been difficult, if not impossible, without his timely support and guidance. I would also like to express my gratitude and profound appreciation to Prof Dr Kailash Pyakuryal and Dr Ram B Chhetri, Central Department of Sociology and Anthropology, Tribhuvan University, for their constant guidance and support for this study. Despite their hectic schedules, they extended every possible support and encouraged me to complete this study. Simple words of thanks can not express my gratitude to them.
iv I am indebted to late Prof Santa Bahadur Gurung, formor Vice-Chairperson of the National Foundation for the Development of Indigenous Nationalities (NFDIN) for encouraging me to undertaking this study. I am equally indebted to NFDIN for providing me a research fellowship to undertake this study without which it would not have come to this state.
I record my deep sense of obligation and gratitude to late Dr Harka Gurung for his continuous encouragement and support. In fact, it was late Dr Gurung who inspired me to undertake this study. He accordingly had constantly provided me with his guidance and support from the early days of my study and suddenly he passed away in a helicopter crash in Taplejung on 23 September 2006 when I needed his expert guidance the most. He would have been happy to see this work had he still been alive.
I own my sincere gratitude to Dr Tulsi Narayan Shrestha, Dr Chaitanya Subba, Dr Krishna B Bhattachan, Dr Sumitra Manandhar Gurung, Mr Som Lal Subedi, Dr Saket Thakur, Mr Mukti Kafle, Dr Dwarika Nath Dhungel, Dr Mukta S Lama Tamang and Mr Raghav R Regmi for providing comments and suggestions to this study.
Similarly, I cannot find words to express adequately my gratitude to Mr Ram Bhandari of TU Central Library, Mr Krishna Shrestha of British Council Library, Ms Kirti Bhattarai and Mr Kishan Yadav of SWC Library, Mr Sahadev Dhungana of British Embassy, Dr Nani R Subedi of ICIMOD, Mr Shiv Bhandari of EU, Mr Krishna P Sapkota, Mr Hem Raj Lamichhane and Ms Rukmani Nepal of ADDC/N, Dr Hikmat Bista, Mr Charan Prasai and Mr Bhagat Sunwar of DASU/DANIDA, Dr Hira M Ghimire and Mr Biswo Ulak of DFID Nepal, Mr Santosh Bista and Mr Bikash M Singh of ESP Nepal, Mr Ram B Chhetri of GTZ/UDLE, Ms Bindu Panday and Ms Subadra Joshi of LBFC/MoLD, Dr Jagadish C Pokharel, Mr Chhabindra Parajuli of NPC, Mr Krishna Hari Banskota of MoF, Mr Binod Singh of DDC Kavre, Mr Prem Chapagain of DDC Morang, Mr Ek B Gurung of SDC Nepal, Dr Keshab M Shakya and Ms Lhamu Tamang of SNV Nepal, Mr Ram K Pokharel and Mr Shesh K Kafle of PDDP/UNDP, Mr Dev R Dahal of Friedrich Ebert Stiftung, Mr Binod Chapagain of LFP, Dr Chuda B Shrestha of Nepal Police, Mr Mukti Rizal of Institute of Governance and Decentralization, Ms Shova Basnet and Mr Nabin Singh of SAMANTA, Mr Naresh Gurung of UNICEF, Mr Binod Bhattarai of SOUND, Mr Ram K Sharma of Nepal Labour Academy, Mr Pramod Tandukar, Mr Jyoti Danuwar, Ms Geeta Lama, Mr Naresh Tamrakar and Ms Pasang P Sherpa of NEFIN/JEP, Mr Parimal Jha, Mr Bikram Subba and Mr Yadav Chapagain of Human Resource Development Center, Mr Pushpa Lal Moktan of EAP, Prof Yagya Adhikary, Mr Jitpal Kirant, Mr Tamla Ukyab, Mr Mohan Mardan Thapa, Mr Sanu Kancha Lama, Mrs Buddi Maya Lama, Ms Bhakta Kumari Lama, Mr Tanka Adhikary, Mr Mohan Kharel, Mr Mangal Soren, Mr Laxman Soren, Mr Shiv Narayan Hasda, Mr Manoj Hasda, Mr Mahendra Khadka, Mr Sangat K Lama, Mr Shambu P Kattel, Mr Binod Pokharel, Mr Chun Bahadur Gurung, Mr Padam Chettri, Ms Meena Pyakuryal, Ms Deepa
v Manandhar, Mr Madhav Risal, Ms Chetana Loksum, Ms Sunita Gurung, Ms Sunita Pradhanang, Mr Narayan P Sitaula, Mr Shiv Narayan Chaudhary, Ms Dil Maya Limbu, Mr Ganesh Adhikary, Mr Shyam Gurung, Ms Linda Shrestha, Mr Padam Pariyar, Ms Dhana Kumari Lama and many more who helped me providing relevant and useful books, reports and other publications for this study.
Last but not the least, I am thankful to my sons Saurab and Gaurab for undertaking all the typing and Mr Kamal Rai, Mr Tanka Gurung and Mr Narayan S Lama for helping me in photocopying and providing secretarial works. I am also thankful to my wife Kumari and entire family members for every support provided to complete this study.
Sangram Singh Lama Kathmandu,
2 March, 2009
vi ABSTRACT
In recent years, a wide range of Nepali stakeholders, sociologists, anthropologists, political scientists, academics, civil society groups, NGOs, INGOs and donors have voiced their concerns about the causes and processes of discrimination, social exclusion and inequality of opportunities, devolution of power and authority to the lower units of government and poor state of governance in the country. The general public had hoped that the euphoric jubilation that marked the afterglow of the 1990 democratic restoration in Nepal would have ushered in an era of improved social inclusion and governance. But none of the incoming governments of the post-1990 have met the expectations of the people for social change and the widely discussed and accepted view now is that there is a grave crisis of governability in Nepal. The main victims of this crisis have been the majority of Nepal’s citizens who are poor, vulnerable and marginalized as every state machinery including the civil society are still being highly dominated by the upper caste male groups. Meaningful peoples’ participation from poor, vulnerable and socially excluded communities in the state and non-state machineries and a participatory democracy for social change remained mere oratory rhetoric. As a result, Nepal today remains one of the poorest countries in the world with more than half of its people living below the poverty line.
At this juncture of Nepal’s desperate straits, this dissertation “DECENTRALIZED LOCAL GOVERNANCE: RHETORIC AND PRACTICE IN NEPAL SINCE 1950s” is undertaken with the hope that it would contribute towards understanding the root causes of the failures of decentralization schemes to empower the poor and marginalized groups for social change despite of several years investment and experiments in the country.
We must understand that the roots of Nepal’s society and democracy are deep rooted in rural villages, municipalities and districts which we jointly called as the local bodies (LBs). These LBs particularly the VDCs have no structural linkages with the central level government institutions. Lack of resources at the local level and limited scope are obstacles to the local governance. Also the total number of local bodies particularly the VDCs and districts (some are too big and some are too small) is far too many with very poor institutional and financial capacity to run and manage the development activities. Despite much hue and cry, the local governance has been somewhat relegated to the backseat if one closely examines the ways these bodies have been run and managed.
Different policies, legal, institutional, fiscal and operational frameworks related to the decentralization and local governance were promulgated in the name of empowering the local bodies but all these past legal instruments and frameworks for decentralized local governance have remained only in rhetoric than in practice. The Local Governance Act (LSGA) 1999 and many other related Acts have not been implemented in the right spirit and direction.
vii The local leaders and bureaucrats running the LBs are mainly determined by certain social determinants such as caste, family, social status, property and region. It can be maintained that in Nepal, the local governance is always viewed as a unit of decentralization of power and not as the self-governing autonomous processes. Nepal has been maintaining a unitary state of governance with a strong dose of centralization and whatever institutions were created within such a Kathmandu centric policies, legal, institutional, fiscal and operational frameworks; it highly influenced the decentralization, local governance and leadership building as well.
The focus on decentralization schemes and actions that held predominant over a long period of time was not geared towards promoting the local governance in Nepal. The different governments who came to power on different times paid only lip-service to decentralization and local governance. As indicated by the study findings, the attitudinal change and development of a true participatory culture, above everything else, seems to be very crucial for enhancing and promoting the local self-government in Nepal. So far, decentralization, local governance and devolution of power and authority to the lower tiers of the government has so far received no or very little attention from the central level political party leaders, policy makers and the whole government bureaucrats.
All the present trends explained above lead us to believe that the present structure of LBs has posed difficulties in operationalizing and implementation of decentralization scheme effectively. Because of this, country has been facing many problems such as the need of more funds to run LBs administratively and financially, needed huge resources to train and build their capacity creating a huge dependency of these LBs on central government grants as there was no implementation of effective fiscal decentralization as they could not generate required resources on their own.
It can be further said that the centralized system of governance, which Nepal has been following since 240 years ago, could not govern the country with heterogeneous socio- cultural and linguistic diversity like ours. It was totally exclusionary and discriminatory towards the poor, marginalized, Dalits, indigenous peoples, women, Madhesis and so on. The present state's structure was designed in such a way that it destroyed the very identity of the ethnic peoples, women, Madhesis and Dalits. It failed to recognize and promote the socio- cultural diversities.
If Nepal really wants to ensure social inclusion, equity, governance and justice so as to empower the poor and excluded groups for their socio-economic, cultural and political advancement, the entire system of governance must be inclusive and participatory which was not possible from the present unitary state structures. Judging from all the past experience, it can be concluded that the need of the hour is that the present Nepali state must be restructured and the roles and powers of different layers of governments (central, provincial
viii and local governments) should be clearly mentioned in the new Constitution and there should be provisions to link their respective functions. It should be remembered that we can not reverse the past, we can only learn from it.
ix ABBREVIATIONS AND ACRONYMS
ADB : Asian Development Bank ADDC/N : Association of District Development, Nepal ADRA : Adventist Development and Relief Agency BCN : Brahmin, Chettri and Newar BS : Bikram Sambat CA : Constituent Assembly CBOs : Community Based Organizations CBS : Central Bureau of Statistics CDO : Chief District Officer CECI : Centre for International Studies and Co-operation CEPREAD : Centre for Environment and Agricultural Policy Research, Extension and Development CF : Community Forestry CFUGs : Community Forest User Groups COs : Community Organizations CMS : Community Managed School CPN (M) : Nepal Communist Party, Maoist CPN (UML) : Nepal Communist Party, United Marxist Leninist CSOs : Civil Society Organizations DADO : District Agricultural Development Office DAO : District Administration Office DAP : District Administrative Plan DANIDA : Danish International Development Association DASU : Decentralization Advisory Support Unit DDB : District Development Board DDC : District Development Committee DDF : District Development Fund DDO : District Development Officer DEC : District Education Committee DEO : District Education Office DFDP : Decentralized Financing and Development Programme DFID : Department for International Development DHO : District Health Office DIMC : Decentralization Implementation Monitoring Committee DIP : Decentralization Implementation Plan DLGSP : Decentralized Local Governance Support Programme DoA : Department of Agriculture DoE : Department of Education DoLIDAR : Department of Local Infrastructure Development and Agricultural Roads
x EC : Election Commission ESP Nepal : Enabling State Programme Nepal EU : European Union FGDs : Focus Group Discussions FINIDA : Finish International Development Agency FNCCI : Federation of Nepalese Chamber of Commerce and Industries FY : Fiscal Year HLDCC : High Level Decentralization Co-ordination Committee HRD : Human Resource Development GoN : Government of Nepal GTZ : German Technical Co-operation HMGN : His Majesty’s Government of Nepal HoR : House of Representatives ICIMOD : International Centre for Integrated Mountain Development IGD : Institute of Governance and Development IIDS : Institute of Integrated Development Studies IPs : Indigenous Peoples IPO : Indigenous Peoples Organization IMF : International Monetary Fund INGOs : International Non-governmental Organizations INSEC : Informal Sector Service Centre IPO : Indigenous Peoples Organization IRDP : Integrated Rural Development Programme JEP : Janajati Empowerment Project JICA : Japanese International Co-operation Agency KII : Key Informant Interview LAs : Line Agencies LBs : Local Bodies LBFC : Local Bodies Fiscal Commission LDF : Local Development Fee LDF : Local Development Fund LDO : Local Development Officer LDTA : Local Development Training Academy LDTF : Local Development Trust Fund LFP : Livelihood and Forestry Programmes LGs : Local Governments LGFC : Local Government Finance Commission LGIs : Local Government Institutions LGP : Local Governance Programme LOs : Local Organizations
xi LSHG : Local Self-Help Group LSGA : Local Self-Governance Act LSGR : Local Self-Governance Regulation LUs : Local Units MMD : Municipal Management Division MoAC : Ministry of Agriculture and Co-operatives MoEC : Ministry of Education and Culture MoF : Ministry of Finance MoGA : Ministry of General Administration MoH : Ministry of Health MoLD : Ministry of Local Development MuAN : Municipal Association of Nepal MDF : Municipal Development Fund NA : National Assembly NAVIN : National Association of Village Development Committees in Nepal NC : Nepali Congress NCC : Nepalese Chamber and Commerce NDF : Nepal Development Forum NESAC : Nepal South Asia Centre NEFIN : Nepal Federation of Indigenous Nationalities NFDIN : National Foundation for the Development of Indigenous Nationalities NGOs : Non-governmental Organizations NHDR : Nepal Human Development Report NLSS : National Living Standard Survey NORAD : Norwegian Agency for Development Co-operation NPC : National Planning Commission NSP : Nepal Sadbhawana Party NWPP : Nepal Workers' and Peasant Party ODA : Overseas Development Administration PAF : Poverty Alleviation Funds PDDP : Participatory District Development Programme PDLT : Panchayat Development and Land Tax PM : Prime Minister POLSAN : Political Science Association of Nepal PRSP : Poverty Reduction Strategy Plan/Paper PRA : Participatory Rural Appraisal PSC : Public Service Commission RAP : Rural Access Programmes RC : Resource Centre RDF : Rural Development Foundation
xii REFLECT : Regenerated Freirian Literacy through Empowering Community Technique RPP : Rastriya Prajatantra Party RRA : Rapid Rural Appraisal SAP Nepal : South Asia Partnership Nepal SCDC : Sagarmatha Community Development Centre SDC : Swiss Development Corporation SFDP : Small Farmers Development Programme SHD : Sustainable Human Development SHP : Sub-health Post SHPMC : Sub-health Post Management Committee SMC : School Management Committee SNV : Netherlands Development Co-operation SWC : Social Welfare Council TU : Tribhuvan University TUs : Town Units UGs : User Groups UDLE : Urban Development through Local Efforts UN : United Nations UNDP : United Nations Development Programme UNCDF : United Nations Capital Development Fund UNICEF : United Nations Children's Fund UPF Nepal : United Peoples Front Nepal USAID : United States Agency for International Development VDC : Village Development Committee VDP : Village Development Programme VEC : Village Education Committee Viz. : That is to say, namely, in other words VUs : Village Units WB : World Bank WEP : Women Empowerment Programme WOREC : Women's Rehabilitation Centre
xiii TABLE OF CONTENTS
LETTER OF RECOMMENDATION ...... ii APPROVAL LETTER ...... iii ACKNOWLEDGEMENTS...... iv ABSTRACT ...... vii ABBREVIATIONS AND ACRONYMS...... x LIST OF TABLES ...... xxi LIST OF BOXES ...... xxii LIST OF FIGURES ...... xxiii WORKING DEFINITIONS ...... xxiv
Chapter 1: INTRODUCTION ...... 1-33
1.1 Concept of Decentralization and Local Governance ...... 1 1.2 Decentralization Elsewhere in the World and Nepal ...... 2 1.2.1 India……...... 3 1.2.2 China……...... 6 1.2.3 Indonesia ...... 8 1.2.4 Colombia ...... 10 1.2.5 Nepal……… ...... 12 1.3 Rationale of Study ...... 18 1.4 Statement of Problem ...... 21 1.5 Objectives of Study ...... 26 1.6 Conceptual Framework of Study ...... 26 1.6.1 Policy and Legal Frameworks ...... 27 1.6.2 Structural/Institutional Framework...... 28 1.6.3 Fiscal Framework ...... 28 1.6.4 Operational Framework ...... 29 1.6.5 Forms of Decentralization ...... 29 1.6.5.1 Political Decentralization ...... 30 1.6.5.2 Fiscal Decentralization ...... 30 1.6.5.3 Administrative Decentralization ...... 30 1.6.5.4 Market Decentralization ...... 30 1.7 Organization of Chapters ...... 32
xiv Chapter 2: LITERATURE REVIEW ...... 34-80
2.1 Theoretical Perspectives ...... 35 2.1.1 Society, State, Decentralization, Governance and Representation ...... 36 2.1.1.1 Theory of Social Structuration ...... 38 2.1.1.2 Socio-Centric Theory of State and Politics...... 39 2.1.1.3 Theory of Political Participation and Decentralization ...... 41 2.1.1.4 Theory of Fiscal Decentralization ...... 44 2.2 Society, State and Political Diminsions of Decentralization and Local Governance ...... ….46 2.3 Roles of the State, NGOs and CSOs in Promoting Decentralized Local Governance…..…………..…………………………..………………………………49 2.4 History of Decentralization Process…..…….....……………….…………………….54 2.5 Concept of Modernization, State-Nation, Discriminatory and Exclusionary State Machineries for the Poor and Maginalized Communities……...... ….59 2.6 Challenges and Problems of Decentralization and Local Governance ……………...64 2.7 Donors and INGOs Support and Involvement in Decentralization and Local Governance…...... ….67 2.8 Present Structures of State Institutions and Local Bodies…...... ….72
Chapter 3: METHODOLOGY ...... 81-92
3.1 Sources of Information ...... 81 3.1.1 Field Study Sequences/Processes ...... 81 3.1.2 Study Universe and Rationale for selecting Study Areas ...... 82 3.1.3 The Samples and Sample Size ...... 83 3.1.3.1 Selection of Districts ...... 83 3.1.3.2 Selection of VDCs ...... 85 3.1.3.3 Selection of Households ...... 86 3.1.4 Methods of Data Collection ...... 87 3.1.4.1 VDC Level Survey Questionnaire...... 87 3.1.4.2 Focus Group Discussions ...... 88 3.1.4.3 DDC Level Check List ...... 88 3.1.4.4 Key Informant Interviews ...... 89 3.1.4.5 Case Studies ...... 89 3.1.5 Unit of Analysis ...... 90 3.1.6 Analysis of Data ...... 91 3.1.7 Limitations of the Study ...... 91
xv Chapter 4: REVIEW OF THE PAST POLICIES ON LEGAL, INSTITUTIONAL, FISCAL AND OPERATIONAL FRAMEWORKS ...... 93-138
4.1 The First Phase: Early Epoch to 1960 ...... 94 4.1.1 Institutional and Legal Frameworks ...... 95
4.2 The Second Phase: Panchayat Epoch (1960-1990) ...... 96 4.2.1 Institutional and Legal Frameworks ...... 97 4.2.1.1 Administrative Power Decentralization Commission ...... 100 4.2.1.2 First Decentralization Plan/Local Administrative Act ...... 101 4.2.1.3 District Administrative Plan ...... 101 4.2.1.4 Decentralization Act and Rules ...... 102 4.2.2 Fiscal and Operational Frameworks ...... 103
4.3 The Third Phase: Multiparty Epoch (1990-2006) ...... 104 4.3.1 Institutional and Legal Frameworks ...... 107 4.3.1.1 Policy and Institutional Frameworks for Sectoral Devolution ...... 113 4.3.1.1 (a) Agriculture Sector ...... 113 4.3.1.1 (b) Education Sector ...... 115 4.3.1.1 (c) Health Sector...... 118
4.3.1.2 Legal Framework for Sectoral Devolution ...... 121 4.3.1.2 (a) Agriculture Sector: Legal Provisions in LSGA ...... 121 4.3.1.2 (b) Education Sector: Legal Provisions in LSGA ...... 121 4.3.1.2. (c) Health Sector: Legal Provisions in LSGA ...... 122
4.3.2 Fiscal and Operational Frameworks ...... 123 4.3.2.1 Fiscal Framework ...... 123 4.3.2.2 Operational Framework ...... 126 4.3.2.2 (a) Capacity Development ...... 126 4.3.2.2 (b) Partnership Promotion ...... 129 4.3.2.2 (c) Co-ordination Development ...... 131 4.3.2.2 (d) Roles of Different Stakeholders in Promoting Decentralized Local Governance ...... 136
xvi Chapter 5: GAPS AND INCONSISTENCIES IN GOVERNEMNT'S POLICIES ON LEGAL, INSTITUTIONAL, FISCAL AND OPERATIONAL FRAMEWORKS ...... 139-182
5.1 The First Phase: Early Epoch to 1960 ...... 139 5.1.1 Institutional and Legal Frameworks ...... 139
5.2 The Second Phase: Panchayat Epoch (1960-1990) ...... 140 5.2.1 Institutional and Legal Frameworks ...... 140 5.2.2 Fiscal and Operational Frameworks ...... 142
5.3 The Third Phase: Multiparty Epoch (1990-2006) ...... 143 5.3.1 Institutional and Legal Frameworks ...... 143 5.3.2 Fiscal and Operational Frameworks ...... 145
5.4 Gaps and Inconsistencies in Devolution of Agricultural, Education And Health Sectors ...... 151 5.4.1 Agriculture Sector ...... 151 5.4.1.1 Organizational Structures, Staffing, Accountability and Reporting ...... 151 5.4.1.2 Capacity and Resource Mobilization ...... 152 5.4.1.3 Co-ordination, Partnership and Networking ...... 153 5.4.1.4 Monitoring, Evaluation and Follow Up ...... 154
5.4.2 Education Sector ...... 155 5.4.2.1 Organizational Structures, Staffing, Accountability and Reporting ...... 155 5.4.2.2 Capacity and Resource Mobilization ...... 156 5.4.2.3 Co-ordination, Partnership and Networking ...... 157 5.4.2.4 Monitoring, Evaluation and Follow Up ...... 159
5.4.3 Health Sector ...... 160 5.4.3.1 Organizational Structures, Staffing, Accountability and Reporting ...... 160 5.4.3.2 Capacity and Resource Mobilization ...... 161 5.4.3.3 Co-ordination, Partnership and Networking ...... 162 5.4.3.4 Monitoring, Evaluation and Follow Up ...... 164
5.5 Roles of Different Stakeholders in Promoting Decentralization and
xvii Local Governance ...... 164 5.5.1 Political Parties ...... 164 5.5.2 Federations and Associations of Local Bodies ...... 165 5.5.3 Donors, INGOs and other Development Agencies ...... 167 5.5.3.1 Government's Decentralization Policy and Strategy Formulation ...... 169 5.5.3.2 Resource Base of Local Bodies...... 170 5.5.3.3 Autonomy to LBs to manage the Local Government Services ...... 171 5.5.3.4 Capacity Development of LBs and Other Stakeholders ...... 172 5.5.3.5 Transparency and Accountability of Local Bodies ...... 173 5.5.3.6 Participation and Involvement of NGOs and CSOs in Decentralized Local Governance ...... 175 5.5.3.7 Co-ordination and Communication of Donors and INGOs Support for Decentralization and Local Governance ...... 176
5.6 Challenges to implement the LSGA ...... 178
Chapter 6: FINDINGS ON DECENTRALIZATION AND LOCAL GOVERNANCE ………...... 183-246
6.1 Institutional Framework: Peoples' Participation in Central Level Institutions ……...... 183
6.1.1 Political Parties and Peoples' Participation ...... 187 6.1.2 Legislature: Supreme Policymaking Body ...... 190 6.1.3 Judicial System ...... 191 6.1.4 Interim Parliament ...... 192 6.1.5 Council of Ministers ...... 193 6.1.6 Constitutional Bodies ...... 193 6.1.7 Public Administration and Bureaucracy ...... 193 6.1.8 DDC Chairpersons, Mayors and Deputy Mayors of Municipalities...... 195 6.1.9 Leadership Position in different Councils ...... 195 6.1.10 Leadership Position in Academic and other Cultural Organizations… ...... 195 6.1.11 Leadership in Civil Society Organizations ...... 196 6.1.12 Leadership Position in Industrial, Commercial Organizations and situation of Employment Opportunities ...... 196
xviii
6.2 Institutional Framework: Peoples' Participation in Local Institutions ...... 198
6.2.1 District Level Political Participation and Representation ...... 199 6.2.2 Positions held by Different Political Parties in Local Bodies...... 201 6.2.3 People's Participation and Representation in VDC Level Elections ...... 202 6.2.4 People's Participation and Representation in VDC Level Political Parties ...... 205 6.2.5 Ward Level Peoples' Political Participation and Representation ...... 208 6.2.6 People's Participation and Representation in VDC Level CBOs and other Organizations ...... 209
6.3 Fiscal and Operational Frameworks ...... 213
6.3.1 National (Macro) Level Scenario ...... 213 6.3.2 Local (Micro) Level Scenarios ...... 215 6.3.2.1 Analysis of the Fiscal Status of Municipalities ...... 221 6.3.2.2 Analysis of the Fiscal Status of DDCs ...... 226 6.3.2.3 Analysis of the Fiscal Status of VDCs ...... 229 6.3.2.4 Views and Voices from the grassroots Peoples on Financial Resources of LBs, Partnership and Co-ordination among Stakeholders to undertake Local Development Activities ...... 234
Chapter 7: MAJOR FINDINGS AND CONCLUSIONS ...... 247-269
7.1 Major Findings ……… ...... 247 7.2 Conclusions…… ...... 254 7.2.1 Policy and Legal Frameworks for Decentralized Local Governance ...... 255 7.2.2 Policy Framework for Sectoral Devolution towards Empowering LBs and Local People ...... 256 7.2.3 Fiscal and Operational Frameworks for Capacity Development, Partnership and Co-ordination among different Stakeholders ...... 260 7.2.4 Institutional Framework for inclusive and meaningful Peoples' Participation and Representation in State Institutions ...... 263 7.2.5 Roles, Responsibilities and supports of different Stakeholders for Decentralized Local Governance ...... 269
xix ANNEXES:
ANNEX: A – Names and details of different Respondents for the Study ...... 270 ANNEX: B – Questionnaire for Household Survey ...... 280 ANNEX: C – Check List for Focus Group Discussions ...... 288 ANNEX: D – Check List for District Level Stakeholders ...... 290 ANNEX: E – Check List for Key Informants’ Interview ...... 294
REFERENCES……...... 298-312
xx LIST OF TABLES
Table 1.1: Details of Revenue Sharing ...... 7
Table 3.1: Details about Districts, total number of VDCs, Households and Populations of the Study VDCs ...... 84 Table 3.2: Details of Composition of Two Study VDCs Population by Caste/Ethnicity ...... 86 Table 3.3: Data collection Instruments, types of Information collected and Respondents ...... 90
Table 4.1: Some Decrees for Power De-concentration or Delegation during Rana Period ...... 96 Table 4.2: Legal Initiatives for De-concentration or Delegation Exercised during Panchyat Epoch ...... 99 Table 4.3: Functions, Responsibilities and Authority of LBs in managing Agriculture Sector ...... 121 Table 4.4: Functions, Responsibilities and Authority of LBs in managing Education Sector ...... 122 Table 4.5: Functions, Responsibilities and Authority of LBs in managing Health Sector ...... 122 Table 4.6: Sources of the Revenues of the DDCs as Provisioned in the LSGA ...... 124 Table 4.7: Sources of Revenues of VDCs and Municipalities as provisioned in LSGA ...... 125 Table 4.8: Legal and Policy Provisions on Co-ordination among different Stakeholders .... 133
Table 5.1: Views and Perceptions of the Respondents on contribution made by LSGA to Empower LBs ...... 178 Table 5.2: List of other Sectoral Acts in Conflict with LSGA ...... 181
Table 6.1: Integrated National Castes and Ethnic Index of Governance ...... 186 Table 6.2: District Level Political Representation by Caste/Ethnicity in Local Elections…………...... 199 Table 6.3: Women's Participation in Local Elections ...... 200 Table 6.4: Positions held by Political Parties in Local Elections ...... 201 Table 6.5: VDC Level People's Political Participation by Caste/Ethnicity ………………..203 Table 6.6: Present VDC Level People's Participation in major Political Parties by Caste/Ethnicity ...... 206 Table 6.7: Situation of Elected and Nominated Ward Representatives by Caste/Ethnicity in Local Elections ...... 208
xxi Table 6.8: Present Situation of People's Participation in Different Committees and User Groups to Utilize the Public Services and Resources by Caste/Ethnicity ...... 210 Table 6.9: Situation of Grants Provided by the Central Government to the LBs………….213 Table 6.10: Incomes and Expenditures of VDCs and DDCs (development region-wise) .... 216 Table 6.11: Situation of Internal Resource Generating Capacity of VDCs of Five Development Regions ...... 220 Table 6.12: Revenue Sources of Municipalities ...... 222 Table 6.13: Expenditure details of Municipalities ...... 224 Table 6.14: Incomes and Expenditures of Morang District ...... 226 Table 6.15: Incomes and Expenditures of Kavre District...... 227 Table 6.16: Incomes and Expenditures of Babiyabirta VDC of Morang District…………. 229 Table 6.17: Incomes and Expenditures of Devbhumi VDC of Kavre District…………...... 232 Table 6.18: Views and Perceptions of the Respondents on Financial Resources of LBs ..... 235 Table 6.19: Views and Perceptions of the Respondents on Empowerment of LBs and Local Peoples to Undertake Local Development Activities ...... 237 Table 6.20: Views and Perceptions of Respondents on Partnership among different Stakeholders ...... 241 Table 6.21: Views and perceptions of the Respondents on Co-ordination among different Stakeholders ...... 243
LIST OF BOXES
Box 5.1: Too Many VDCs to Manage and All Only Talking about Decentralization ...... 144 Box 5.2: Lack of Financial Autonomy to LBs ...... 145 Box 5.3: Responsibilities and Capacity Building of LBs should go Hand in Hand ...... 146 Box 5.4: Problem of Dual Responsibility of Accountability and Reporting prevailed in District based Government Line Agencies ...... 151 Box 5.5: Locally Elected Groups shouldn't replace LBs for Local Service Delivery and Co-ordination ...... 158 Box 5.6: Ground Reality about Sectoral Devolution of Health Services ...... 163 Box 5.7: Hierarchy of Heads of Government LAs hinders the Sectoral Devolution ...... 164 Box 5.8: Who are really benefiting from Donors Resources and Supports ...... 169 Box 5.9: State of Formulation and Implementation of Code of Conduct in DDC for Local Service Delivery ...... 171 Box 5.10: No Co-ordination and Internalization of all Capacity Building Initiatives Supported by Donors and INGOs ...... 173 Box 5.11: Mockery of Transparency and Accountability System ...... 174 Box 5.12: NGOs and CSOs lack ability and willingness to engage themselves ...... 175
xxii Box 5.13: LSGA - A Failed Initiative to promote Social Justice ...... 179 Box 5.14: LSGA - Waste of Scarced Resources ...... 179 Box 5.15: Too much Political Interference hindered Local Development ...... 180
Box 6.1: Deprived from Access to Local Resources ...... 211 Box 6.2: What comes First: Meeting Allowance for the Elected Representative or Development for the Poor Villagers ...... 231 Box 6.3: Unheard Voices of a Poor Woman...... 233 Box 6.4: Political Interference prevailed everywhere ...... 234 Box 6.5: Huge Gaps persist in between Act Promulgation and Implementation ...... 236 Box 6.6: Nepal Lacks Visionary Leaders for the Development of the LBs ...... 238 Box 6.7: Power hungry Political Party Leaders and Central Bureaucracy ...... 239 Box 6.8: Mockery of the Principle of Decentralization and Local Governance ...... 240 Box 6.9: Co-operation and Partnership from Top to Grassroots Level - Mere Slogans ...... 246
LIST OF FIGURES
Figure 1.1: Conceptual Framework for Policy, Legal, Institutional/Structural, Fiscal and Operational Dimensions for creating just and Inclusive Democratic Governance ...... 31
Figure 4.1: Overall State Structural Framework of Present Nepal ...... 108
xxiii WORKING DEFINITIONS
Absolute poverty: A person living in absolute poverty is not able to satisfy his or her minimum requirements of food, clothing or shelter.
Access: Access is enabled in an environment that encourages and falilitates peoples to utilize service providers to reach the peoples within any given social context. It is dynamic and participatory, promotes inclusion and empowerment and advantageously uses local knowledge, perceptions and values to enhance awareness and understaning.
Accountability: Making development interventions or programmes more responsive to the needy peoples they seek to assist. It is also used by the donor community to make sure that the funds are used for the purpose for which it was intended.
Bottom up: Development interventions, which come from the grassroots or communities as opposed to the government planners or development agencies.
Capacity building: It differs from the capacity development. Capacity building builds on a pre-existing capacity base. Its aim is to help governments, organizations and peoples attain a level of self-sufficiency that enables them to efficiently manage their own affairs.
Capacity building/development: It is the progress by which individuals, groups, organizations, institutions and countries develop their capacities individually and collectively to perform functions and solve the problems to achieve developmental objectives.
Civil society: It is a complexly contested term usually referring to all peoples, their activities and relationships that are not part of the process of government. Furthermore it denotes a public space between the state and the individual citizens in which the latter can develop autonomous, organized and collective activities of the most varied nature (White, 1994). An effective state and a vigorous civil society are mutually supportive. The state has a critical role with respect to civil society first in providing a functioning and accessible legal system and in ensuring the existence of a legally protected ‘public sphere’ where civil society can develop with no undue interference. Without a vigorous civil society the state is narrowly based and susceptible to capture by political and economic opportunities.
It encompasses non-governmental and non-profit organizations such as civic groups and associations, co-operatives, user groups, modern interest groups and traditional organizations, formal organizations and informal networks, political (advocacy groups) and non-political, social movements and community based organizations.
xxiv Decentralization: It can be understood as a transfer of legal and political authority and/or responsibility of performing certain functions from the central governance level of an institution to the lower or private/non-governmental organizations. The concept of decentralization may be broadly divided into different forms such as de-concentration, delegation, devolution and privatization.
De-concentration: It involves merely shifting of workload from central government ministry headquarters to staff located in offices outside of the national capital.
Delegation: It refers to the transfer of authority to public corporations or special authorities outside the regular bureaucratic structure. It involves deciding which functions to shift from the central government to semi-autonomous which implies the transfer or creation of a broad authority to plan and implement decisions concerning specifically defined activities
Denationalization: It refers to selling or giving away to the public or to workers the government owned assets or enterprises meant for the production of goods or services by extension, this form of privatization encompasses de-municipaliszation and other forms of de-stratification. The main thrust of the neo-liberal school of thought argue for the role of NGOs, self-help groups and private sectors to initiate social change through the demolition of the redistributive strength of the welfare state.
Devolution: It is generally understood as ‘the most extensive form of decentralization involving creating or strengthening independent levels and units of government through the direct assignment of decision making responsibility. It describes ‘the increased empowerment of LOs with no direct government affiliation. It implies granting authority or decision making power to the local governments that have clear and geographically recognized boundaries and have the power to secure resources to perform their functions.
Donors: It usually refers to the development agencies such as the UK’s Department for International Development (DFID) or United States Agency for International Development (USAID) of US Government or to multilateral agencies such as the World Bank, but also includes INGOs who fund partner organizations in the countries where they work.
Diversity: The concept of diversity encompasses acceptance and respect. It means understaning that each individual is unique and recognizes individual differences. These can be along the dimensions of race, caste, ethnicity, gender, sexual orientation, socio-economic status, age, physical abilities, religious beliefs, political beliefs or other ideologies.
Empowerment: It refers to the transformative potential of the peoples to achieve positive changes in their lives by asserting their rights as women, children or citizens etc usually by group action, and thereby gaining greater power to solve the problems. In other words, it is an
xxv expansion of assets and capabilities of peoples toengage with, influence and hold accountable the peoples and institutions that affect their lives.
Enabling environment: Structural environment that recognizes and reinforces mutual rights and obligations. It is made up of inter-related conditions necessary for fostering just societies. They are: good governance, sound legal, regulatory, political and institutional frameworks, pro-poor policies, institutionalized mechanisms for transparency and accountability and strong civil society participation.
Equity: Impartial or just treatment requiring that similar cases be treated in similar ways.
Gender equity: The condition of justice in relations among the genders leading to a situation in which individuals enjoy equal rights, status and opportunities.
Good governance: It can be seen as the exercise of economic, political and administrative authority to manage a country’s affairs at all levels. It comprises the mechanism processes and institutions, through which citizens and groups articulate their interests, exercise their legal rights, meet their obligations and mediate their differences.
Human conditions: Aspects of quality of life well-being and opportunities. These include the necessary material conditions for a good and healthy life including secure and adequate livelihoods, access to health, education, security, shelter, goods and services.
Human capital: Factors such as knowledge, skills and health, which increase the productivity of an individual.
Institutional building: It is a creation, development and linking of certain functions to accomplish specific tasks within the institutions.
Janajatis: Janajatis denote the communities or peoples having their distinct cultural identities, own language, religion, custom and culture, whose traditional fabrics are based on equality, who have their own geographical and demographic areas in the country, who have written and/or oral histories of their own, who have the notion of ‘we’ or ‘us’, who have no pivotal or decisive role to play in the polity and administration exercise of the modern Nepal, who are indigenous or native peoples of Nepal; and who call themselves ‘Janajatis’ or ‘ethnic peoples’.
Line agencies: The government line agencies are those ministries and their implementing agencies involved in development activities, which have a presence in all districts and the field level.
xxvi Local bodies: It refers to the locally elected government bodies encompassing the village development committees (VDCs), district development committees (DDCs) and municipalities. But the central authority doesn't want to call them as 'Local Government' but prefers to call them as 'Local Bodies'.
Local governance: It comprises a set of institutions, systems, mechanisms and processes, through which every citizen and their groups of a country can articulate their interests and needs, mediate their differences and exercise their rights and obligations at the local level. The building blocks of local governance are many. For the purpose of this study, it includes: local peoples' participation in socio-economic and political spheres for their development, partnerships and co-ordination among the key actors at the local level, capacity enhancement of the local actors across all sectors, multiple flows of information and institutions with transparency and accountability with pro-poor orientation.
Local development programme: It is an integrated and iterative approach that establishes relations between different elements such as i) reforms (political, administrative and fiscal decentralization, land reforms), ii) local capacity and institutional development and iii) local governance (stakeholders’ empowerment, promoting the local economy and improving local social governance for delivery of services). The synergy among these elements can create sustainable livelihoods, which in turn can contribute to poverty alleviation.
Local Organizations: Decentralized management of resources, local governance and local development action requires the presence of effective LOs. Existing legislation of Nepal provides operational responsibilities of LOs which, for the purpose of this study, would include NGOs, user groups, private sector and other CSOs.
Marginalized: Excluded and discriminated against but more than being poor or a minority. It results in being pushed to the margin because some peoples refuse to acknowledge one’s basic rights, needs, beliefs, preferences and concerns.
Non-governmental organizations: It refers to the organizations created by a group of like- minded peoples or civil society members with the purpose of social development or welfare without taking profit. The common characteristics of NGOs are lack of a profit motive, being development or welfare oriented, being politically neutral and democratic in character.
Participation: It is used to describe greater involvement by ‘beneficiaries’ in deciding the type of development projects they need and how they are being run. The degree of this involvement can, however, vary greatly.
xxvii Poor: A state of being without, often associated with needs, hardship and lack of resources across a wide range of circumstances. Being poor implies being deprived of essential goods, services and basic needs and above all, the basic rights.
Social capital: Features of social organizations such as networks and values including tolerance, inclusion, reciprocity, participation and trust that facilitate co-ordination and co- operation for mutual benefit.
Social development: It is a new term used to describe the ‘softer’ elements of the development process as distinct from economic and technical issues such as education, healthcare, human rights etc.
Social exclusion: It is understood as a process away from social inclusion. It describes the process, which leads to individuals or groups being wholly or partly excluded from the full participation of the development initiatives or activities.
Social inclusion: It is a process by which efforts are made to ensure that everyone regardless of their experiences and circumstances can achieve their potential in life. To achieve inclusion, income and employment are necessary but not sufficient. An inclusive society is also characterized by a striving for reduced inequality, a balance between individuals’ rights and duties and increased social cohesion.
Social justice: Equitable access to socio-cultural, political, educational, economic, legal and other basic human rights. An ideal condition in which all members of a society have the same basic rights, security, opportunities, obligations and social benefits.
Social movements: It refers to groups around the world taking issue-based action in a variety of areas such as human rights, environment, access to land, gender rights, peace etc usually local without outside assistance at least in the first instance.
Social postion: Peoples’ position in society and their ability to live in dignity. To improve social position one must focus on changing the nature and direction of systemic marginalization by eliminating the barriers that underpin exclusion, inequality and powerlessness.
Sustainability: It is a desire by planners and developmental agencies to avoid creating projects, which depend on their continued support for success, also used in its environmental sense to ensure renewal of natural resources.
xxviii Transparency: It basically promotes an ‘open society’ where any kind of public and private action or behavior is not hidden. It enhances the quality or effectiveness of public policy making through open debate and it also commands general public acceptance.
xxix CHAPTER ONE
INTRODUCTION
1.1 Concept of Decentralization and Local Governance
Historically, it was assumed that the job of governing nation-states was solely the responsibility of the government. It was an established belief in many countries that the central government authority can do the job best ways. Over the past fifty years or so in different societies around the world, the responsibility of the state has been organized differently. With growing disenchantment of the ordinary people with institutions of the governments, declining capacity of these institutions to respond to diverse interests and expectations of their populations, increasing gap in the government policies and their practical elaboration, growing distance with and alienation of the poor and marginalized from the elite-dominated institutions of governments, continued persistence of problems of social exclusion and marginalization in many countries around the world, and growing importance of national and trans-national private business interests, globalization that increased civic awareness and consciousness, the very concept and understanding of government has now been changed to the concept of governance. It, therefore, implies that governance in a given society is not just the responsibility of governments. Governance becomes the joint obligation of ordinary citizens and all other state actors in a given society. Over the last decades, the whole world scenario had been changed and steps are now taken to devolve the power and authority of the centre to the regional and local units of governments to ensure and create opportunity for common peoples' participation in state governance. Decentralized local governance or power sharing among different stakeholders is therefore an important element of good governance and good governance contributes to the social inclusion and poverty reduction. Hence, there is a close relationship among decentralization, good governance, social inclusion and poverty reduction.
In 1970s, the onset of the shift of emphasis from the central level authority to local authority was observed in Asia, Latin America and Africa (Rondinelli et al, 1983). There were mainly three reasons for such shifts, i) disillusionment with the centralized planning and control of development activities, ii) clamour for new ways of managing development initiatives brought about by emergence of growth-with-equity strategies, and iii) growing realization of the increasing difficulties in managing development plans and programmes as society became more complex. In addition, new factors such as globalization emerged that has increased the awareness of peoples which created
1 opportunity and growing demand for participation in governance mechanisms. Changes in perception of donor agencies in support of better governance with the local participation and autonomy have, no doubt, also contributed to promote decentralization and other reforms.
Decentralization is, no doubt, a long process and manifests itself in various forms and formats. The debate on whether decentralization is 'good or bad' is simply unproductive as decentralization is a political reality. It should be noted that no matter whether a county adopts a federal or unitary or centralized system of governance, decentralization has been adopted in one or another form in almost all countries around the world as a complex social experiment. Their selection and use would mainly depend on geographical composition of the particular states, population, condition of development infrastructures, social and culture norms, values and assumptions and of course the level of civil consciousness.
1.2 Decentralization Elsewhere in the World and Nepal
Over the past few decades or so, decentralization has become one of the most contested policy discourses throughout both developing and developed countries around the world. It has been the central theme to the development efforts of many countries. It is also in the foreground of policy discourse in the US, UK and EU (Faguet, 2005).
During the period following the World War II, particularly during 1960s and 70s, many countries, both developed and developing, embarked upon a strong centralization of government policy and functions. Thus, the development theorists and practitioners then searched for alternatives to a central state and the concept of people’s participation has played a crucial role. It had begun to receive widespread attention in the late 1970s and early 80s. Consequently, there was a shift of emphasis from the central authority to local authority, which was observed in Asia, Latin America and Africa in the 1970s (Shah, 1997).
The new development paradigm that has emerged seems to have found acceptance in a number of venues including the institutions in the UN systems and the World Bank. The emphasis on the new development paradigm was based on the people’s participation, decentralization of decision-making processes, targeting the poor, creation of specific policies on health, education and micro-enterprise development that would reduce the state interventions. This paradigm of development combines the roles of the market and
2 the community at the same time it calls for the withdrawal of state through the process of decentralization (Agrawal et al, 1997). Decentralization and autonomy increase the level of peoples' participation in governance thereby decreasing the level of mal- administration, mis-management, corruption and consolidating democracy. South Asian countries have also been practicing provincial/state system of governance to manage autonomy and decentralization.
Although political forces have largely driven decentralization around the world, the most countries have adopted different inter-governmental structures, proceeded at uneven paces and adopted a wide range of implementing strategies. This diversity is not surprising as countries around the world greatly differ in geographical size, history, population, economic structure, and political and institutional dynamisms all of which influence the form that decentralization can and should take.
Some of the experiences highlighting the decentralizing trends, state structures for power sharing and fiscal decentralization from other countries are presented as follows:
1.2.1 India
Economic reforms and local institutions (Panchayats and Municipalities) have been the two major policy imperatives since the early 1990s in India. For both, it is not so much the necessity of the policy directive but its content and underpinnings that are being debated.
Direct local democracy has been mandated constitutionally through the 73rd Amendment Act (1992) for Panchayats and the 74th Constitution Amendment Act (1992) for Municipalities. These two amendments have come to present what is seen as by far the boldest experiment in India with decentralization and empowerment of local institutions.
Until the incorporation of these two amendments in the Constitution, decentralization and empowerment of the local institutions were understood in terms of establishing democratically elected governments at local levels and assigning them such powers and responsibilities as would enable them to function as institutions of self-government. The main assumption in this concept was that the democratically elected governments compared to other forms of government were in a better position to assess the needs and development priorities of the areas that they represented and provide an outcome that was closest to the preferences of the local peoples.
3 India is a Union of 28 states and 7 territories directly administered by the union or central government. Local governments in India until the Constitutional amendments were an exclusive concern of the state governments. The subject of state government formed a part of the state list after making provisions in the Constitution. Then the state government determines the expenditure responsibilities and fiscal powers and authority of the local governments and defined the degree of autonomy within which they could function. These two major amendments, basically, have changed the existing relations between the state governments and local governments taking the country towards democratic decentralization and empowering the local governments. The amendments maintain that the legislature of a state will continue to have powers to endow the Panchayats and Municipalities with such a power and authority as it may consider necessary to enable them to function as institutions of self-government (Mathur, 2001).
In any decentralization policy, there are many elements which affect the overall process of decentralization. Here an attempt is made to deal on issues related to the state structures for power sharing and fiscal decentralization.
It is extremely crucial to set up appropriate expenditure and tax assignment and other revenue sharing powers for fiscal decentralization in every level of governments. From the point of view of theory and practices, it is important to specify the expenditure responsibilities as clearly as possible in order to promote accountability, transparency, to reduce unproductive overlap, avoid duplication of authority and legal challenges. It should be noted here that two schedules namely the schedule XI (Article 243G) related to Panchayats and schedule XII (Article 243W) related to Municipalities have been incorporated in the Constitution. The schedule XI (Article 243G) comprises the functions related to agriculture, land improvement, implementation of land reforms, land consolidations and soil conservation, minor irrigation, water management and watershed development, animal husbandry, dairying and poultry, fisheries, social forestry and farm forestry and small scale industries including food processing industries. Moreover, it comprises the rural housing, cottage industries, drinking water, maintenance of community assets, welfare of the weaker sections and in particular of the scheduled tribes and castes, social welfare including welfare of the handicapped and mentally restarted, women and child development, health and sanitation including hospitals, primary health centers and dispensaries, markets and fares, cultural activities, public libraries, adult and non-formal education, vocational education including primary and secondary schools,
4 rural electrification including distribution of electricity, roads, culverts, bridges, ferries, waterways and other means of communication and fuel and fodder.
Similarly, the Schedule XII (Article 243W) related to Municipalities comprises the functions related to the urban and town planning, regulation of land use and construction of buildings, planning for economic and social development, roads and bridges, water supply for domestic and industrial and commercial purposes. In addition, this schedule is also related to the public health, sanitation conservancy and solid waste management, fire services, urban forestry, protection of the environment and promotion of ecological aspects, regulation of slaughterhouses and tanneries, public amenities including street lighting parking lots, bus stops and public conveniences, vital statistics including registration of births and deaths, prevention of cruelty to animals, burials and burial grounds, promotion of cultural educational and aesthetic aspects, provision of urban amenities and facilities such as parks, gardens and playgrounds, urban poverty alleviation, slum improving and upgrading and safeguarding the interests of weaker sections of society including handicapped and mentally retarded (Rao, 2000).
During the past 12 years or so, India has witnessed a substantial progress in promoting decentralization and local governance. As per the Constitutional provisions and the state laws, elections to Panchayats and Municipalities have been held in over 90% of the rural and urban constituencies. About 2.6 million persons of which 33% are women have been elected to the Panchayats and over 63,000 persons have been elected to the Municipalities creating what would be the largest democratically elected base to be observed anywhere in the world. In 12 states, district planning committees have been constituted and made responsible for the consolidation of plans prepared by Panchayats and Municipalities.
The main issue related to the decentralization agenda in India is the division of the functional and fiscal powers and authority between the state and local governments. The nature of the functional responsibilities that is devolved to the local governments combined with their assigned fiscal powers determines the extent to which a country stands committed to decentralization and local governance. One should note here that the fiscal relations between the 28 states and over 3,500 municipalities and 230,000 Panchayats in India are hugely diverse and complex with much of it rooted in the Constitution itself, which lays down neither a functional domain nor a fiscal jurisdiction for local governments. These details are defined by the state governments and coded in state laws. The state governments, out of its own powers and responsibilities enumerated
5 in the Constitution, assign certain roles and responsibilities to the local bodies. These have consisted of public health and sanitation, roads and bridges, water, fairs and markets, museums, libraries and similar institutions and burial and cremation grounds.
Similarly, the state governments determine the fiscal options of the local governments. The state laws specify the taxes that the local bodies can levy and collect. The state governments, out of its own tax powers, devolve certain tax powers to the local governments. However, the administration of local taxes is unsatisfactory and reflected in low collection of demand ratio, inability of the local governments to adjust the property values periodically, tax rates and user charges to inflation.
Beyond the creation of the democratically elected local institutions at the level of the Panchayats and Municipalities, the progress on decentralization in India has, at best been very slow. Firstly, no worthwhile decentralization of powers and responsibilities had occurred. There exists no evidence that powers and responsibilities of the local governments have been expanded in accordance with the Schedules XI and XII. Far more disconcerting fact has been that the absence of clarity in respect of the functions of local governments.
Although the state governments have enacted the conformity legislations incorporating the provisions of the Constitutional amendments, the formulation of rules and bye-laws to put those provisions into practice has lagged behind.
1.2.2 China
Although China's lack of democratic institutions may be seen as an impediment to decentralization, the country has some history of sub-national authority because its size has made the central control even more difficult. Particularly, the provinces have long been enjoying some degree of administrative and fiscal autonomy.
Structurally, China has four levels of sub-national governments. They are: First level: provinces (22), autonomous regions (5) and large cities (4). Second level: Prefectures and cities (300). Third level: Counties (2,100) and, Fourth level: Townships (44,000+).
China has created a number of autonomous regions often in areas of special political, historical or ethnic significance. It has a de facto de-concentration of functions to sub- national authorities that remain substantially accountable to the centre. China's decentralization policy focuses mainly on de-concentration to provinces and larger cities,
6 though lower levels have larger public expenditure role and elements of de facto devolution have emerged in some areas but provinces have considerable regulatory control over lower levels (Smoke, 2005).
China has the weakest formal basis for decentralization because inter-governmental changes have occurred mostly through economic reform. They have no constitutional/legal framework for decentralization. Inter-governmental fiscal relations lie largely on a complex system of bargaining between higher and lower level authorities. Since 1994, a number of reforms and legislative changes have clarified the fiscal responsibilities of different levels of government. The most relevant reforms include the Tax Sharing System (1994), Comprehensive Fiscal Reform (1994) and the Budget Law (1995).
According to the Budget Law, there are broad divisions of functions between central and local governments but it doesn't disaggregate local categories. The result is concurrent assignment and significant variation across regions. Sub-national governments have heavy safety net responsibilities including pensions, unemployment and social welfare which are unusual sub-national responsibilities. The centre sets broad expenditure guidelines and sub-national governments account for around 70% of public spending with the country level accounting for more than 40% (World Bank, 2002a).
There are no provisions for formal sub-national government's own-source revenues except for a limited set of user fees and charges. However, there are some provisions for sharing national revenues with the sub-national governments which are as follows:
Table 1.1: Details of Revenue Sharing Share of sub-national S No Particulars governments (%) 1 Value Added Tax 25 2 Income tax on enterprises 40 3 Tax on personal incomes, natural resources, non-plan 50 construction, salt, security and exchange 4 Taxes on non-VAT sector businesses, urban maintenance, urban land use, vehicle use, property 100 entertainment and other business related taxes Source: World Bank, 2002a
7 Because, decentralization in China was essentially a by-product of economic reform, it lacks a formal strategy and policy to manage it. The central ministries manage it through routine interactions with sub-national governments.
It can be concluded that China has the weakest legal framework with only a few laws that refer to sub-national governments' roles. The nature and degree of development of the enabling framework do not seem to affect decentralization process or quality. China's focus remains on de-concentration rather than devolution of power and authority to sub- national governments.
1.2.3 Indonesia
Although political forces have largely driven the decentralization in East Asia and most countries face similar reform challenges, Indonesian decentralization experiences are far from uniform. They have adopted different inter-governmental structures, proceeded at uneven paces and adopted a wide range of implementation strategies. Indonesia had elements of decentralization during its Dutch colonial period. As in many ethnically diverse countries colonized by European powers, building national unity through greater centralization was the goal after independence. Weak attempts to decentralize in the 1970s and 1980s did not gain political momentum. The decentralization legislation in 1999 was a direct response to the economic and political crisis of 1997 and a perceived need to hold the diverse and tenuously unified country together. The reform devolved power primarily to sub-provincial governments largely because of fear among national leaders that empowered provinces could fuel regional ethnic and political conflicts leading to further separatism or federalism. The government revised the initial decentralization framework legislation in 2004.
Indonesia’s governmental system is based on a democratic republic set up which is complex in nature. Indonesia directly elects the regional people’s assemblies at the local and provincial levels. Under the Law 32 of 2004, sub-national leaders such as Governors and Mayors are directly elected and can be removed with the cause by the ‘Regional People’s Assemblies’ subject to higher level approval. People’s Consultative Assembly elected the President until direct election in 2004.
In Indonesia, the sub-national government has three levels of administration. They are: First level: provinces (33), special regions (2), and capital city (1), Second level: Kotamadya (cities) and Kabupaten (districts - 440), and Third Level: Desa (villages).
8
Indonesia follows the most centralized tax systems. Sub-national governments have broad functions and receive substantial intergovernmental transfers from the centre as they have limited revenue authority. The centre focused on substantial devolution to cities and districts, which replaced earlier emphasis on de-concentration to provinces, limited formal role at the lowest level. It has increasingly developed the legal framework, most notable the Laws 32 and 33 in 2004, but functional responsibilities and sub-national revenues require further elaboration and regulation (Smoke, 2005).
Indonesia follows a two-way process of inter-governmental transfers. The process involves two transfers namely general-purpose and specific-purpose. In all, the transfers made by the central government account for 65% of expenditure at the provincial level and 70% at the district level. General-purpose grants are subject to some broad guidelines set by the central government. These general-purpose transfers involve provincial development grants, district development grants, village development grants and less-developed village grants. Both the provincial and local governments are provided with specific-purpose transfers to finance primarily for education, health, transportation, re-forestation and conservation (Poverty Reduction and Decentralization, 2002)
The recent revisions to Law 32 of 2004 expanded the central control over the budget and civil service decisions. Sub-national budgets require formal approval rather than legality review and authority to hire and fire sub-national civil servants has been significantly recentralized. Indonesia assigns to provincial and district and city governments a share of revenues from selected taxes. Provinces have uniform tax rates and share the revenues with the lower levels. Shared taxes account for about 32% of provincial and 20% of local income but Law 33 of 2004 increases tax sharing, particularly on selected natural resource bases. Local governments exercise control within national ceilings only over a limited set of taxes, many of which are holdovers from the pre-reform era. Both provinces and local governments collect user charges. Law 34 of 2000 allows new local sources but it led to the adoption of some problematic local tax and non-tax revenues and is slated for revision. Overall, own source revenues account for about 35% of provincial and about 6% of local income although the latter average masks stronger performance in larger urban areas.
9 Indonesia has adopted transparency frameworks but they do not always function well. The budget documents are supposed to be public and external audits are conducted although not always on schedule because of the capacity constraints in higher-level departments. The revised Constitution guarantees freedom of information and a new anti- corruption law requires access to information. However, bureaucratic barriers make exercising these civic rights more difficult.
Indonesia has established special bodies to guide the decentralization. Its regional autonomy review board composed of minister level members played a significant role in setting the initial direction of decentralization policy. With a basic legal and institutional framework for decentralization now in place, key national ministries have assumed principal responsibility for detailing and implementing broad policy parameters. The Ministry of Home Affairs plays the strongest official role and the Ministry of Finance and National Planning Agency provide key inputs in specific areas. Sectoral ministries are also helping to develop regulations for decentralizing services. Weak co-ordination and inter-ministerial competition like in Nepal remain significant problems. Although the Home Ministry is technically in charge, it has limited authority over other ministries with important decentralization roles (www.worldbank.org).
1.2.4 Colombia
Colombia was traditionally a highly centralized country with Mayors and Governors directly appointed by the central government. Governors in particular were the President’s main person to carry out President’s orders in the regions. Decentralization in Colombia meant the replacement of appointed governors by elected ones. Decentralization in Colombia developed over the years as a much more gradual and through incremental process which has taken place in three broad phases.
First, it began in the late 1970s and early 1980s by including a number of fiscal measures aimed at strengthening the municipal financing. This gave the municipalities an increased power to collect taxes including the sales tax and established parameters for investment of these funds.
Phase second began in the mid 1980s and was more concerned with the political and administrative measures. The most important of these measures were the regulation of popular election of Mayors and sought to promote popular participation of local peoples in decision-making. The Constitution of 1991 envisaged the reforms such as citizen’s
10 initiatives, municipal planning councils, the provision to revoke Mayoral mandates and popular consultation to further consolidate the political and administrative decentralization.
The third phase regulated the Constitution and other fiscal and administrative reforms. It gave more responsibility to the municipalities for the provision of public service delivery, social investment and provided significant additional resources by increasing central government transfers to the local governments. It mandated that the bulk of transferred funds should be spent on education and health with little discretion left to the local government. Automatic transfers to the regional governments rose from about 20% to over 40% of the total government spending (Faguet, 2005).
The aggregate effect of more than two decades of political and fiscal reforms in Colombia was a large increase in the authority and operational independence of municipal governments accompanied by a huge rise in the resources they controlled. This rise was due to entirely increased investment while running costs remained stable over the period.
A full decentralization, in Colombo, was rolled out throughout the country in 1993. The earlier attempts on decentralization and local governance processes in 1970s and 80s were considered as ‘piecemeal’ nature of decentralization. Focusing on the decade that begins with 1993 allows us to examine the full process as it evolved and the full implications of these deep reforms took hold. Assuming that 1993 represents the end of the centralized regime, we can say that under decentralization, the investment in social services and human capital formation increased significantly.
In Colombia, decentralization has made government more responsive by re-directing public investment to areas of greatest need towards poorer districts and it made investment much more equitable across the space. Investment of public funds shifted from economic production and infrastructures to social services and human capital formation. It is impressive that these shifts in national investment aggregates were driven by the smallest, poorest municipalities investing newly devolved functions and resources in their highest priority projects. Decentralization created hundreds of local governments throughout the country which proved more sensitive to local conditions and more accessible to lobbying and grassroots pressure than the central administration that simply abandoned large expanses of territory as convenience dictated. Decentralization and local governance approach engaged thousands of neighborhood councils, peasant
11 communities, different interest groups and business associations that previously had no voice in how their communities were run. By allocating resources and political power in municipal institutions it reached out to rich and poor peoples alike giving them the means and resources to improve their lives and a concrete incentive to true participation.
In Colombo, the decentralization reform changed not only the form of government but also its substance. Those central government officials stationed beyond national and regional capitals before decentralization had a little incentive to concern themselves with local demands. The professional career success of the government personnel was determined by the ministers unrelated to the local outcomes in distant districts. Business interests and the rich elites might eventually hope to gain some favors from the centre but throughout the poor peoples' concerns and issues were effectively shut out. Decentralization and local governance changed this by creating local authorities beholden to the local voters. Throughout the national territory, it put real power over the public resources in the hands of the ordinary poor peoples and it changed the way the country was being managed.
From the Colombian experience, we can conclude that decentralization means devolving resources, responsibility and authority from higher to lower level of government. It also implies that the direct involvement of higher level must be scaled down. The number of central government personnel must be reduced as they are transferred to regional and local governments.
Another lesson learnt from Colombian experience is that we must devolve significant tax raising powers to the local governments. By doing this, the local governments can generate the financial as well as technical resources they would require to undertake different projects and programmes in their respective jurisdictions.
1.2.5 Nepal
Nepal has gone through a long process of so-called decentralization although it seemed to have been motivated by the fulfillment of the wishes of elite rulers in the name of simplifying in administration rather than public utilities and service delivery to the people as well as empowering them. It was perhaps a first ever step towards giving some authority that the Kathmandu municipality had given a very limited responsibility to look after some judicial and sanitation activities through an order in 1919 (Dhungel et al, 2003). Thereafter, some form of administrative decentralization had begun in the country
12 as the geography and remoteness has also pose special challenges for effective service delivery.
In theory, the regimes even before and during the autocratic Rana rule, due to the topographic realities of the country, realized that it was necessary to delegate a certain amount of authority in order to govern the state efficiently. Thus, even for the centralized regimes it was necessary to delegate certain amount of authority to individuals near and dear ones to the regimes in areas not easily accessible to have control over the country.
From the development perspective, it was initiated only after the inception of the democratic system in 1951. The first attempt in this respect was made in 1952 with the introduction of the Tribhuvan Village Development Programme. Thereafter, several other attempts were made during the partyless Panchyat regime through the formation of different task forces, Committees and Commissions to expedite the so-called decentralization processes in the country.
Many government publications and reports have highlighted the major features of the legal and policy frameworks of the decentralization exercises and processes. The 1962 Constitution of Nepal emphasized the decentralization of Panchyat system by creating Chief District Officers (CDOs). Thereafter, Local Administration Act (1965), District Administrative Plan (1974), Integrated Panchayat Development Design (1978), Establishment of Ministry of Local Development (1980), Merger of Panchayat and Local Development Ministries (1981), Decentralization Act (1982), Decentralization (working management) Rules (1984), DDC, VDC and Municipality Acts and Rules (1992), Decentralization Co-ordination Committee (1996) and Local Self-Governance Act and Regulation (1999) are the major legal and policy frameworks that created and emphasized the promotion of the decentralization in the country (Shrestha, 1999).
The importance of decentralization was emphasized in both 9th and10th development plans of government. The 'Interim Constitution - 2006' also highlights the opportunities for maximum involvement of the local people in affairs of governance and sharing of benefits of democracy. It is also reflected in recently formulated 'Three-Year Interim Development Plan' covering a period from 2007 to 2010. It has again emphasized on strengthening of LBs to make the entire decentralization process more effective.
13 In 1990, the new Constitution of Nepal restored the multiparty democracy and specified decentralization as a directive principle and policy of the state. It defined the decentralization as devolution of 'power and authority' to the local bodies1 (LBs) for the peoples to govern by themselves. Thus, for the purpose of this study, the decentralization process can be divided into two phases. First phase being a period of partyless Panchayat system between 1960 and 1990 and after the restoration of democracy in 1990 to 2006 as second phase. A series of Acts and Regulations culminating in the Local Self Governance Act (LSGA) 1999 and Local Self Governance Regulations (LSGR) 2000 furthered the policy and regulatory frameworks for political, fiscal and administrative decentralization but it is silent on market decentralization which is one of the major components of the decentralization. Decentralization experts reiterate that the LSGA and LSGR of the government have attempted to give Nepal's decentralization process new impetus but it also has many serious flaws and weaknesses which have failed to devolve the real 'power and authority' to the LBs and the poor and socially excluded peoples.
However, as Gurung (2002) says that the decentralization has been an incessant theme over the last five decades. This has evolved as per the wishes and rationale of successive rulers. Rana rulers had taken it for the cosmetic purpose whereas the Panchayat rulers used it to sustain the elite power base within their own circles and present democratic set up after 1990 peoples' movement has been using it in the name of good governance. Thus all the past initiatives on decentralization and good governance remained on the bedrock of the highly centralized governance mechanism of the country. Even today, there is no evidence that the central government and entrenched bureaucracy are becoming amenable to some form of local autonomy.
Compared to decentralization processes in some of the south-east Asian countries, India and China, Nepal is one step ahead in formulating rules and regulations in relation to decentralization and local governance. Despite these, among many other factors, the root cause of the poor governance has been identified as the absence of safeguards to ensure that government is representative and accountable to the public for its performance. All three major bodies such as executive, legislative and judiciary of the state are very weak
1 It refers to the locally elected government bodies encompassing the village development committees (VDCs), district development committees (DDCs) and municipalities. The central authority (LSGA - Section 2a of part I as well) doesn't want to call them as 'Local Government' instead they prefer to call them as 'Local Bodies'. The Constitution of the Kingdom of Nepal (1990) published by Law Books Management Board, Ministry of Law and Justice and Parliament Affairs, also uses the term as 'Local Authorities' (Article 46c) not as 'Local Government'.
14 and ineffective. The executive lacks political vision and farsightedness, the legislative is ineffective and the judiciary is inefficient and ineffective as well. In such a situation, weak governance adversely and directly affects political and civil rights, particularly so for the poor and socially excluded groups. The political system has failed to provide opportunities for all peoples including the poor and socially excluded peoples and NGOs, civil society groups and private sector have also failed to organize and influence the state policy and practice in order to guarantee the equitable and universal provision of effective basic services to the peoples (ESP, 2001).
The Nepalese history of the past 240 years or so is thus characterized by a process of state consolidation and power centralization. Some attempts towards relaxation of rigid state control through delegation of power were carried out only during the sixties and seventies. But they failed owing to the fact that the partyless authoritarian panchayat rule allowed no rooms for realization of democratic freedoms, social inclusive and accountable governance. The monarch occupied the centre stage as a source of all executive, judicial and legislative powers and authority. As the party-less polity was a centralized monocratic system; the initiatives towards decentralization only resembled a curious mix of restrained de-concentration and cautious delegation of power.
The following points further highlight why peoples' involvement and strengthening of LBs are essential components of decentralization:
i) The poor and marginalized people, who are at the bottom of the power ladder and not involved in decision-making processes but highly affected by the decisions made, should have every right to participate in this process. It is extremely vital to make provisions of involving them in the process of taking decisions on matters related to their fate and development. Their participation should be taken in a wider context like an opportunity to play a decisive role in decision-making on matters devolved upon the people that affect their lives.
ii) Until now, whether it is the government or donors or any other institutions or organizations, they have been playing the role of sole givers or support providers for the local development without any involvement of the local actors. The emphasis so far has been given on providing funds and supports to the local authorities for the local development and thus making them totally dependent on others without making the local communities capable and conscious to utilize the locally available means and resources.
15 iii) There could be different problems or issues or concerns of the local people which are so inter-linked. Thus, there is a need of total integration and co-ordination of different strategies, plans and programmes for the empowerment of the local peoples for sustained local development. iv) In order to have a strong and sustained base of the central government, the local authorities must be strengthened to enable them to manage and undertake their roles and responsibilities. These institutions should be efficient and be able to stand on their own in a manner that enables them to identify the needs of the local people, determine their goals and objectives, formulate strategies, plans and programmes, and mobilize local means and resources accordingly.
v) It is extremely important that the poor and excluded people must be involved to the entire process of decentralization so that all of them can take the ownership of any roles, responsibilities and authorities entrusted to them. They must be represented to these decision-making and implementing bodies, and; vi) There could be a range of different non-governmental organizations (NGOs), peoples' organizations, users groups, civil society groups and private sector at both central and local levels. These organizations work for the common cause helping to promote social relations and sense of brotherhood. It also awakens the sense of responsibility that the work of the community must be done by members of the community by themselves. The promotion of awareness among the people at the local level helps to develop not only the local level authorities but the nation as a whole. All these organizations should be given due space to involve and contribute to strengthen the local level institutions as well as for the local development.
Experiences of above countries have shown that several conditions are required for successful decentralization and local governance. Some of them, among many others, are as follows:
Security of Existence: A foremost-required condition for a strong decentralization and local governance is the security of existence. Clearly, the local governments cannot perform properly and effectively if their existence is in jeopardy by the ability of authorities on higher levels of government to dissolve them easily at any time. Secure existence requires that members of local governments only be dismissed for specific, pre- determined, reasons and under formal procedures that require the dismissing authority to show that the dismissed person has violated the law.
16 Resources and Autonomy: The success or failure of decentralization and local governance efforts largely depends to a very large extent on the availability of sufficient resources and the possibility of using these resources autonomously. This requires the right of local governments to collect local taxes and fees and to get funds from the central government necessary for the execution of tasks and responsibilities transferred to them, the right to spend the resources without excessive prior control by the central government or higher level of government, the right to take decisions on local activities including the local development projects or programmes without undue interference by the national planning authorities and the line ministries, a sufficient and well qualified local staff and the right to appoint and dismiss such staff and technical support and advice from the centre. Accountability and Transparency: The local governments and their members should be accountable to the people who elect them. This requires transparency in governmental actions and the possibility to access relevant information such as budgets, accounts, plans and so forth. The local governments are also accountable to several authorities might create confusion and insecurity at the lower levels that would be detrimental to the idea of efficient administration.
Only well-defined responsibilities provide for the degree of accountability and transparency and security needed by authorities at the lower levels who have to make certain decisions on their own. Thus, a high degree of transparency in the relations between local governments and the supervising authorities is vital. There is also a need for transparency regarding all the financial transactions.
Strong Political Will and Partnership: Experiences from all over the world have shown that the success and decentralization and local governance efforts largely depends on a clear vision regarding the position and function of local governments and on al strong political will to implement the vision. It also depends on the willingness of both the central and the local level to see each other as partners in an on going process of decentralization and local governance.
Strong Legal Framework: Setting out powers, rights and duties of local governments clearly without a strong legal framework is often impossible to know who is responsible for what. This allows central governments to interfere easily with local level affairs and leaves the local governments with no possibility of stopping such unwanted interferences.
17 1.3 Rationale of Study
What sociologists study are the social aspects of political associations and the political aspects of other social associations. Political associations are of different kinds and they have not all received same attention from the sociologists and anthropologists as every political associations are also social associations in which human beings interact with each other in accordance with the rules that define their rights and duties. The study of national and local level politics shows the distinction between specific political associations and other social associations. The local level institutions such as VDCs, Municipalities and DDCs in case of Nepal function actively and sometimes decisively in the contest for power within and between each authority at every level of the political system which affects the power relations from the grassroots to the national level. So, the social scientists should also contribute towards the social change and study of state as well as the politics of the contemporary society.
Neipal is an inexhaustibly multi-cultural country. Since its emergence as a united nation in the late eighteenth century, the state's policies and laws have imposed Hinduism as the state's religion, Nepali as the national language and the culture and values of the dominant groups of the society. After the restoration of the multi-party democratic polity in 1990, the Constitution of the Kingdom of Nepal was promulgated within a short span of time by representatives of the leading political parties of the movement. Thus, there have been a number of shortcomings in the Constitution. Article 4 of this Constitution conceded that Nepal is a multi-ethnic and multi-lingual country but it declared Nepal as only a Hindu Kingdom. So far, Nepal as a multi-ethnic, multi-cultural and multi-lingual country in the Constitution has remained only in rhetoric as this Constitution limits the very rights of Nepal's numerous indigenous and economically backward groups whose combined population is more than 50% of the total population of the country (CBS, 2001). The state has used political suppression, military oppression, social exclusion and economic marginalization to undermine the development of Nepal's indigenous and marginalized groups. They have no decisive roles in politics, judiciary, executive, civil service and administration in modern Nepal (Baral, 1993, Hachhetu, 2000 and Panday, 2001). They lack participation in all spheres of governance including policy making having extremely low participation in politics which have resulted a very low socio- cultural and economic status.
18 Decentralization was mentioned in the 'Directive Principles and Policies' of the Constitution 1990. It stated that decentralization shall remain as a major objective of the state to promote the welfare of peoples on the basis of principles of an open and democratic society. It had also stated that it is the responsibility of the state to involve the maximum participation of peoples in the system of governance through the process of decentralization so as to ensure that peoples are able to enjoy the fruits of democracy. Many had believed that the process of decentralization shall subsequently improve the efficiency, transparency, accountability and responsiveness of service provision, better reflect local needs, aspirations and priorities and encourage peoples' participation and eventually improve coverage and quality of service.
In keeping with the spirit of the Constitution of 1990, the LSGA (1999) was promulgated whose principles and policies were as follows: i) Devolution of powers, authorities, responsibilities, means and resources required making LB (VDCs, Municipalities and DDCs) capable local government units and efficient in managing the local development initiatives as desired by the local electorates.
ii) Develop and create the institutional and functional mechanisms for the LBs in such a manner so as to make them able to bear the roles and responsibilities for the empowerment of the local peoples. iii) Devolve the powers and authority to collect and mobilize the local resources for local development. iv) Orientation of the LBs towards establishing and promoting the civil society based on democratic process, transparent practice, public accountability and peoples participation.
v) Arrangement for effective mechanism to make the LBs transparent and accountable in its own areas and; vi) Encourage and promote the local NGOs, Community Based Organizations (CBOs), Civil Society Organizations (CSOs) and private sector to participate in local development ensuring the peoples' participation. It is observed that many legal frameworks including LSGA related to the local governance and decentralization have been formulated but it is important to review and analyze what benefits or impacts all of these have produced to empower the rural
19 marginalized and socially excluded peoples. Even the different governments formed post- 1990 period treated LBs as their extended arms rather than accepting them as independent, autonomous and powerful institutions. On the part of LBs and government LAs, they are not prepared to share the authorities given to them with the local NGOs, CBOs, CSOs and private sector. All the political parties and their leaders lacked the political socialization, vision and will power to promote the inclusive democracy at the grassroots level as it is impossible to develop the country until and unless these rural VDCs are empowered and brought to the conspicuous position.
Every government came to power particularly after 1990 till now has time and again claimed that they have been successful in empowering the poor and socially excluded groups in socio-economic and political participation and development by involving them in decentralization processes but so far, these claims have not been tested at the micro and macro levels.
It is alleged that there are many policy, legal and institutional (structural) inconsistencies to promote the decentralized governance, peoples' participation and devolution of power and authority to the lower units of the government. This study has attempted to analyze these inconsistencies and contradictions of the decentralized local governance at the local as well as national levels.
This study has also made a critical review and reflection of the decentralization schemes being implemented since a long time and how the local units of governments, local peoples, local NGOs and CSOs perceive it in terms of devolving powers and authority.
There are few empirical studies carried out on local governance, decentralization and the involvement of LBs, NGOs and civil society groups in the Nepalese context (please refer to chapter two for detailed literature review). Most of studies have not adequately included the opinions and aspirations of the grassroots, voiceless and socially excluded poor peoples.
It was felt that there was a need to undertake an independent micro-level study to solicit fresh opinions and views of the grassroots peoples on decentralized local governance from the primary as well as the secondary sources to review and analyze the past practices of decentralized local governance. It is hoped that this study would add some knowledge by reflecting the past efforts on decentralization schemes and to educate the
20 common peoples about the real situation of implementation of decentralization schemes in Nepal.
1.4 Statement of Problem
Nepal's history of successive autocratic and centralist regimes began since 1768 AD when Prithvi Narayan Shah succeeded in consolidating the separate and scattered principalities along the Himalayan region into one nation. The monarch ruled with the absolute powers - he was executive, legislator and judge all at the same time. A centralized system of governance with its 'one-size-fits-all' approach could not adequately respond to the development needs and challenges posed by the different localities having an uneven population distribution, with few settlements scattered in the northern region and densely populated communities in the southern regions as well as the diverse Janajati groups2. In Nepal, the basic thrust for establishing an equitable justice in sharing the fruits of power and development to all the peoples is barred because of the stratified or diverse socio-cultural structure in which a person belonging to a higher social group invariably enjoys a higher social, economic and political status in the society.
Between 1846 and 1950, the tyrannical Rana regime ruled the country and it suffered from a severe economic and political stagnation. In 1959, the first democratically elected government based on the multiparty system was established but king Mahendra dismantled it soon in 1962 and he introduced the partyless Panchayat system. This Panchayat system ruled the country for about 30 years until 1990 exercising extensive authority and power by the king which can be termed as 'black era' for social inclusion, peoples' participation, decentralization and local autonomy for inclusive governance. After the restoration of multiparty democratic polity in 1990 and the subsequent promulgation of the new Constitution, the government mechanisms such as judiciary, legislative and executive continued to be centralized and remained far away from the reach of the excluded peoples of rural Nepal. The governments formed after 1990 by Nepali Congress (NC), Communist Party of Nepal United Marxist and Leninist (CPN UML) and other coalitions had carried out the same strategies, policies and visions of the autocratic Panchayat regime that had totally failed to address the aspirations, expectations and needs of the poor and excluded peoples that was expressed during the 1990 peoples'
2 The term Janajati is generally used as a short form for 'Aadibashi Janajati' (Indigenous Peoples/Nationalities or Indigenous Nationalities or Ethnic Group) in the contemporary Janajati movement. It is being used in the same sense throughout this study. It should be noted here that religious minorities such as Muslims, Sikhs and others are not included under this category.
21 movement. They centralized every state mechanism in the name of development, peoples' participation and empowerment, decentralization and good governance and common people remained as mute spectators (Baral et al, 2004).
No doubt, some forms of development deliberations began with the dawn of democracy in 1951. Attempts for planned development began from 1955 with the first periodic plan. At present, Tenth Five Year Plan has been completed and the country has traversed more than 50 years of planned development endeavors. During this period, billions of dollars generated internally and externally have been spent in education, agriculture, health, industry, tourism and infrastructure and so forth. However, there is no reliable study in our country as to who exactly have been benefited and to what extent from all those investments made in the name of poor and excluded groups for their empowerment and development. Also, there are no studies and researches as how many poor and excluded groups have benefited from these development initiatives or to whom and where such initiatives have positive or negative impacts. However, the visible impact of all these development initiatives have been that the 'high caste groups' who have traditionally had access to the state coffer have greatly benefited and the rural communities who have traditionally been denied access to the state machineries have only been a mirage. The huge gap apparent today between various indigenous groups, castes and communities in education, wealth and social prestige are the sole results of these discriminatory practices.
Nepal's socio-economic and political history shows that it has a rich multiplicity and diversity of caste, ethnicity, languages, cultures and religions which are distinctive features of the Nepalese society since the time immortal. Nepal’s state structures and system of governance however are fundamentally shaped by their exclusionary orientation and centralism that promote the social exclusion, inequality and exploitation of the poor and excluded groups. Exclusion has remained for too long and is extremely deep rooted.
The state authority has wrongly lumped up the diverse sections of the Nepalese society together as one homogenous group. Social exclusion, as a process, systematically denies and discriminates certain social groups from participating fully in their society and its development. It is a social condition which impedes people's rights to participate in shaping decisions and policies that affect them and their community. Such systematic denial and discrimination takes place on certain groups on the basis of their gender, ethnicity, race, religion and geography. Proper space for meaningful participation in decision-making processes for these poor and excluded groups was not created even after
22 major political changes. Thus, large sections of Nepalese society, particularly, indigenous nationalities, Dalits, women and Madhesi groups were treated as passive recipients of development initiatives rather than active citizens who could determine their own lives and future. This has resulted in uneven access of these groups to productive resources, compelling them to continue living in poverty and a state of injustice.
In the political sociology of Weber (1978), power is the broadest and most general concept. He dealt more specifically with the domination which he regarded as a special case of power. But domination itself was, in his view, of very wide and general significance in social life as well. As he mentioned, domination in the most general sense is one of the most important elements of the social action. For him of course not every form of social action reveals a structure of dominancy but in most of the varieties of social action, domination plays a considerable role even where it is not obvious at first sight. To illustrate an example of domination here, he pointed out the rise and domination of one language, one culture, one religion and one region one might choose over other several languages, cultures, religions and regions by authoritative power and order.
To link the above views of Weber in case of Nepal, we are aware of the fact that there has been a strong prevalence of hill-Hindu culture in the Nepalese society, dominated by the so-called upper-caste Hindus. The enforcement of Hindu values by the state and subsequent efforts to homogenize the nation in the names of consolidating national unity and integrity, protecting national sovereignty and sometimes of establishing and maintaining peace resulted in destruction of cultures of large number of indigenous nationalities. Their cultural rights and rights to and control over the natural resources were denied or violated, thus, gradually disempowering them. Such systemic disempowerment has led to the exclusion of indigenous nationalities in all spheres of life. Weber’s explanation about the domination by authoritative power and order thus stands valid in case of Nepal.
Dalits are yet another social group within Nepal which continue to face social exclusion due to socio-cultural and politico-economic systems imposed historically by the upper caste Hindus. Different obligations and privileges were assigned to higher and lower caste categories, with the higher castes holding most privileges and the lower castes bearing most obligations. Despite legal provisions against caste-based discrimination, Dalits have been deprived of opportunities in all spheres of life - cultural, economic, political and social - due to widespread discrimination against them. They are still treated as 'untouchables' and are subject to different forms of discriminations and humiliation.
23
Exclusion based on geography, the spatial exclusion, is also prevalent in the country. The Madhesi community, living in southern parts of the country, has also been facing exclusion and has been systematically denied from accessing economic and socio- political spheres of the country. People living in mid and far-western regions and those living in the high hills and mountainous regions are more excluded than people from other parts of the country. People living in these remote areas are often deprived of full participation in national socio-economic and political life.
Bista (1982) and others portrayed Nepalization as a historical process that has been going on for centuries. He stated that it is a process of integrating various groups of peoples in a unified structure, organizing them in a vertical hierarchical caste system and of synchronizing the different folk cultures, languages and lifestyles. Thus, the former explanation is close to the understanding and experience of the poor and excluded groups, the latter finds special resonance in the perception and prejudice of the dominant groups in power.
From the perspective of the poor and excluded groups, the development initiatives till now however have yielded only negative results. It has effectively contributed in continuously strengthening the hold of the 'high caste groups' in the state apparatus, have increased the socio-cultural, economic and political gaps between various castes and indigenous groups which have significantly contributed to the perpetuation of the social exclusion of the poor and traditionally marginalized groups, the rich elite have, on one hand, become richer and resourceful and the poor, on the other hand, have become poorer, helpless and resource-less every day, that has fueled an increase in inequality and injustice in our heterogeneous and diverse society.
The elite rulers have developed an attitude of not identifying the root causes and processes of discrimination, social exclusion and inequality of opportunities, not making efforts for their amelioration, and ignoring the issues of social justice and equality. These are extremely harmful for forward-looking progressive thinking and action. In fact, in order to ameliorate the problems of the poor and excluded groups, the history of suppression and discrimination inflicted on them has to be analyzed in detail (Gurung, 2003 and Subba et al, 2005).
We have seen and experienced that the autocratic Panchayat system devolved no powers, authority and required resources to the lower levels of government. Kathmandu as a
24 centre for every activity had enjoyed all socio-economic and political privileges and powers by exploiting the resources from other parts of the country which have been at the periphery all the time (Blaikie and et al, 1980). Even when the socially excluded groups acquired leadership at the local level, it was not them but other dominant groups and communities who have benefited more from them. With no power and resources, these excluded groups felt marginalized from the socio-economic and political participation during the entire Panchayat period.
In theory, multiparty democracy has a beauty of accommodating system of governance based on the active participation of the peoples with established structures and institutions that aim at enhancing justice both in production and distribution by utilizing the public resources efficiently and effectively. Good governance should be reflected in the exercise of social, economic, administrative and political authority to execute the country’s affairs at all levels. It should be viewed in societal terms such as peoples' participation, rule of law, decentralization, transparency, accountability, responsiveness with the strategic vision. However in practical terms, these issues remain very bleak and elusive.
Based on the above explanations, the key research questions that need to be answered by this study have been summed up as follows:
i) Have the existing policy, legal and institutional (state structures) frameworks been inclusive, participatory and compatible for devolving powers and authority to LBs so as to govern the diverse socio-cultural groups so as to promote the meaningful participation of the poor and excluded groups in existing decentralization and governance system in Nepal? ii) Have there been positive attitude and behavior of different political party leaders, policy makers and the whole bureaucratic system towards promoting decentralization and inclusive governance system in the country? iii) Do the LBs, NGOs and CSOs have adequate financial and human resources with required authority and capacity to maintain effective co-ordination and partnership among them to undertake the given roles and responsibilities?
25 1.5 Objectives of Study
The overall objective of this study is to review and analyze the processes of decentralization schemes taken so far at both central (macro) and local (micro) level in Nepal. The specific objectives are as follows:
i) To review the past state Constitutions, Laws, Acts and Regulations promulgated and enacted so far from the perspective of decentralized local governance in order to devolve the authorities and responsibilities to LBs, NGOs and CSOs. ii) To analyze the existing situation of sectoral devolution (particularly agriculture, education and health sectors) and the capacity and financial resource base of the LBs including the co-ordination and partnership among the government LAs, LBs, NGOs and CSOs in districts and VDCs chosen for the study. iii) To review the existing institutional set up (state structures) and analyze whether they are suitable to govern and empower the diverse social groups and; iv) To examine the roles of different stakeholders critically for the implementation of the decentralized local governance.
1.6 Conceptual Framework of Study
Decentralization is considered as a process that would ultimately lead to inclusive and just governance. It has many forms and dimensions that vary greatly within and amongst countries around the world which has a direct bearing with policy, legal and operational, institutional and fiscal frameworks of the different state government.
Based on the above, a conceptual framework has been designed which contains policy and legal, institutional, fiscal operational frameworks for decentralization of powers and authority to the lower units of government through the combination of political, fiscal, administrative and market decentralization as a holistic approach. It is perceived that if these frameworks are formulated and implemented with the participation of and consultation with the peoples from central to grassroots levels, decentralization would ultimately reduce social exclusion, promote peoples' participation and create a just and inclusive governance. A brief explanation of these frameworks is given below:
26 1.6.1 Policy and Legal Frameworks
Different government publications and reports have highlighted the major features of the policy, legal and regulatory frameworks of the decentralization exercises and processes. The government has shown commitments to establish decentralized governance system in the country. The Article 25 (4) of the Constitution of Nepal (1990) states that it shall be the chief responsibility of the state to maintain conditions suitable to the enjoyment of the fruits of democracy through wider participation of the people in the governance of the country and by way of decentralization. All the plans, policies and legal frameworks such as Eighth, Ninth, Tenth Plans and the LSGA have been guided by the spirit of the Constitution of the country.
Both Eighth and Ninth Plans (1991-96 and 1997-2002) had endorsed decentralization governance as their policy priorities. The Ninth Plan in particular has proposed wider devolution, accountable and transparent local governance, creation of a high level institutional mechanism for monitoring decentralization schemes promoting representation of women in LBs, capacity building of LBs and promotion of NGOs, CBOs, CSOs and private sector in local governance as its decentralization policy priorities.
Promulgation of LSGA was a major achievement of the government under the Ninth Plan as it incorporated most of the policies of this plan in this act. The LSGA thus offered basic policy, legal and regulatory frameworks on decentralization. LSGA has also established a number of principles of local governance including devolution of responsibilities, resources and authority to generate resources.
The main objective of decentralization, according to the Tenth Plan (2003-2007) or PRSP was to ensure greater participation of the people in the governance process to accelerate the development by implementing fiscal devolution in a phase-wise manner as envisaged in LSGA and creating necessary institutional mechanisms including the formation of local service commission. The main strategies adopted to accomplish the objective of decentralization included the devolution of basic service delivery function, capacity building of LBs and devolve certain revenue mobilization functions. This plan had accorded a high emphasis on decentralization and social mobilization to reduce poverty.
27 The Interim Constitution (2006) also highlights the opportunities for maximum involvement of the local people in affairs of local governance in order to share the fruits of democracy. It is also reflected in recently formulated 'Three-Year Interim Development Plan' covering a period from 2007 to 2010. It has strongly laid emphasis on strengthening of LBs to make the entire decentralization process more effective.
1.6.2 Structural/institutional Framework
According to Nepal's present state structure, there are different government ministries, constitutional bodies and other institutions such as HLDMC, MoLD, NPC, MoF, DIMC, LDTA, Local Authority Fiscal Commission and so forth which are directly involved with the decentralization schemes at the central level.
At the local level, there are 75 districts, 58 municipalities, 3,913 VDCs, 36,041 municipality and VDC Wards and 927 DDC Ilakas that constitute the whole LBs under 14 zones. The LBs or the local government system has been further divided into two tiers, village and municipal bodies is the first tier and district bodies are the second.
Districts are considered as focal points which are expected to work according to the concept of the local development planning, implementing and monitoring to the availability of local resources as per the aspirations of the local peoples. That is why DDC has been perceived as a core element of decentralization scheme in the country.
These LBs are therefore very important local institutions that control local level development programmes and co-ordinate all local level development initiatives as well in respective villages, municipalities and districts in order to make the decentralization schemes successful.
1.6.3 Fiscal Framework
Fiscal provision is very important component to consider if LBs or any other institutions are to undertake any devolved roles and responsibilities. The central authority should devolve required power and authority to lower level of governments to generate local funds and their use for the purpose of local development as it is complex and highly process-based. It requires institutional discipline, innovation, in-built monitoring mechanism with strong supporting policy framework and political will.
28
Fiscal framework is thus a pre-requisite for implementing decentralization scheme effectively. It can progress well by defining the tasks of the LBs and assessing the costs, reviewing the existing situation of LBs sources of revenue and finances, adopting more transparent methods for grants, budget and assistance provisions, developing a viable system to improve the level of resources for the poor districts and strengthening the financial management audit and revenue generation capacities of the LBs.
1.6.4 Operational Framework
Whatever laws and policies are promulgated on decentralization and local governance, their timely and effective implementation are very crucial and important. In order to achieve the overall goals of decentralization, the LBs must have required institutional strength and capacity for successful implementation of these policies, plans and laws of the government at the local level. Equally important is how transparently and accountably these government LAs, LBs, NGOs and CSOs function, how effective is the partnership and co-ordination among them to implement and achieve the core objectives of the decentralized local governance programmes. These pertinent issues have to be examined closely in order to find out inherent gaps in our existing system.
1.6.5 Forms of Decentralization
Everywhere in the world, the models and approaches of decentralization differ significantly and Nepal is no exception. There are also no uniformly prescribed rules that govern the decentralization processes or stages that apply to all the countries. It depends largely on the objectives of the driving the changes in structures of the governments.
There are, however, broadly four major forms of decentralization (Agrawal et al 1999, Gurung 2002 and Paudel 2003). They are political, fiscal, administrative and market decentralizations and drawing distinctions among these would be useful for highlighting many dimensions for meaningful decentralization and the need for co-ordination among them. It should be noted here that these types of decentralization could also appear in different forms and combinations across the countries, within countries and even within sectors. A brief description of each of them is as follows:
29 1.6.5.1 Political Decentralization: The core objective of decentralization is to take the government and development closer to the common citizens. The idea was to reduce the levels of administrative through which activities had to pass and to enhance the citizens' productivity and participation by increasing their involvement in developing initiatives by devolving the planning, management and implementations of different activities that are considered primarily to be of local importance. It is a most important form of decentralization that aims to transfer political power and authorities to the state or community levels so that it ensures that the common citizens and their elected representatives are in public decision-making process in all state institutions. Thus, representation is the political dimension of decentralization. It is through the representation of the people that the decentralized units obtain a perfect ground for peoples' empowerment and development.
1.6.5.2 Fiscal Decentralization: It is a very crucial form of decentralization that deals with the financial authority, autonomy and responsibility of the central government and the LBs. This issue is now being widely debated in all countries whether they are rich or poor, big or small. Decentralization of power and authority demands the resources and powers to mobilize it. It is the most comprehensive and possibly traceable degree of decentralization since it is directly linked to the budgetary provisions or it focuses on fiscal part of the decentralization, as any decentralization scheme cannot take place without the fiscal arrangements. According to this concept, the fiscal decision-making powers and authorities to the lower units of government must be decentralized with the devolved roles and responsibilities from the centre if the LBs are to carry out the decentralized functions effectively. Financial resources should be available to the local authorities in a manner that is sufficient and reliable to undertake the tasks devolved. This cannot be provided either by de-concentration or delegation mode of decentralization.
1.6.5.3 Administrative Decentralization: It is a mere transfer of roles and responsibilities of planning, management and resource generation of the central authority to its selected field level units of governments, semi-autonomous public authorities and regional or functional authorities outside the regular bureaucratic structure for the delivery of selected and limited public services from the central government.
1.6.5.4 Market Decentralization: It is a form of decentralization that promotes the favorable environment for allowing the delivery of goods and services through the market
30 mechanism in accordance with the peoples' choices and preferences. It focuses on shifting responsibilities and functions of the state government to the private sector and as market competition increases efficiency and service delivery. It is obvious that it has become more relevant and prevalent due to the recent trend of globalization, market economy and liberalization. According to this, private sector and other non- governmental actors should carry out public goods and service delivery of the state.
Building on the frameworks as well as four different forms of decentralization elaborated above, the required powers and authorities should be legally transferred from the centre to the lower units of government through a combined political, administrative, market and fiscal decentralization which would create conducive environment to generate positive effects to mobilize local resources, promotion of meaningful peoples' participation that would increase the efficiency of local delivery of services which would ensure efficient, transparent and accountable local governance. It is envisioned that this would ultimately lead to inclusive and just governance. Decentralization and local governance comprise of a set of institutions, mechanisms and processes through which citizens and their groups can articulate their needs, interests and aspirations, exercise their rights and duties at both central and local levels.
An integrated view of these concepts and their relationships constitute the conceptual framework of this study which is illustrated as below: Figure 1.1: Conceptual Framework for Policy, Legal, Structural/Institutional, Fiscal and Operational Dimensions.
FRAMEWORK FOR FORMS OF OUTCOME AT ULTIMATE DECENTRALIZA TION DECENTRALIZATION LOCAL LEVEL GOAL
Policy and Legal Better fiscal and HR Political Structural/institutio resource mobilization Fiscal JUST AND nal Efficient, transparent INCLUSIVE Administrative Fiscal and accountable local DEMOCRATIC Market government Operational GOVERNANCE Better service delivery Inclusive peoples' participation
31 1.7 Organization of Chapters
This dissertation has been divided into seven chapters and each one them contains different aspects yet inter-related organs of the study. Chapter one provides a brief background, concept of decentralized local governance and experience of decentralization elsewhere. Other ingredients of this chapter include the rationale, objectives, statement of the problems and conceptual framework of the study.
Chapter two has attempted to review a wide range of literature related to socio-cultural dimension and roles of the state, donors, I/NGOs and CSOs in promoting the decentralized local governance. Furthermore, this chapter deals with the theoretical aspects of decentralization, governance, peoples participation, political representation and present structures of state institutions and LBs and problems and challenges being faced by decentralized local governance from the secondary sources. Chapter three deals with the methodology of the study which sets different techniques applied to generate the required information and data to meet the study objectives.
Chapters four, five and six consist of the main body of the study. Chapter four proceeds with the review of the policy, legal, institutional, fiscal and operational frameworks formulated and implemented to meet the overall objectives of the decentralization and local governance to empower the LBs and local community.
Similarly, chapter five attempts to analyze the gaps and inconsistencies in government policy, legal, institutional, fiscal and operational frameworks promulgated and enacted so far to empower the LBs and local peoples. This chapter further deals with the roles and responsibilities given to LBs to manage the agriculture, education and health sectors and the ground reality at the local level in doing so particularly in the context of formulation and implementation of LSGA under the sectoral devolution from the central government. This chapter also attempts to identify inadequacies and inconsistencies on capacity and financial resource of LBs, partnership and overall co-ordination among different stakeholders including the gaps of different stakeholders such as political parties, federations and associations of LBs and donor agencies in implementing and achieving the core objectives of the decentralization and local governance.
Chapter six analyzes the primary as well as the secondary data to assess the implementation of legal, institutional, fiscal and operational frameworks at the grassroots
32 level on decentralized local governance and peoples' participation. Moreover, local peoples' views and perspectives on operational and fiscal frameworks that include the capacity and financial resources of LBs as well as the situation of the partnership and overall co-ordination at different levels have been solicited to achieve the core objectives of the decentralized local governance programmes. Based on these, it has been argued whether the efforts of different state governments towards decentralized local governance were rhetoric or not.
The final chapter seven comprises the issues, summary and conclusions drawn from the study. Beyond this chapter, follows the annexes, questionnaire, checklists used for the field study and references/bibliography.
33
CHAPTER TWO
LITERATURE REVIEW
At the root of any development efforts lies the social change. The nineteeth century theory of evolution has greatly impacted the development studies by the notable contributions made by the evolutionary social theorists such as August Compte, Emile Durkheim, Max Weber, Talcott Parsons, Herbert Marcuse and Herbert Spencer. According to the classical evolutionary theory, social change is unidirectional from primitive to modern period. However, the second theoretical influence on political development studies came from the positivism. According to Compte, principles of the natural or positive sciences could be meaningfully applied to the study of society as well. Also the study of political development has borrowed from Talcott Parsons’s functionalism considerably. Parsons had identified the basic functions that any social system must perform in order to persist. Another dimention was added by Weber (1958) which sensitized the economists and political scientists to the role of the cultural factors in development studies.
Structural-functional theory played possibly the most prominent role in early development studies. From the functionalist perspective, politics is one social system among many others such as economy or family or marriage having distinctive functions to play in any society. The basic function of politics is therefore a system of decision- making and implementation involving the exercise of the legitimate power and authority. Secondly, a system consists of certain interdependent parts. Those functions, institutions and processes outside this functionally defined political system constitute its environment and the environment is therefore formed by social systems. The political system and its surrounding environment interact with each other very closely.
Based on the above framework, there are four central concepts such as political structure, political culture, political functions and developmental problems. The nature of relations amongst these four basically determines any countries state of political development. The basic unit of a political system is role not individual and a number of interacting roles constitute a structure. A number of structures such as the legislature, the executive, the judiciary, political parties and others combination would make the political system. A modern and developed political system is marked by structural differentiation. These structures function differently in different political systems. This is largely due to the
34 differences in values, beliefs and attitudes of those occupying the roels and responsibilities towards political objectives (Almond and Power, 1966).
There are two distinctive features of the sociological approach to study the politics or political system. First, the political system is viewed as a social system on the same level as other social systems such as religion, family, kinship and so on. Second, the relationship between any political system and other social systems is given detailed attention. A social system of whatever kind has certain general characteristics and these characteristics are not conceived in the same way by all social scientists. Some define it as a system of meaningful actions and other could define it as a set of roles and relations or structure of rights and obligations.
This sociology of change thus provides the ground for the study of political sociology and political development. Hence, a detailed information were collected from both primary and secondary sources and every attempt has been made to review a wide range of literatures and publications (both published and unpublished) related to social theories, political sociology, socio-cultural dimensions and roles of the state, political parties and leaders, donors, I/NGOs and CSOs in promoting the decentralized local governance under separate headings. Moreover, this chapter deals with the theoretical aspects of state and society, political participation and representation of the people, political and fiscal decentralization, governance, and present state structures and LBs as well as the problems and challenges being faced by decentralized local governance in Nepal from the secondary sources.
2.1 Theoretical Perspectives
Social and political theories exist from within the society itself and their value and importance largely depends on the social relations and actors. All theories go behond facts but not all statements which go beyond facts are theories. Theories are invented by human beings because they are logically necessary to explanination and the need for explanation results from the problems or of things to be explained. Thus the nature of theories is intimately linked with the nature of the problems.
In view of the above, an attempt has been made here to deal with theoretical aspects of society, state, power structure and politics, political and fiscal decentralization and local development as these help to identify the major problems of decentralization and the causal relations between these problems and predicted outcomes. Theorists and advocates
35 of political and fiscal decentralization believe that it can lead to a number of positive outcomes in society. These include the promotion of democratic value system and peoples' participation, local development, improved public service performance and better fiscal management. Most of the local benefits from decentralization are believed to come from the efficient fiscal management and increased social interaction and peoples' participation which in turn leads to promote the people’s participation and representation, democratic system, efficient and equitable governance system.
2.1.1 Society, State, Decentralization, Governance and Representation
While talking about the power decentralization for achieving just governance, this is directly related with the society, moral authority or power structure of the state and its contribution to the maintenance of the social relations and order. In comparison to other disciplines engaged in the study of power structure and politics, sociology is relatively a newcomer as an academic discipline with a distinct orientation that dates back to the eighteenth century. It had to wait the arrival of the modern age. Most sociologists believe that state and power are constitutive of human societies and inequalities or discriminations in distributing the power and conflicts over its distribution are no doubt widespread.
According to Antonio Gramsci, state has a legitimate power to govern the people and society. In his view, state does not extend its dominance by coercion per se but at the same time it does so with the consent of the people as well. In other words, the state plays a major role in ideological and cultural spheres; it is similarly instrumental in manufacturing consent as well which is the characteristics of the state (Gramsci, 1971).
The state is basically a social relation as it is the codified and legitimated form of social power. State is also a common political organization of society that is why the state determines the ideological and political structure of the administration. This mode of managing the political structure could be unitary and centralized, decentralized or federal in order to disburse the state power and authority to lower units of governments and ultimately to the grassroots people. The state is therefore far more enduring and longlasting than any government. So, with a change in government, the state doesn’t change. Thus, any definition of the state and power without reference to society remains incomplete.
36 Durkheim’s analysis of the state and the nature of political participation in a democratic polity is, at the core of his conception, of the probable trend of development of contemporary societies. The notion of the political, as Durkheim points out, presupposes a division between the government and the governed. The state must play a moral as well as an economic role and the alleviation of the malaises of the modern world must be sought in measures which are in moral rather than economic. Durkheim further elaborates that a society is more or less democratic to a degree that there is a two-way process of communication between the state and the society. He also asserts that the role of the state in any society is not simply to summarize and express the views and sentiments held in a diffuse and unreflective manner by the mass of polulation. He calls the state as the social consciousness while the conscience collective as a whole is the social mind. The state is therefore often the origin of novel ideas and leades society as much as being led by it. In those societies, where the state does not assume this directive role, the result can be stagnation in the society (Durkheim, 1964).
According to Weber, power means the ability of individuals to carry out their wills in a given situation even in the face of resistance by others. He conceives the power in the sense of domination which can be acquired, owned or possessed and it is concentrated at the level of state (Weber, 1967).
The state thus plays a major role in enhancing social cohesion. It is said that politics in any society begins and ends with the state. The relationship between the state and society is also reflected in the writings of Marx. To Marx, the state is such an institution outside all regular establishments whose sole purpose in any society is to ensure class rule and class domination. According to Marx, the state is an instrument of rulling class oppression and the ruling class is capable of using the state apparatus in this manner by virtue of its ownership and control over the means of production. He said that the state in real life is not at all representative of the general will of the society rather it is responsible to protect the interests of the property owing classes and fulfill them (Marx and Engels, 1969).
Thus, society, power and authority have always been associated with the concept of the state because of the coercive dimension of the law. In any society, peoples’ rights and duties are determined by different organizations or institutions and implemented by various agencies such as judiciary, bureaucracy, police, political parties and so on.
37 Power and the exercise of authority are the driving force in modern societies. The political parties play a significant role in channelizing the power and authority. They reflect the political consciousness of the society and social groups. According to Weber, power is the chance of a man or of a number of men to realize their own will in a communal action even against the resistence of others (Weber, 1970). Power thus signifies an imposition of the will by the superordinate and when such exercises are carried out with the consent of the subordinates, power becomes legitimate authority and political parties are key actors with peoples’ participation to exercise such legitimate authority and power.
Linking the society, state and politics to the broader scope of this study, peoples’ participation and their representation to different state institutions are most important sites of the political power sharing and authority that comes with it. The roles that peoples play to govern themselves are significant in all modern political systems.
There are many dominant schools of thought and theories, which deal with the society, state, roles and scopes of the state actors’ vis-à-vis political and fiscal decentralization, peoples' participation, representation and system of governance. By bringing governance closer to the people, political and fiscal decentralization seeks to improve the development outcomes, foster inclusion of the poor and marginalized groups in decision making process, ensure equitable representation and participation in state institutions, improve efficiency of resource mobilization and utilization, ensure transparency and accountability of central government, government LAs, LBs and their elected representatives. These theories represent two different phases in the evolution of the concepts and theories of decentralization.
2.1.1.1 Theory of Social Structuration
In view of Giddens, any social structure is a mix of rules and resources that extend across space and over time. The actors sustain or reproduce the structures in space and time to use these rules and resources. His assertion is that the so-called microsociological study does not deal with the reality that is somehow more substantial than that with which macrosociological analysis is concerned. The process of structuration, according to Giddens, is intended to emphazise that the individual versus society, subject (peoples) versus object (structure) and micro-macro dichotomies do not constitute a dualism but a duality that is people use the rules and resources in interactions that constitute the social structure in their day-to-day routines in contexts of co-presence and they reproduce these
38 rules and resources of social structure. One can not understand action and interaction without reference to the rules and resources of the social structure whereas one can not fully understand large scale, long-term institutional structures without knowledge of how the social actors use the rules and resources of these institutional structures in concrete interaction.
Here rules are part of actors’ knowledgeability. Moreover, actors can transform rules into new combinations as they confront and deal with each other and the contextual particulars of their interaction. Resources are the facilities that actors use to get things done and there is a need to have capacity to perform tasks. Such capacity requires resources or material equipment as well as the organizational ability to act in situations. Giddens stresses and visualizes the resources as what generates power and authority. The mobilization of resources is what gives actors power to get things done. So, power is integral to the very existence of structure for the actors to interact.
Giddens stresses that rules and resources are closely inter-related. Also the use of power, sanctions and media of communication are inter-connected as the rules and resources of social structure. In any social systems where people are co-present and interact, power and authority are used to secure a particular set of rights and obligations as well as a system of communication and power can be exercised only through communication and sanctioning. Structuration is thus the dual processes in which rules and resources are used to organize interaction across time and in space and by virtue of this use, to reproduce or transform these rules and resources (Turner, 1995).
According to Giddens, institutions are systems for interaction in societies that endure over the time and that give people in space. He offers a typology of institutions in terms of the weights and combinations of rules and resources that are implicated in interaction. If significance (interpretative rules) is primary followed respectively by domination (allocative and authoritative resourses) and then by legitimation (normative rules), a symbolic order exists. If authoritative domination, interpretative and normative rules are successfully combined, then political institutionalization occurs. These political institutions are tied to the rules and resources that agents employ and thereby reproduce.
2.1.1.2 Socio-Centric Theory of State and Politics
If the state and society construct limit each other, then the state and politics could be constructed as a social relation. Here, the state is a legitimate form of social relation and power. Social power through the medium of social relation is instituted by social
39 activities. At particular historical moments, specific social relations become dominant and given society a particular form. The main reason behind dominant power relations getting transformed is the conflict that always underlines the ‘powerful and the powerless’. The state specializes in the way it tries to give stability to dominant power relation by legitimizing them, in the same manner it tries to render stability to society as well. For this reason, the state is the legitimized power structure at definite points of time. So, while delimiting the state and society, it is often said that though the state derives its power from the society, the state in itself is a separate organization of power because it is capable of giving power in a legal and institutional form through selection of classification. This is the state’s own prerogative. From various existing power forms in society, by selecting some and legitimizing them while neglecting others, the state stands apart from classes and other mutually antagonistic groups. Being the representative of the collective will, it can intervene in any matter of society, thus in most societies, the state is considered having a final repository of power. Politics is viewed essentially as a process of political action and interaction which is plural, competitive and contesting in any society. The work of the state is somewhat more organized. Following this perspective, the state can not be reduced to society because the power of the state to execute its decisions is not shared by other organizations or institutions in society. The state through its own politics, Constitutions, laws, rules and regulations gives stability to disperse power coalitions including the social order. Generally speaking, all political theories admit that to restrain disorder and uncertainty in order to maintain the law and order situation in the society, the state is required.
Even Marxist theory accepts that social antagonisms give rise to the state. According to Marxists, society can do away with the state only after having reconstructed its own itself, till the society is able to control itself, the state will control society. The desire to construct and control society lays down the boundaries of both the state and the society. But if the state does not attend and listen to various disagreements, dynamics, alliances and networkings of the society, it will not be able to make necessary changes in its functions and will be aimless. Irrespective of huge power and authority it has, if the state is insensitive to the changing balance of the social structures and powers, the state and politics will lose it place and significance (Skocpol et al, 1985).
Under this situation, the civil society borns and emerges as important and strong institution because it is those ‘third sector’ as called by Giddens that can exert immense pressure on the state, organize social campaigns and movements and in a sense determines the limits of the state and make it accountable to the people (Giddens, 1998).
40 2.1.1.3 Theory of Political Participation and Decentralization
The concept and theory of political participation gained prominence in political sociology literature mainly in the context of the advanced capitalist societies in the West. Western liberal democracies thus provided the perspective of the concept and theory of the political participation.
Political institutions and peoples’ participation to these institutions are key factors to make any society and state vibrant where people take part to influence the making of public policies, laws, rules and regulations to govern the society and state. People’s participation consists of taking part in the process of formulation, passage and implementation of the public policies.
According to Norman and Verma (1980), people’s political participation refers to those voluntary and legal activities by which members of a society share in the selection of rulers and directly and indirectly in the formation and influencing of the public policies and decision-making processes. They further elaborated that political participation also means political socialization through which the individual becomes aware and conscious about the political system, political feelings and ideologies, competency, efficacy and the political process. Also through the political socialization, people’s attitude, beliefs and emotions towards politics is conceived and formed. In view of Rush (1992), political participation is the involvement of the individual at various levels of activity in the political system which would range from the non-involvement to the holding of the political office. Rush has given more emphasis on the legal overtones of the political participation.
Political participation of the people is also concerned with the action by citizens aimed at influencing decisions which are in most cases taken by the public leaders, representatives and officials. This could be action which seeks to influence the decision-makers or it could be actions in protest at the outcome of some decisions made by the political leaders, their representatives, legislatives and government bureaucrats. Political participation is also viewed as one of the major components of the political stability.
Thus, people’s political participation is basically a process involving all those actions and interactions that are directly or indirectly related with the policy-making and decision- making for the smooth functioning and maintenance of social relations and order. Peoples’ participation can be ensured through the involvement of electoral process.
41
Theory of political decentralization is illustrated by Robert Bennett (1990). According to this theory, there is a close linkage among decentralization, governance system, development and political autonomy which all are very crucial elements of a decentralized system of governance. It deals mainly with the governance value system that is vital for the decentralization of power and authority to the lower units of the governance system.
The governance value, according to this theory, emphasizes more on political decentralization which can formulate policies that can be implemented by suitable state structures/institutions that would ultimately promote representative, responsiveness governance system with active socio-political participation of the people. Representative authorities can be a mechanism by which the knowledge, needs and aspirations of the peoples are brought into public decision-making processes and translated into policy formation and implementation. Representation is a mechanism that makes decentralized institutions effective and also includes powers and abilities to transform popular needs and aspiration into policy (Crook and Manor, 1998). Responsiveness is the relation between signals and policies and accountability is the relation between outcomes and sanctions. A government would be responsive if it adopts polices that are signalled as preferred by common citizens and a government is accountable only if common citizens can sanction them appropriately. A government is representative because it is responsive and accountable. Accountability and responsiveness are the basic elements of representative institutions and authorities in strong or democratic decentralization. Hence, representation and responsiveness, therefore effective decentralization requires institutional authorities which are accountable to the people given with powers and abilities to conduct public affairs. Effective decentralization is achieved when powers and abilities are transferred to downwardly accountable local authorities or governments.
The representative local authorities are a means for establishing permanent (institutionalized and thus sustained) and large-scale (covering whole national territories) peoples' participation. If the local leadership is appointed by the centre, their entire functioning will be as per the wishes or choices of the centre and they will be responsible and accountable upwards to the centre and not down to the local population to whom they have to serve. For example, the central government controls the appointment of the key LB personnel. It appoints and transfers LDOs to DDCs, Chief Executive Officers to Municipalities and Secretaries to VDCs. The central government has the power to
42 investigate, monitor, suspend and dissolve the LBs if they seriously abuse their powers and authorities. The central government therefore has every influencing power over the LBs even after the enactment of LSGA, which is against the spirit of the theory of political decentralization and peoples' participation. Decentralization very much requires genuine empowerment of the LBs and local peoples, which is not taking place despite of much uproar and publicity about the devolution.
Moreover, DADOs should be directly responsible to the DDCs according to this principle and the MoAC is responsible only for technical matters and facilitation of DADOs. But in practice, MoAC has been responsible for overall management of the staff, planning, budgeting, programme implementation and monitoring of DADO's activities. All these make DADOs totally responsible and accountable to centre (MoAC) - not to the DDCs which is against the spirit of devolution of power and authority to lower units of governance.
Decentralization of power and authority to LBs is therefore to enhance the socio- economic and political participation of the poor and socially excluded peoples because of the increased levels of interest and involvement in LBs which it brings about. This process enhances democratic values, transparency, and downward accountability of the governments and performs a system maintenance function, thus promoting socio- economic and political stability. Similarly decentralization provides the opportunity for common citizens to debate and decide upon those local issues which matter them most, thus promoting political education and social cohesion. In brief, this theory emphasizes that the intellectual core of the case in favor of decentralization is composed of a combination of both efficiency and governance values concerning to the economic value, responsiveness, transparency, accountability, diversity and socio-economic and political participation of the poor and socially excluded peoples in local governance and development.
Decentralization by placing the government closer to the people fosters greater responsiveness of political parties and leaders, bureaucrats and policy makers to the wills, needs, aspirations and interests of the common people and results in a closer congruence between public preferences and policy. This is not only because decision makers in decentralized units are likely to be more knowledgeable about and attuned to the needs of their areas than the centralized government decision makers, but also because decentralization permits these decision makers to be held directly accountable to the local
43 people through periodic local elections. It should be noted here that the decentralized state structures of any country would promote innovation while centralized state structures promote adoption and domination.
2.1.1.4 Theory of Fiscal Decentralization
Within the Nepalese context, fiscal provision is extremely important component to consider if LBs or any other institutions whether governmental, non-governmental or private, are to undertake any devolved roles and responsibilities. The central authority must devolve required power and authority to lower level of governments legally to generate local resources and funds and use them for initiating local development. It is a pre-requisite for implementing decentralization scheme effectively.
Moreover, in any decentralized structure, it is crucial to set up appropriate expenditure and tax assignments and other revenue sharing powers for every level of governments. From the point of view of theory and practices, it is important to specify the expenditure responsibilities as clearly as possible in order to promote accountability, transparency, to reduce unproductive overlap, avoid duplication of authority and legal challenges. In view of this, theory of fiscal decentralization here revolves around legal power and authority given to LBs, their fiscal situation as to find out whether they can generate, allocate and mobilize local resources and funds on their own independently without any external support from the centre to undertake the roles and responsibilities given for local level development.
Theory of fiscal decentralization thus suggests reasons to expect better public goods and service delivery at both central and local level. In other words, decentralization tends to improve the efficiency of resource generation, allocation and mobilization (Oates, 1999). It strongly emphasizes that political and administrative decentralization alone, without fiscal decentralization, are not sufficient for just and inclusive governance in order to benefit the common citizens at large.
Fiscal decentralization also enhances socio-economic and political participation at both the central as well as community level. It enhances democratic values and political stability at the local level providing forums for local debate on local development issues and priorities. When LBs are actively involved in generating their own resources and financing their own expenditures, they are more accountable to their constituencies for their development than the central government. In contrast, when the bulk of the
44 financing of local services comes from the central government, LBs are more accountable to the central government than the local community and less likely to be careful with those expenditures that they make. Thus, there is a direct linkage among the theory of political decentralization, fiscal decentralization and representative local authorities.
Nepal's cultural, ethnic, religions and regional diversities should be taken into account while searching out for the rationale for fiscal decentralization. In fact, fiscal decentralization is a mechanism for reconciliation between two divergent tendencies, the widening range of common interests and the need for the local autonomy. It is also a device for limiting and restraining the concentration of power by dividing it between the centre and lower units. In a given situation, the geographical location and concentration of power and opportunities in Kathmandu and the tendency to utilize the local resources for preserving the traditional pattern of distribution of resources, the fiscal decentralization is expected to remove the inherent imperfections of the centralized state. In fact, the dependency has severely weakened the efficiency of LBs to spend centrally allocated resources.
Fiscal decentralization is considered as a backbone of the on-going decentralization process. For achieving the objectives of the fiscal decentralization, the following are taken as three pillars by the government:
i) Policy framework: Government's eighth, ninth and tenth development plans, three- year interim plan, Decentralization Implementation Work Plan (DIP), HLDCC and other policies on decentralization. ii) Legal framework: Constitutions, LSGA, LSGR, other Rules and Acts. iii) Institutional framework: HLDMC, MoLD, NPC, MoF, ADDCN, MuAN, NABIN, LBs, LDTA and Local Authority Fiscal Commission.
It should be noted here that the fiscal decentralization is a least focused area in Nepal's decentralization experiences and processes and it distinctly lacks a sufficient policy and programme framework. Decentralization of power and authority without adequate financial resources devolved to LBs is not functional but a futile self-delusion. Supporting the local development activities should not fall under the priority of the central government. The experience so far shows that the central political leaders and whole bureaucracy of the government are not serious to devolve power and authority including the financial one to the lower units of governance.
45
Fiscal decentralization is thus a pre-requisite for effective decentralized local governance. It can progress well by defining the tasks of the LBs and assessing the costs, reviewing the existing situation of LBs sources of revenue and finances, adopting more transparent methods for grants, budget and assistance provisions, developing a viable system to improve the level of resources for the poor districts and strengthening the financial management audit and revenue generation capacities of the LBs (HMGN/Donor Review Policy Document, 2001).
2.2 Society, State and Political Dimensions of Decentralization and Local Governance
For Sociologists, politics is only one among several important subjects of study. Among the makers of the modern sociology, Weber’s interest in the study of the society and politics was central and most direct. Durkheim’s interest was less direct albeit it has too had important observations to make about the moral basis of the authority of the state and about its contribution to the mainternance of the social relations and order.
Tocqueville (1956) in ‘Democracy in America’ not only deals with the state government but also with the soeicty and different social institutions. While it fully recognizes the importance of the laws, it also emphasized more significance of social systems and customs which are described as ‘habits of the heart’. As a social being, the individual gets involved in various types of social actions and interactions with other members of the society. Power or political system therefore has a direct bearing with the society that inequalities in the distribution of power and conflict over its distribution are general and widespread.
According to the structural-functionalists analysis, political system functions at different levels. The first one is how the political system performs in relation to the overall surrounding environment. It also depends on the system’s capability in mobilizing materials and human resources from the society, control over the behavious and interactions of the individuals and groups in the society, allocation of resources, commodities, services and status to diverse population. Then the political system need to ensure that diversely articulated interests are combined and aggregated into inputs to facilitate their conversion into outputs. The political parties with a coalition of different interests are the most notable interest aggregation structure in a modern political system.
46 Then next level is the rule-making (legislative or parliament), their application (executive or council of ministers) and adjudication (judiciary) in a state. As society undergoes socio-economic changes, more and more people are mobilized to realize their several demands including that of the participation in the political process and representation in state institutions. They become increasingly assertive for the democratization of the system and try to utilize their new found rights for more materialistic benefits. So, the political system and development means the process of enabling the political system to respond effectively to the political and development issues and problems through structural differentiation, functional specialization and cultural secularization (Almond, 1987).
Political interactions are those that in one way or another and directly or indirectly related with the process of policy-making and decion-making for the society as a whole. Political participation, therefore, primarily means the active participation of the diverse population in the process of societal policy-making and their implementation. Peoples’ right to participate in politics is therefore considered to be one of the essential elements of the democratic system. Without peoples’ political representation and participation, any political system would become void and ineffective.
Nepal has a huge diversity in terms of its social, cultural, geographic and economic conditions. There are one hundred different caste and ethnic groups who speak more than ninety-two different languages. Nepal’s population is broadly categorized into five major ethnic and caste group categories. The indigenous ethnic communities, ‘high’ caste Hindus mostly Bramins and Chhetries, Tarai middle castes, low caste Dalits and others such as Muslims occupy 37%, 32%, 15%,12% and 4% of the total populations respectively (CBS 2001).
Hence, Nepal is a country of many caste/ethnic groups as none of the single ethnic/caste group commands numeric majority. However, high caste groups from the hills dominate rest of the ethnic/caste groups politically and culturally even when they make up only about 30% of the country’s population and most of other peoples are economically exploited, culturally suppressed and politically excluded. The recent data shows that high caste Hindus occupy more than 80% of the prominent positions in politics and bureaucracy with a very limited representation from other groups (Pokharel, 2005). The Dalits with about 12% of the country’s total population have zero representation in the echelons of power and privileges. Women who constitute more than 50% of the total
47 population of Nepal face severe gender discrimination in terms of access to and control over education, health services and economic resources. All round domination of high caste groups in every spheres of the Nepali society including the progressive realms like the media, civil society and human rights groups is the reflection of socio-cultural hierarchy, inequality, discrimination and centralization of every power. Majority of the state institutions worsen class cleavages, and they are imbued with caste-Hindu values, which have the effect of limiting the individual rights. Because the Constitution is geared towards favoring certain groups, individuals from those groups enjoy every protection under the law not afforded to other citizenry. The very concept and life of Hinduism is directly linked with the centralization and devolution of power in true sense would mean erosion in the traditional monopoly of powers, privileges and prestige. Therefore, social exclusion and poverty have been the underlying themes of Nepal that continue to pervade the country even after the peoples' political movement in 1990 (Gurung, 2002).
In terms of decentralization of authority and power, Nepal government advocates for the devolution which means the empowerment of the LBs but in practice, it intends to consolidate the central government. If Nepal wishes to devolve power to the LBs, it should not be imposed from the top, instead the views and interests of the local caste and ethno-linguistic groups and their representative organizations must be taken into consideration. The spirit of the true decentralization to empower the poor and excluded peoples would be defeated if it excludes the local autonomy in social, cultural, religious, linguistic, economic and political aspects except the finance, external affairs and national security (Bhattachan, 1996).
When we are analyzing about the decentralization and local governance in the context of Nepali politics, the culture of political pluralism has never developed. This was evident and reflected on the functioning of LBs as well. We have experienced that a political party had a majority in the central government whereas the opposition party had predominance at the LBs often making difficult for the central authority to implement their plans, policies and programmes at the local level. On other hand, the party who had a majority at the local level often complained and criticized the central government that the LBs under its controls have been often ignored by the centre. Though, many Acts including the LSGA specifically stated the functional relationship, co-ordination and partnership among the central government, government LAs, LBs, donors, I/NGOs, CBOs and private sector, it has never materialized mainly due to the elite groups' dominance, petty party interest and centralized mentality and characteristics of the top
48 brass of the political parties and central bureaucracy. These have been the major hurdles for the effective decentralized local governance in the country. This can be further reinforced by the fact that the major political parties and leaders had different views regarding the fate of the elected representatives of LBs when their terms expired in July 2002. Political interests come first rather than the broad interests of common peoples.
2.3 Roles of the State, NGOs and CSOs in Promoting Decentralized Local Governance
Modern thinking on civil society had begun with the emergence of the modern ideas of the state. In the West, discussions on this had begun between the 17th and 19th centuries which emerged due the social change particularly in the field of individual rights. It has generated new relationship between the state and different social institutions and forms. After the political changes like those in the erstwhile Soviet Union and the Eastern Europe, the questions related to state and civil society have suddenly emerged as important. There are, however, divergent views of different social thinkers and philoshphers on emergence of civil society and its nature.
Gramsci differentiates the sites and forms of state and power. Whilst political sociology is the space where the coercive apparatus of the state in the form of political parties, judiciary, legislative, constitutional bodies, public administration and bureaucracy and police administration is located whereas civil society is the space where the state operates through academic, cultural, educational, industrial and commercial organizations to enforce the invisible, intangible and subtle forms of power. Gramsci elaborates that civil society is located between economic organizations and the coercive state that has resulted the development of civil society groups (Gramsci, 1971).
According to Marxist view, civil society is that space which reflects the realities of the capitalist perspective where egoistic and self-promoting individuals fight perpetually to fulfil and to satisfy their self-interests in accordance with their needs, considerations and aspirations. Civil society is therefore marked by the different conflicts of self-interests in the absence of the tradition-bound rules and customs. It is the sphere where consent for the hegemonic order is produced and reproduced.
Tocqueville (1956) identified the tendency of the state to centralize the power and consequently underlined the need for altervative civil and political associations to
49 counterbalance and control this power if liberty was to be maintained. A willingness on behalf of the citizens to participate fully in the governance of their own lives is central to a thriving civil society. Such participation is an expression of citizenship.
Contemporary theorists argue that civil society might be indispensable for the existence of democracy but it is not itself a sufficient condition. The very identity of the civil society will be known by the activisms of the citizens inhabiting civil society. They may be that civil society remains captive by the state or reckoning with its own possibilities, strongly challenges the state. It also means that the mere existence of civil society does not make the state accountable, whether the latter would be forced to become so would mainly depend on the consciousness and active dynamism and political far-sightedness of the members of the civil society. If the members of the civil society are inactive, the state would become insensitive to the society and people. If they are active and politically charged, it would limit the ambit of the state authority and power. Political activism undertaken by the civil society members would help to construct alternative politics that would send message to the state that in politics the state is not the ultimate limit. So politics is the dialogue and contest between the state and society and the space for this is civil society. The open and democratic civil society would help to make democracy to function and progress well. In other words, for a democratic state, a democratic civil society is required. In this context, Hegel, Marx and Gramsci however said that civil society, instead of becoming the space of democracy, peace and fraternity, they have degenerated into an entity through which the poor are oppressed and dominated. Because of all these reasons, the public space for civil society often ends up becoming a space for fulfilling self-interests of the dominant groups and doing petty politicking ignoring the whole mass of marginalized and oppressed groups (Chakraborty, 2005).
Like concepts, theoretical notions about the state have changed over the time. The state all over the world is overburdened, inflexible and bureaucratic, whereas the private sector is hesitant and profit oriented. There are no other agencies to activate under utilized human and social power besides the peoples' own organizations called the civil society which have filled in the institutional and leadership vacuum. These organizations have been instrumental in advocating and popularizing the role of peoples' participation, transparency and accountability in the overall development process. They have acted as a vibrant force to influence the mindset of the political leaders, development planners, bureaucrats and policy makers to make pro-poor development programmes, plans and policies (Bongartz and Dahal, 1996 and Maskey, 2000). Maskey insists that the CSOs are
50 the promoter of peoples' right to development, finding low-cost solutions, improving the use of local resources and promoting the self-reliance, catalyst and promoter of equity and participatory development, democratic, transparent, cost effective and efficient institutions empowering the peoples, galvanisers of social capital and helping local institutions to build up peoples' organizations. Their entry in development is a huge experiment in the history of human affairs management. However, their successes fundamentally lie in forging a durable partnership with the government, donors and local peoples as a real owner and a catalyst for every social change and development.
The rapid growth of NGOs and CSOs as the alternative development forces in addressing the needs of the poor and excluded groups otherwise un-reached by the state and official development programmes is being increasingly realized by the state governments, international NGOs and donor agencies. Chand (1991) states that generally, the roles and functions of NGOs both on ‘residual’ and ‘institutional’ basis are to initiate development activities mostly at the micro-level through the participation of the local communities largely focusing on the rural destitute and poor, socially, economically and politically exploited, disabled and marginalized section of the community. Being rooted in the local communities, these organizations are looked upon as highly instrumental in motivating, educating, advocating and awareness generating on health, education, environment, community participation and community development in general. They can operate or deliver social development programmes on cost-effective basis which has enabled them to even explore and expand their spheres of activities in new domains particularly the development as well’. However, NGOs and CBOs are, by no means, to be looked upon as a newly developed phenomenon or a by product of the 1960s or 1970s or the 1980s per se. Such organizations in different shapes and sizes with different names took its origin long before the existence of most of the modern development and government (Dahal, 2001).
The development is a process of co-operative endeavor, which calls for the participation from every sectors and communities. The limited capability of the state to respond to the growing and diversified needs of different groups and communities efficiently and effectively in order to reach out to the needy, poor and excluded groups in the far flung remotest areas has necessitated the emergence of NGOs, CBOs and CSOs. Cernea stresses that the initial period the major activities undertaken by the NGOs were within the periphery of relief, refugees, reconstruction, rehabilitation, primary healthcare and limited basic needs sectors whereas today they are even functioning as an alternative to
51 government intervention in development activities. Less bureaucratic nature and greater degree of flexibility has led to the growing popularity of using NGOs as effective instruments to disseminate development in the difficult regions of the world. Not only the national government, the international donors as well have recognized the growing significance of these entities (Cernea, 1988 and Crook et al, 1998)
There exists a close relationship among the local autonomy, local development, decentralization and civil society groups. The local autonomy is closely associated with decentralization as this is concerned with the power and authority devolution to the lower strata of the government, whereas civil society are the networking mechanism to mobilize the local peoples and resources to materialize the intended objectives of the decentralization in an efficient and effective manner (Thapa, 1998).
Bhattachan (1997) looks at the composition of the civil society from an ethnic perspective of which the indigenous peoples and their organizations such as guthi, rodi, dharma, panchayat, dhikur, parms, kipat, khel, bheja etc are the oldest forms of traditional autonomous governance system. All these organizations are primarily community based but under some specific circumstances, non-community members are also allowed to participate in it provided they abide the community rules and values. However, he emphasizes that there is no government or donors’ support for development of these indigenous organizations so far.
NGOs and Civil society at the grassroots level maintain a good relationship and a favorable environment for the smooth functioning with the local government for poverty reduction. They can play the role of civil government maintaining the peace, bring the rules and regulations to work and carry out development programmes and activities when there is an inefficient and under-resourced government. NGOs and CSOs can generate awareness and mobilize the local peoples to assess the performance of the leadership and provide the able candidates for the future. The state could play the role of the catalyst and facilitator where civil society and NGOs encourage the local peoples for active participation in their own development activities (Sharma, 2001).
After the democratic movement and collapse of the partyless Panchyat era in 1990, new policies were formulated which have made registration of NGOs much easier than in the past. As a result, Nepal has witnessed an unprecedented growth of NGOs and CSOs within a short span of time. The democratic environment permitted rights to organize and
52 to form organizations, which led to liberalization and relaxation in the process of registration of LOs popularly known as NGOs. Local Governments are entrusted with the task of co-coordinating NGO activities in their respective areas, to provide grants and to enter into agreements with them for conducting developmental initiatives. However the Nepalese NGOs and CSOs face many problems to function. One of the biggest problems is the scarcity and uncertainty of the resources available. They depend exclusively on donations from the national and international donors. They also face many problems internally and externally. They lack the solidarity, transparency, and accountability among themselves and peoples have a low level of faith and acceptance of NGOs and CSOs. They seem to be more loyal and accountable to the funding agencies and government rather than the peoples to whom they are supposed to serve (Acharya, 1997 and Dahal, 2001).
Whatever is said above for or against the NGOs and CSOs, we must acknowledge that comparatively they have been more successful than the government institutions in organizing and mobilizing the rural poor as they are, by nature, more flexible and less bureaucratic. They have contributed to the beginning of social movements particularly concerning ethnic, gender and caste discrimination that should help Nepal to involve as an integrated state. Equally significant is the element of low cost solutions that are selected so that local management and support for any development initiatives will not become difficult for NGOs and CSOs. Their genuine commitment and dedication to the well being of the poorer strata of our society are central to their growing importance. We must realize that one of the key actors of today’s development discourse is NGOs acting in a social coalition with the peoples at the grassroots level.
The 9th plan of the government had also emphasized and committed to involve the NGOs and CSOs in building up the capacity and efficiency of the LBs. In Ninth Plan, NGOs have been acknowledged as one of the actors for ‘local planning process for LBs’ they have been acknowledged as facilitators. The plan document directed to mobilize NGOs and CSOs in remote areas and also directed them to work for ‘economically and socially backward regions’ of the country (The Ninth Plan, 1998). However in practice, it was all those NGOs and CSOs run by the local elite groups who involved in this and captured the entire benefits. A large chunk of the poor and excluded groups remained untouched by these plan documents and development endeavors.
53 Again, 10th plan built the country’s poverty reduction strategy based on four pillars namely: broad based economic growth, social sector development including human development, targeted programmes including social inclusion to bring the poor and marginalized groups into the mainstream of development and good governance based on the performance and lessons learnt from Ninth Plan. In implementing the four pillars strategy as envisaged in the plan document, it has also stressed the strategic cross-cutting approaches with regard to re-defining the role of the state and limiting the public interventions, enlisting the private sector to play a leading role in employment and income generation and together with NGOs, INGOs and LOs in complementing the government efforts in service delivery functions in key areas as well as in implementing key activities, promoting community participation in and management of activities at the local levels and accelerating the decentralization process, which is also a key element of good governance and local development (The Tenth Plan, 2003). However, like in every plan documents, the government again failed to define who those poor and marginalized groups are so as to provide targeted programmes for them.
For that purpose, peoples' organizations, NGOs and CSOs are better placed or equipped with to use such vast talents by the process of community organizations, facilitating social and community mobilization, awareness generation and sensitization, skill enhancement, local peoples’ need identification, implementation of social activities on education, health, drinking water, gender, women, Dalits, ethnic groups and other self- reliant multi-sectoral grassroots development programmes. Seeking the involvement of NGOs and other grassroots organizations seems to be a converging theme today for both the government and donors as NGO sectors are concerned with the outcomes or impacts of any development initiatives that would reach to the poorest of the poor with the flexible, cost effective and innovative ideas promoting the local institutions.
In view the above, it is high time that the Nepalese government accepts NGOs and CSOs as co-partners in real sense and not as competitors in promoting decentralized local governance. It is the responsibility of the government to provide them with the legitimate space so that the latter contribute the best they could offer.
2.4 History of Decentralization Process
Many development planners, political leaders, government bureaucrats and policy makers, experts on decentralization and governance, civil society leaders and
54 academicians have written extensively on history of decentralization process and a brief review of such works are made here as below:
Decentralization had been an uninterrupted theme over the last five decades or so. It has evolved according to the rationale of successive regimes. During the Rana period, it was for cosmetic purposes, to sustain elite power base during the Panchayat period and good governance in the present democratic set up.
In order to implement the decentralization schemes during the Panchayat period, many Commissions were formed. They were: i) Biswa Bandhu Thapa Commission (1963), ii) Bhoj Raj Ghimire Commission (1967), iii) Jay Prakash Commission (1969), and iv) Ranadhir Subba Commission (1972). Many policy recommendations were made by these Commissions emphasizing that the village Panchyat should be special rights to collect land and income taxes and the district Panchyats should be authorized to collect more taxes as their special rights so that they can undertake local development more effectively so that they would become the centers of the district development, handing over the responsibility of maintaining law and order situation by the district authority, providing more authority to Zonal Commissioners with rights to audit of district Panchayats, separating CDOs from the post of district Panchyats and the need of the committement from the central level for decentralization. Despite forming of different Commissions and Committees and submission of many policy recommendations by them during the Panchyat period, no substantial actions were taken to implement those recommendations. All these remained good only in reports as the people in the power were not serious to relinquish the power and authority to the village and district Panchayats (Bhatta, 1993).
According to Gurung, some new initiatives have been taken towards decentralization since the restoration of democracy in 1990. The most recent and the important measure have been the promulgation and enactment of the LSGA in 1999 (Gurung, 2002). However critics say, even though the LSGA has been claimed as an important measure to empower the LBs, it basically has not done anything for the LBs and the grassroots peoples because it was not born out of Nepali soil. Rather it was promulgated with the support from donor agencies. Millions of dollars were spent in Kathmandu to organize many workshops and seminars and no peoples from the grassroots were involved any process during its formulation, discussions and implementations. That was why, the LSGA could not become an Act or document of the entire Nepalese peoples.
55 Shrestha (1996) vividly describes the decentralization efforts and its implementation scenario since the Panchayat era from 1960 to 1990. He says that the Panchayat system as such, by its nature and power structure, was not palatable to implement the decentralization scheme in its real sense. Reviewing the efforts from the positive side, Shrestha agrees that at least it gave a legal framework to the country, which could be built on in the future. Legally speaking, the schemes introduced by the Panchayat system were continued until the enactment of the LSGA 1999. Shrestha writes summing up all the efforts during 1960-1990 that the scheme could not achieve the goals and vision envisaged by experts of decentralization. He further said that it worked out as a political myth primarily to expand the existence of the erstwhile Panchayat system that could not touch the true spirit of the peoples at the grassroots level. Furthermore, the authoritarian Panchayat regime, according to him, used decentralization to achieve two objectives, they were: i) as an instrument of political slogan with rhetoric and cosmetic values to satisfy peoples' aspiration of exercising powers and uplift their socio-economic status through the local development, and ii) to please the donor agencies to mobilize foreign support/funds in support for the regime. Hence, under the Panchayat regime, the development roles of the local government were practically squeezed albeit theoretically they were assigned many multi-dimensional functions and powers. The Constitution of the Kingdom of Nepal, promulgated in 1990 incorporated the concept of decentralization in article 25 (4) as one of the directive principles and policies of the state. This article mentions that the state’s major responsibility is to “maintain conditions suitable to the enjoyment of the fruits of democracy through wider participation of the peoples in the governance of the country and by way of decentralization.” Subsequently, the Eighth Plan (1992-97) called for the promotion of development through decentralization of power and the active participation of peoples at the grassroots level. The 9th plan (1998-2002) and the LSGA provided a basic policy and regulatory framework for decentralized local governance. This has been further reinforced in the current Tenth Plan (2003-07), and selected sectoral development functions such as those in agriculture, rural infrastructure and education are in the process of being devolved to the locally elected bodies (Tenth Plan, 2003). Gurung, however, says that the Ninth Plan, LSGA and 10th plan have failed to clearly define the degree of the local autonomy to LBs, no clear definition is made as to who the poor and excluded groups are. All these policy documents have treated the poor and excluded groups as beggars, not the partners, for the development and paid no attention to promote the indigenous peoples' traditional skills and knowledge system. He further says that the poor
56 and marginalized peoples' development can not be ensured without their participation in the political mainstream and restructuring of the state (Gurung, 2004).
Upon analysis of the LSGA, the relationship between the central government and LBs is illustrated in sections of 234 to 239 of LSGA. However, LBs complain that the center has not devolved enough real power to them as section 242 stipulates that the center may delegate ‘any or all powers conferred on it by the Act to any committee, organizations or officials by publishing a notification in the Nepal Gazette’. This means that the central government may, at its discretion, withdraw the delegated powers given by the Act maintaining the control and restriction to the power devolved by the central government. So in practice, it is only an empty rhetoric of power devolution to the LBs by the center. Critics of LSGA also term it like the ‘old wine in a new decorative bottle’ since it hardly gives you anything new. Despite much uproar, donors’ assistance and civil society interest surrounding the passage of this important legislation, LSGA 1999 itself came as a big disappointment to itself. The only distinctive feature of the Act has been that it clubbed together three separate Local Governments Acts of 1992 into a single volume called LSGA. One seemingly new element in this has been the possibility of DDCs to establish their own line agencies to replace those of the central government (Shrestha, 2000 and ESP, 2001).
Recognizing this, the government in its Ninth Plan emphasized the participative development efforts based on the concept of decentralization for all-round national development. It said that the decentralization policy would be focused toward enabling Local Governments to perform the role of total development management and toward forming such a local self-government that is capable to fight against the challenges of the 21st century. It further articulated the link between self-governance and more effective rural development. The Tenth Plan has “poverty reduction” as the overarching goal to be achieved through greater participation of the LBs, NGOs, CBOs and local institutions in providing service delivery (NDF, Kathmandu, 2002). Despite this, some critics say that the Ninth Plan and LSGA policy framework are clear and supportive to institutionalize the decentralization in the country but they lack corresponding strategic direction, systematic reform and implementing mechanisms with defined objectives, targets and time bound action plans. Peoples in far-flung rural areas have not yet been able to experience changes in their lives due to the ongoing Maoist insurgency, absence of elected representatives and institutional deficiencies. The government has shown its determination to address these problems in the days to come by accelerating the decentralization process down to the village and community levels. However, the
57 commitment and determination shown by the government so far have remained only in documents. The real outcome and impacts of their commitments and determinations are yet to be seen in practice (NDF, Kathmandu, 2004 and Study Report of Action Aid and New Era, 2004).
The LSGA, which replaces previously enacted three Acts (VDC, DDC and Municipal) which accepted a two-tier system of local governance, village and municipal bodies being as a lower tier and district bodies as a higher with authority. For example, they can now report irregularities and inefficiencies of the local level government programmes and suggest recommended actions. However, for the effective implementation of LSGA, altogether there are more than 23 other contradictory Acts with LSGA, which need to be amended as soon as possible. Concerned stakeholders and agencies such as Association of District Development Nepal (ADDC/N), NABIN and MuAN should work together to raise these issues for empowerment of LBs.
Despite of the enactment of the LSGA, the indigenous communities and other marginalized communities of Nepal, however, believe that their demands of ethnic autonomy and sub-autonomy with the rights to the self-determination would not be fulfilled through the decentralized local governance. All previously promulgated and enacted decentralization Acts, Laws including the LSGA had been implemented by different governments have not in fact promoted the inclusion and participation of the indigenous communities in the development processes. The Kathmandu municipality, Ragbiraj municipality and Dhanusa DDC went to the court to use the Newari and Maithali languages, respectively as their official languages in addition to the Nepali languages in accordance with the provision of the LSGA. Their claims were quashed away by the Supreme Court verdict on 1 June 1999 which proved that the LSGA has ridiculed the entire indigenous communities of the country (Bhattachan, 2005). However on the other hand, those who believe in local self-governance and decentralization argue that the ethnic autonomy with the rights to self-determination in a country like Nepal would not be possible because in almost all communities, villages, municipalities and districts, everyone lives together in mixed groups.
The fact is that the decentralization schemes of the governments based on the so-called 'devolution of power and authority to the lower units of government, peoples' participation, transparency and accountability' faced a deep crisis in the country because of the Maoist Peoples' War with the center trying hard to rule the country by decrees and ordinances rather than by the just equitable and democratic process.
58 The political parties and their leaders of the post 1990 have been reluctant in pursuing the agenda of decentralized local governance. Government’s line agencies now have a tendency of over-running the functions of LBs, as we do not have locally elected representatives in place. This situation has become worse with the conflicting interpretation of LSGA and other Acts. Grassroots peoples are still groping in the darkness about the governance. Political elites talk of decentralization of power without compromising the traditionally internalized spirit of centralization. Therefore, on one hand, Nepal is governed temperamentally as well as structurally by a highly centralized power centers while the issue of decentralized local governance that entails all ingredients of pro-poor policy, transparent and participatory development is being attempted with several Acts and Regulations, on the other. Such a dichotomy seems to have worked against the genuine interface between the local governments, local leaders and the overall national political structures and ethos (Baral et al, 2004).
It can be concluded here that despite of many efforts since the sixties in the name of decentralization to empower the poor and marginalized communities, their overall impact has been very discouraging. The LSGA attempted to give more power to the LBs but it aimed only at negligible administrative decentralization. LBs enjoy very little or no administrative, fiscal and political powers as the LBs provide very low level of services, let alone make political decisions and collect revenue.
2.5 Concept of Modernization, State-Nation, Discriminatory and Exclusionary State Machineries for the Poor and Marginalized Communities
Modernization is a form of social development as well as a process of social change. Adaptation is a key concept in modernization theory. The existing social structures take adaptation and resultant are the new social structures, which is a gradual process. In this process, less developed societies acquire characteristics of the developed societies (Lerner, 1968).
According to Learner, the modernization is a current term for an old process, a process of social change whereby less developed societies acquire characteristics common to the developed societies. It has characteristics to measure the public participation in the policy or at least democratic representation in defining and choosing the policy alternatives. It is believed that when modernization takes place, the functioning of society, state and
59 government improves with the ways in which the state and government increase their capacity to innovate, adopt changes and make policies for the society.
There are two common elements of the modernization theory, they are: i) Modernization perceives that society develops in a unilinear process, and ii) Changes come to society through the diffusion process. Any changes that are expected to occur in any society through the process of diffusion of socio-cultural elements from the developed to the underdeveloped countries involve acculturation and assimilation.
Talking about modernization theory and its relationship with the state, nations and society, it aimed to build a single community that was loyal to the state even if that meant many groups had to assimilate. Nation-state building in countries with multiple nations required assimilation by many into one favored group and accordingly many countries adopted assimilation policies for their own reasons. Assimilation by nature is imposed from the top.
Modernization theory of nation building which emerged during the sixties still seems to guide many in Nepal even today. Many modernists still consider ethnicity and identity politics as conservative, traditional and backward. They ignore and overlook the fact that the modern society is imbued with ethnic and identity traditions and norms such as following our rituals during birth, marriage and death as well as having government holidays on different socio-cultural occasions. Moreover, if the disadvantaged and marginalized groups are not mobilized along with their identity politics and movements, they would not have received even minor attentions from the state authority which is highly dominated by the high caste groups for their socio-economic and political development. All these indicate that the dominant groups would not listen until and unless the disadvantaged and marginalized groups are united and mobilized (Lawoti, 2007)
The modernist approach does not completely recognize the fact that the domination occurred along the ethnic and identity lines as well. Thus, no matter whether it is intended or otherwise, it has helped to continue the domination of the high caste groups. As a result, underprivileged groups are forced to mobilize and struggle for their rights which could destabilize the society.
State's discriminatory and exclusionary policies towards the poor and marginalized communities are prevalent everywhere no matter whether it is state or non-state sectors.
60 Recent macro-economic indices show that indigenous peoples are excluded in country's economic growth significantly. A survey conducted by NLSS (II) in 2003/04 indicates that number of people living below absolute poverty has dropped to 31% in between 1996 to 2004. However, this figure for the indigenous peoples is much higher than the national average. In this connection, the decrease of poverty indices for dominant groups during this period was 46% whereas it was merely a 10% for the indigenous peoples. As a result, more than 44% of the indigenous peoples are living below the absolute poverty line even today (CBS et al, 2006). Similarly, inclusion of indigenous peoples in non-state sector such as organized industries, financial institutions and other business companies is also extremely discouraging because of the fact the state doesn't have any effective policies that regulate the diversification and inclusion of marginalized communities in these institutions as well as the lack of better education and access to decision-making structures on the part of indigenous peoples, job seekers from these groups are confined to informal and unorganized sectors labor.
Moreover, lack of job opportunities in the country has pushed many youths to migrate as wage laborers abroad. Despite earning remittance from working abroad, it has also increased the process of dispossessions of land and property which is one of the historical phenomenon that begun with the Gorkha conquest popularized as unification of Nepal. Review of some of the literatures below would reinforce these facts.
In light of the above, Caplan (1970) is considered to have made outstanding contribution to study the relationship between the upper Hindu castes and indigenous groups of the eastern region of Nepal. This appropriately analyses as to how the state had taken actions to end the Kipat system and the traditional autonomous governance system and the special provisions made by the state for the protection of the new migrant upper Hindu castes have displaced the indigenous Limbus from their homeland and consequently made them socially, economically and politically powerless.
Regmi (1978) enumerates as to how the Kipat system was gradually usurped by the state from the indigenous groups, which gave Jaagir and Birta to its Bhardhar, army personnel and high caste groups and made it a subject of discrimination and exploitation by the state by converting them into Raikar.
Focusing on the regional issues, Gaize (1975) provides detailed information about the forcible unification processes, issues of citizenship of the Terai communities, politics of language, castes dominating the Nepalese politics of the indigenous peoples of Tarai
61 origins. These peoples traditionally lived in settlements close to thick forests and much of their subsistence came from the abundance of the natural resources such as shifting cultivation, hunting, gathering and fishing. After the endemic malaria in Tarai was brought under control during the fifties, there had been a big spurt in the in-migration of land-scarce hill population to the region. This development adversely affected the Tarai communities in those areas. The migrants from the hills, mostly belonged to the higher dominant groups, were better positioned in awareness level, literacy and education, were better connected politically and spoken the national lingua franca as their mother tongue. Therefore, they had the necessary skills to manipulate or interpret the government laws, rules, regulations and applied them to their exclusive advantage. As a result, the Tarai communities who were almost illiterate and were not even conversant with the Nepali language were steadily dispossessed of their land and other natural resources to which they had closely associated with.
Bista (1991) for the first time intensively analyzed the characteristics of and fatal consequences of Brahmanism which was the main constraints in Nepal's development and called for giving up Brahamanistic values such as fatalism and nepotism and to respect the value system of the hardworking and honest promoting diversity and pluralistic Nepalese society.
Gurung (1998) did an important study on Nepal's demographic status and social structures. Along with a demographic situation analysis of the whole Nepal in accordance with the CBS 1991, he intensively discussed the structures of the Nepalese society based on diverse languages, religions and ethnicity.
Lawoti (2005) deals intensively on the political systems experimented so far in the country. He elaborates that the Nepal has a serious problem of social exclusion in all state machineries, including the parliament, judiciary, executive and the entire bureaucracy. The post-1990 democratic polity has actually worsened the already grave situation. Many problems such as the Maoist's peoples' war including other forms of violence that have emanated from this grim situation. He suggests that the solutions to the problem of social exclusion and discriminatory practices prevailed in the country for years should be the restructuring of the existing state by adopting the federal mode of governance system and securing the protection of rights of the poor and excluded peoples. There are also problems rooted in the electoral system, in particular the first- past-the-post system, which does not represent the interests of the poor and marginalized section of the society.
62 Subba et al (2002) have identified many issues, problems, opportunities and challenges for the development of indigenous communities. This report provides a detailed historical process of deprivation, disempowerment and marginalization of indigenous peoples and suggests various measures and ways to address their socio-economic, political and cultural issues and problems.
A study conducted by The World Bank and DFID Nepal (2005) in close collaboration with the NPC of the government traces out the historical and socio-cultural foundations of exclusions and charts out a detailed picture of social exclusion and poverty outcomes in contemporary Nepal. The data presented in the study reveal that the Dalits, Madhesis, Muslims and indigenous communities (except the Newars and Thakalis) have been suffering and marginalized socially, politically and culturally for many years in different ways. The study elaborates about diversity, inclusion, and contesting hierarchy in Nepali democracy, which today is the site of gender, caste and ethnic exclusion at the national level. Addressing the question of social change, the study enumerates that empowerment and inclusion are both important. Empowerment comes from change at the grassroots level, and inclusion must be facilitated at the policy and institutional levels. This study deals with the peoples/actors organized in power structures, assets and capabilities and rules of the game or institutions, which are many and often in conflict with each other.
This study further outlines the Nepalese history of exclusion in three historical phases. The first one being the Shah-Rana phase, during which time, the caste system was used to unify the diverse groups of Nepal, and a patriarchal ideology and gender exclusion were used for controlling of women. During a 30-year of Panchayati period (1960-1990), the caste system was abolished but the legal code was not consistent with the legislation and peoples’ rights were severely curtailed. Social inclusion and participatory democracy for the poor and excluded groups meant the assimilation into and acceptance of the Hinduism and belief system to which Indigenous peoples, Dalits and women were expected to adhere. In the post-1990 period, the political parties and their leaders, government bureaucrats and the entire state machineries further promoted the process of social and spatial exclusions and marginalization of the poor and excluded groups in the country. The study is also an eye opener to raise questions like how far Nepal has progressed in terms of social inclusion during this period and also to assess how more than 40 years of development assistance has affected Nepal’s socio-cultural, economic and political structures.
63 2.6 Challenges and Problems of Decentralization and Local Governance
Since its existence, Nepal has been passing through different political systems having different nature and characteristics. Even after the restoration of multiparty system in 1990, people felt that the democracy was the gift of the rich and elites that the common people would be government by them. This has alienated the poor and marginalized sections of our society from the mainstream politics and development. The access of the poor and excluded people to the basic services didn't change in any system of governance. Many laws, acts and regulations aimed to decentralize power and authority to the lower level of government failed because of the wrangling among top political leaders, bureaucracy and local leaders.
In connection with the problems and challenges the country is facing for decentralized local governance, Shrestha says that the Nepalese bureaucracy has habitual resistance to devolve the power, authority and to be responsive to the LBs, which is one of the serious problems of the decentralization in the country. However, his views and analysis are mainly based on strengthening of the district level service delivery system and self-help institutions at the grassroots level. While examining the gravity of the present problem of the decentralization and local governance, his views and assessment are not comprehensive which do not cover all the issues related to the problems of exclusionary state structure, Constitutions, Laws, Acts and so on including the continued rampant corruption, lack of transparency, accountability and unjust governance (Shrestha, 1998).
Decentralization has long been considered as a potentially effective method for participatory development and delivery of assistance programmes. In third world, decentralized local governance, though widely advocated, has now been recognized to largely fail to provide the intended services, benefits, local development and empowerment of the poor and excluded groups. These failures have been attributed to the entrenched interests of landed rural elites, which garnered most of the benefits with the collusion of the public administration. Lack of the political will and absent of trust and faith in civil society at the higher levels of the government enabled this corruption and mal-distribution to take place. Past experiences have also shown that the centrally designed and administered development policies, plans and programmes could not make the desired impact to address all sorts of socio-economic, cultural and political discriminations, inequalities and exclusions. Still the political party leaders, bureaucrats and policy makers have not done anything to promote social inclusion, peoples'
64 participation and decentralized local governance in the country (Mallick, 1998 and Bajracharya et al, 1999).
According to Bhattachan (1996), the major problems and challenges of decentralization being practiced in the country is just a delegation of power to the ‘lower body’ but the state machineries run by the high dominant groups have failed to clearly define the actual meaning of ‘local body’ as it keeps varying from community to region to districts or to user’s group or even a village. In order to overcome these problems and challenges, he stresses that the proper meaning of ‘local body, should be in fact the ‘social group’ which should be the unit of decentralization. The theory and practice of decentralization has to be firmly anchored on social and cultural pluralism in order to yield positive effects.
Dahal and his colleagues have pointed out that there are a number of elements such as autonomy, representative-ness, peoples' participation, financial resources, transparency and accountability, participatory local planning, human resource development, public resources, civic space as well as the involvement of third sectors like NGOs, civil society and self-help organizations and consumers' group which are pre-conditions for local-self governance and decentralization. The LSGA also promotes the strengthening local self- governance by maximizing peoples' participation in the process of governance by way of decentralization, institutionalizing the process of development by enhancing the participation of all the peoples in bringing out equity in development, institutional and capacity building of local governments to exercise the power and authority in formulating and implementing plans and build local leadership capable of taking decisions affecting their lives and needs. This would be only possible when the autonomy is not compromised to the central government or captured by the local elite groups. Nepal's past experiences have indicated that the centralized government imposing development initiatives from the top cannot solve the problems of under-development, un-employment and injustice. The problems according to Dahal et al are that the decentralization initiatives undertaken so far is seen as the central elites seeking to extend control over the political, economic and social lives of the rural Nepalese using some state activities to their own advantages. It is fair to say that under multiparty dispensation, decentralization and local governance are taken as a process of sharing public space with the state and providing all those affected an opportunity to participate in the local governance process. In true sense, there are many problems in implementing decentralization plans and policies at the grassroots levels (Dahal et al, 2002).
65 There is no doubt that better functioning of decentralization and democracy would certainly make peoples strong but there is a lack of political will from the political leaders to empower the common peoples with the intended decision-making power, authority and privileges. There are many examples to prove that the civil society is not functioning well within our democratic political structure. Until now, the functioning of the NGOs and CSOs is limited to only in the conceptual framework and Nepal has not been able to include NGOs, CBOs and civil society in our development process genuinely. In order to make the decentralization a success, it requires effective mechanism through which the central government can continue to monitor, regulate, facilitate and support the decentralized entities (Dahal, 1998).
Although the Ninth Plan of the government had ‘poverty reduction’ as its main priority but no clear-cut linkages were made between poverty reduction, decentralization and role of civil society. On the part of LBs and civil society, there is a very little or no understanding of the issues involved in poverty reduction. Poor communication, coordination and interface between central government, government LAs, LBs, NGOs and civil society have also hindered the implementation of the provisions laid down in LSGA for poverty reduction. It is only the donor funded poverty reduction programmes that are run through the LBs and NGOs. Clearly the implementation of LSGA poses several challenges to the central agencies as well as to LBs. For central authorities, there is a challenge to change their mindset and accordingly plan and design devolution as their own initiatives. For LBs, the challenge is to be able to take up the responsibility as the local level entities of the government. These require a change in their current mindset and take more of governments functions. This means both taking up difficult decisions and working towards a reduce dependency on central support, revise and mobilize internal revenues and ensure transparency and accountability in their functioning (HMGN/Donor Review Policy Document, 2001).
On the part of LBs, everybody however questions as to how far the LBs have been successful in using the authority assigned to them by LSGA. It has been reported that most of the legal powers conferred to them have not been used. They lack institutional capacity, very weak financial resources and sufficient knowledge to utilize these powers effectively and efficiently. Despite of their tax-raising powers, a very little revenue is being generated and the sum collected is poorly utilized and has marginal significance. The resource base of most of the DDCs and VDCs is extremely poor. Their only resources of income apart from locally raised taxes are grants from the central
66 government and loans, grants from the donor communities. Another important dimension is the capacity of the LBs. The LSGA has given theoretical power to the LBs but the critical issue is whether they have the capability to utilize all of these or not. Almost all the LBs have very limited organizational, human, physical and financial resources to undertake the roles and responsibilities given by LSGA (Shrestha et al, 1998).
There is no doubt that there exists a close relationship between decentralization, local governance and the active participation of LBs and third sector (NGOs and CSOs) for a sustained development. Though, power devolution to the LBs is much discussed, it has brought no changes in rural poor lives. Poverty still rules peoples' psyche. They feel totally ignored from the state for which they pay taxes. Poor and marginalized groups are suffering heavily from the injustice and discriminatory state policies. Poverty, rampant corruption and other countless social, political and financial irregularities reigned the country. International community has begun to dub Nepal as a ‘failed state’. Some sections of Nepali intellectuals are also expressing the fear whether the country is heading towards becoming a failed state. The spirit of decentralization and the active participation of the poor peoples, NGOs and CSOs in the development process remain only in records and plan documents.
Upon reviewing of many different literatures and reports as stated above, it is concluded here that there exists many problems and challenges to implement the decentralized local governance system to empower the poor and excluded peoples. The process of decentralization has been unable to benefit the rural poor, ethnic and other disadvantage groups in a substantial and sustained manner. The conflicting political interests and selfishness to grab the power and authority by any means in their favor have discouraged the LBs, LOs, NGOs and CSOs from building a common forum for inclusive and decentralized local system of governance.
2.7 Donors and INGOs Support and Involvement in Decentralization and Local Governance
Many donor agencies had taken keen interest to support Nepal soon after the political change of 1951. In 1970s and 1980s, the concept of integrated rural development programme was developed and implemented with the assistance of many bilateral and multilateral donors such as GTZ, SDC, USAID, ODA (British international development agency which became DFID in 1997), Canadian Development Agency, World Bank,
67 Asian Development Bank and so on. Although these programmes were designed and implemented centrally without the direct participation of the LBs, local peoples, NGOs and CSOs, they contributed to the realization and need that the peoples and their institutions at the local level should be involved in planning, decision-making and implementation of such programmes. After the restoration of multiparty democracy in 1990, particularly 1992 elections, donors support becomes ‘more focused both on policy level and promotion of decentralization practices’ at the field level. They have been providing support to government to prepare decentralized policy framework through resources, international exposure visits and technical support. Moreover, they have been carrying out many activities aimed at enhancing decentralization practices with the involvement of government, government LAs, LBs, NGOs and CSOs (LDTA, 2002).
Decentralization and local governance are complex issues and therefore have wide- ranging implications. Thus, both Nepal Government and donor agencies have agreed that decentralization and local governance are the most appropriate mechanism to address the local development and service delivery. Hence donors' support to decentralization has been directed at policy initiatives, legal reform, social mobilization, equity promotion, local government capacity building, participatory planning and poverty alleviation. However, there are gaps in effective co-ordination, complementary plans and programmes, dissemination and sharing of information and sustainable programme design for the successful donor support in decentralization and local governance. According to the government and donors’ publications and reports, there are many instances of duplication, overlapping and ‘doing same thing by different actors’ for decentralized governance programmes being supported by many donors. The government is unable to co-ordinate, monitor and embrace these programme activities bringing all the stakeholders together to achieve the common goal of decentralized reform (HMGN/Donor Review Policy Document, 2001).
In order to provide a glimpse of the donors’ support to decentralized local governance and strengthening programmes, Bista (2002) enumerates that different donor agencies such as UNDP, UNCDF, SNV Nepal, EU, FINIDA, GTZ, DANIDA/DASU, SDC Nepal, Helvetas, DFID Nepal, NORAD, World Bank, Asian Development Bank and CARE Nepal are working with the VDCs, NAVIN, DDCs, ADDC/N, Municipalities, MuAn, MoLD and NPC in strengthening the LBs and decentralization. Despite of many years of donors' support in the country, true participation of the common poor peoples is still lacking. So far the government is unable to co-ordinate amongst different donors and
68 concern government ministries and departments for effective utilization of the donors support.
It is obvious that the poor and excluded groups of any society can not exercise their sovereignty in a centralized power based political culture and status quo. When the donors' regime and the state mechanism are based on the principle of centralization, the decentralized bodies can not elicit the desired participation of the poor and excluded groups of the society.
Having said that, the international co-operation however is a critical factor in defining the discourse revolving around the socio-economic and political policy. The support of donor agencies is now being aimed at providing opportunities for expanded participation of the poor and excluded groups in the state, market and civil society but there is neither policy coherence nor concerted action to execute the policies nor to avoid exacerbation of unequal power relationship from grassroots to the central levels. In view of this, Nepal is caught in a dilemma as the political party leaders, elected representatives and government bureaucrats, all of whom represent influential and dominant groups, often use their power and position for self-gain forgetting the larger community benefits and development. They have been involving even in distorting legal, plan and policy documents in favor of rich and well organized interest groups.
A weak state authority with a heavy dependency on donors' support for development initiatives has made the government prone to donor agencies' influence in formulation of public plans, policies and setting development priorities. The Nepali state has failed to assert itself over the donors' supports and interests. Donors can therefore provide support whenever and wherever they like not necessarily where it is most needed. It has, no doubt, weakened the ability of the state to work for the pubic interest as a whole. The failure on the part of the government to co-ordinate and monitor the effectiveness of the donors' support has created a kind of chaos and aid anarchy in the country. In addition, the special interest groups and rich having connections at the higher ups enmeshed in donors purse have made the role of aid in promoting the pro-poor policies. Also the coherent interest of both the donors and government in coordinating and collaborating with the sectoral line agencies of different ministries under the command and authority of DDCs particularly made the local accountability more difficult as the DDCs have no popular electoral base. The problem also lies in the polarization of relationship among different tiers of governance systems and a total lack of clear demarcation of roles,
69 authorities and responsibilities of the government ministries, their LAs, politically elected representatives and economic elites which have been creating perpetual tension between centralization and decentralization in the country.
In terms of donors' support patterns for decentralized the local governance in the country, their focus has mainly been on the institutions and processes of the decentralization rather than on the initiatives, access and the service delivery. So far, bureaucratization of donors' support has failed to recognize the socio-cultural diversity and the needs of the poor and excluded groups of the country. As a result, donors' support for decentralization have promoted and strengthened the central as well as the local power elites who are wholly responsible and accountable to their respective donors and political bosses rather than the common peoples to whom they should be responsible and accountable and who are in a dire need of development assistance. That is why critics say that many donors' supports have created dependency in our society instead of making them self-sustained and innovative for empowerment, self-motivation and development. This has weakened the indigenous knowledge, skills and practices to carry out the development plans, programmes and involve them in autonomous collective action.
It has been a general practice that the donor agencies work through the patron - client networks with their own I/NGOs, consultancy firms or CSOs having a similar wave length. Donors share their ideas, information and involve them in their so-called "consultation and discussion processes" in Kathmandu to frame their development strategies, design and plan their programmes for the poor and excluded peoples living in remote areas of the country. Many former elected representatives, social workers, activists, teachers and civil society leaders with whom this researcher has interviewed, have strongly raised their concerns that those so-called 'consultation and discussion processes' are totally expert based having no ideas about the gravity of the local socio- economic and political issues and concerns. They talk about the same development jargons over and over all the time and ignore the poor and marginalized groups who do not understand them.
Also many NGOs and CSOs have been mere avenues for self-employment for their close family members and relatives. As long as donors’ money is flowing in, they seem to champion for any given cause but they miserably lack the original dedication and commitment to follow through once the donor funding or projects dry up. Under these situations, only donors, despite their many weaknesses and failures, are left on the scene
70 as a potent institution equipped with necessary professionalism and political connections in order to promote and encourage the development initiatives. This tendency seriously undermines the capacity, initiatives and the potentials of the common peoples, locally elected representatives of LBs, NGOs and CSOs which are important institutions for collective action of the peoples to promote the local interests and work for the common poor and excluded communities. All these discourage true peoples' participation on one hand and promote social exclusion and discrimination on the other hand (Shrestha, 2002 and Dahal, 2003)
Moreover, Acharya (1997) adds that the Nepalese NGOs and CSOs per se are not the part of the problem, donors and INGOs are equally responsible for the mess created. The INGOs working in the country have their own plans, priorities and programmes, which they change abruptly without any consideration to the ground realities of the country that may not fall within the national priorities of the Nepalese government. All big donors except the multilateral agencies working create their own organizations to conduct NGO level development activities or have their own INGOs who lack transparency and accountability. By doing this, donors are not fostering the institutional development by establishing INGOs run by very expensive expatriates to implement development programmes. By this activity, they are building the capacity of expatriate institutions by the resources supposed to be channeled to Nepal. Furthermore, donors and multilateral agencies have tended to fund NGOs established by close relatives of political and bureaucratic authorities of political purposes rather than looking at the strength of their programmes.
In addition, many critics say that the major problems with the donors supported programmes in decentralized local governance are the lack of effective donors’ co- ordination because the government so far has no clear guidelines on donors’ co- ordination based on national policy, strategy and implementation plan on decentralized local governance. This situation has led to a thin spread of donor support and resources in several areas on one hand while government has become unable to specify support focus areas and also facilitate donors with the ideas and programmes for optimum results of their investments on the other. The donors supported programmes therefore fit well into the loosely defined policy statements rather than concrete objectives of the government. Since there is no specific central government institution to look after the decentralized local governance, all government institutions tend to accept, in fact, compete with each other for donor support which complicates the situation further resulting the automatic
71 weak donor co-ordination for decentralized local governance. There is also a mis-match between donor objectives and programmes with government’s policies and strategies on decentralized local governance (HMGN/Donor Review Policy Document, 2001).
According to Shrestha, so far all donors' supports on decentralization and local governance have been taken in isolation. Most donor agencies have only struggled against each other to find a niche for themselves in the mismanagement of LB affairs. In his view, most of the donors have been nothing more than self-serving exercises producing glossy reports rendering occasional material assistance to the government when the government has no funds to management the affairs of LBs (Shrestha, 1998).
The government desire to adopt and use the decentralization as a policy guideline to devolve authority and responsibilities to the LBs to consolidate the development from the grassroots requires constant assertion of peoples' participation and sovereignty in public policy. At the moment, the development discourse of Nepal is being wholly and totally influenced and driven by outside initiatives and resources. This would only be possible if Nepal's development discourse looks inwards to reflect the local needs and aspirations. For that to happen, the central government, LBs, donor agencies, I/NGOs and CSOs must work together as per the needs and aspirations of the poor and excluded peoples.
2.8 Present Structures of State Institutions and Local Bodies
Nepal had been continuously following a centralized system of governance for over the last 240 years ever since the King Prithvi Narayan Shah forcefully integrated small principalities into a nation. Thereafter, Shahs, Ranas, partyless Panchayat regimes and the political elites highly dominated by the high caste groups of the post-1990 era that centralized all levers of power and authority and ruled the entire country as their fiefdom.
During the partyless Panchayat period, the political units were established in districts and villages to strengthen their hold and further consolidate the centralization of the state power in rural areas. During this period and even now, the representation of the poor and excluded groups in power structure was and is never proportionate to their actual population. At a time when civil rights were curtailed, there was no way to raise voices in support of them. Attempts at raising voices in support of them invited serious accusations such as communal, divisive, malcontent, anti-national, anti-monarchy and so on. The political parties were banned under the new political dispensation and many leaders were
72 jailed or went into exile in India. The exploitation, discrimination and marginalization of the poor and excluded groups reached its highest pick during this period.
Many organizations and individuals have now realized that the present state structure is totally exclusionary and discriminatory towards the poor, Dalits, indigenous peoples, women, Madhesi, mother tongue speakers and so on. They have suggested various models for carving out the autonomous regions or federal system. Therefore, based on their political ideologies, different political leaders and others have forwarded the concept of 'Regional Government' and 'Scandinavian Model of Democratic System' respectively. But the different models presented by them seem to be the by-products of the deepening Maoists problems created by their violent insurgency. If they really wanted to offer such a model for the re-structuring of the present state, why not offer such an option well before the Maoist insurgency?
There is no doubt that after the 1990 political movement, the Nepalese peoples have become more vocal and raised their voices and concerns on many sensitive issues including the federalism, local level autonomy, self-rule and so on. The regional and ethnic based political parties such as Nepal Rastriya Janajati Party, Nepal Rastriya Janamukti Morcha and Nepal Sadbhawana Party have strongly demanded for the federalism but the type and the nature of which advocated by them differed considerably. Nepal Sadbhawana Party also demands Terai autonomy but doesn't support the ethnic autonomy. However, they have failed to come up with a concrete framework of the system for the Terai autonomy. Nepal Rastriya Janajati Party have demanded for the ethnic and linguistic-based federalism arguing that the establishment of a federal government with decentralized powers to various provinces based on language, culture and geographical factors would contribute to the creation of a Nepali society based on justice and equality. Contrary to this, Nepal Rastriya Janamukti Morcha stands for administrative federalism and rejects demands based on ethnicity, language and region (Acharya et al, 2004).
Khanal stresses that Nepal is a country of immense ethnic and linguistic diversity and Bahun-Chhetri domination in every aspect of political, economic and social life has de- legitimized the so called integration of Nepal for many ethnic groups. The military structure alone was and isn't adequate for managing the contradictions of the state that arise from this bitter situation. Now, making the state a federation and deciding the basis on which units are to be created will be a challenge but it is a challenge that must be
73 taken up by the people themselves. He further said that federalism, regional structure and decentralized district are being floated in the context of restructuring the state. Ethnic activists, Maoists and some small political parties are advocating federalism, while such large parties like the CPN (UML) is also favors federalism based on regions. It is however silent about the ethnic autonomy with the rights to self determination as demanded by the Nepal Federation of Indigenous Nationalities and Indigenous Peoples Organizations and Indigenous communities. The small left parties have reiterated that they would support the ethnic autonomy but are silent on rights to self- determination. In order to govern the diverse socio-cultural groups and to ensure the inclusive democracy, Khanal says that a new Constitution must be promulgated which must include: a) making provisions for the just representation of all communities; c) the principle of proportional representation as a mechanism for power sharing; d) a three-tier government and the devolution of power; and e) federalism with autonomous units3.
It is perhaps the Nepal Communist Party, Maoist (CPN Maoist) who brought up the issue of the urgent need for the restructuring of the present state in fore front. They have stirred up the poor and illiterate rural peoples with the litany of exclusions and exploitations perpetrated against them by the governing elite groups. They took up the causes of the very poor, excluded, oppressed, exploited the unemployed and those who had been socially, economically and politically discriminated against for ages. They have attempted to win the confidence of the various indigenous communities by carving the country up into nine political and administrative regions (two on a geographical basis and rest on the ethnic lines) along the ethnic lines and appointed their comrades as heads of these regions. At the beginning of the insurgency in 1996, they stated that the regional discrimination between the hills and the terai must be eliminated, backward regions should be given regional autonomy and the rural and urban areas should be treated at par. However, the division of the country along the ethnic lines may originally have been well-intentioned and may have attempted to correct the past wrong doings but unfortunately in its execution it is ill conceived and will undoubtedly in turn lead to numerous other problems. Therefore, even the CPN (Maoist) is still unclear as to what types of 'state structure' they really envisage. Some skeptics do not subscribe to the ethnic divisions suggested by the Maoists and argue for better decentralization or local governance within the existing unitary structure of the state. Also many political analysts say that the Maoists have never explained how their ethnic autonomy formula will work.
3 Based on personal communication with Prof K Khanal, June 2006
74 In theory, they want a forward-looking and modern ethnic state but in practice their attempts seem to be to mobilize mass support based on a generalized idea of ethnic homeland. Nevertheless, given the continued domination of a few privileged castes and classes ever since Nepal's geographical unification by force in 1769 and due to the lack of enthusiasm of the upper caste and class groups to change the state structures, the Nepali state has all along been status quo-bound and remained highly exploitative. Therefore it is a high time that the Nepali state must be restructured now (Pokharel, 2005).
According to Bhattachan, the historical processes that have led to the formation of the present make up of the Nepali state itself is seen as exclusionary by the majority of the peoples. He argues that if the domination of Bahun-Chhetri in every aspect of political, economic and social life is not rectified, Nepal will have to see multiple insurgencies. This is because Bahun and Chhetri men monopolized the power and knowledge at the expense of Dalits, non-Hindus, ethnic groups, Madhesis and women, and developed entrenched interests in the perpetuation of their dominance. As a way out of the present crisis, Bhattachan suggests a model of 'inclusive democracy' which, he emphasizes, must address the very exclusionary character of the Nepali state. The model, according to him, must be taken as an organic whole, to be implemented in its entirety. He proposes a 'federal state' with the federal units configured through a multi-pronged approach, using distinct characteristics of the hill and mountain, or Terai and Madhes, and region in different parts of the country4.
Regarding the existing state structure of the country, Khadka asserts that the faulty structures of our present state is the major problem which has failed to address the issue of the social equity, justice and inclusion of all the peoples at every level of decision making in the state institutions and that ensures empowerment of the weaker and the poorer section of our population. According to him, it should call a 'third approach' of political empowerment of the peoples in which he proposes a regional government that would fall between central government and the DDC. The state power which can be more efficiently and judiciously as well as equitably administered should be transferred from the Singh Durbar to the regional government and through it down to the VDCs and to the peoples at the grassroots levels. He further explains that it is a co-operative type of the federal structure in which the centre can share powers and responsibilities with the regional governments in certain areas or sectors which are of national importance and
4 Based on personal communication with Dr K B Bhattachan, June 2006
75 which promote balanced development, social harmony and national unity. He argues that the state re-structuring will not be complete without decentralization of power and authority. The political imperatives of keeping the three geographical regions of mountains, hills and Terai within the regional governmental structure necessitate the decentralization as a vital aspect of state restructuring. The problems arising from the vast differences among these regions in terms of area, population and resources can only be addressed through effective decentralization (The Kathmandu Post, 25 May 2004).
The unitary system of governance is the base of the centralization which needs to be dismantled if we want to devolve power and authority to the lower units of government. Instead of the unitary system, many groups such as indigenous peoples and other disadvantaged groups have been demanding for the federalism which is, fundamentally, a struggle against the centralization. In a federal system, the Constitution guarantees regional government's power and the centre can not impinge upon their jurisdictions. Regional or provincial and local governments have substantial taxation and revenue generating authority and govern through administrative and police force. In unitary system of Nepal, not only did the centre keep most of the revenue generating and taxation power but also the police and civil administration. All the powers have been virtually concentrated within the centre. The political elite's reluctance to decentralize suggests that as long as the unitary state system remains, Nepal will have to see many cosmetic decentralization reforms. Reasonable administrative, financial and political decentralization can take place in a unitary state only if the country is homogeneous and has a power sharing culture but as we all know, Nepali society is so diverse and we have no power sharing culture (Lawoti, 2004 and Sharma, 2004)
On the issue of different administrative tiers of the local governance, Bohara (2003) argues that decentralized institutional framework should be of ‘three tiers’ namely central, regional and local having their own domain and jurisdiction instead of two so that empowering the peoples in real sense can take place. He further consolidates his arguments by saying that decentralization is not only allocating the budget in a more equitable manner instead it is about building the local and regional level institutions so that they could be instrumental in tapping the economic potentials. He suggests for five regional assemblies where center could share the revenues with the regional government with the center responsible for defense, central bank, monetary policy, fiscal policy,
76 income tax and foreign policy. The regional governments can take care of health, education, roads, bridges, and of course other activities of local development. He claims that the existing upper and the lower houses of parliament do not represent the entire peoples of this country and if we adopt the proposed model of the regional assemblies all minorities, marginalized, disadvantaged and ethnic groups can make their presence based on the principle of social inclusion’ (also refer to Khanal, 2004 and Lawoti, 2005).
However, many intellectuals particularly from the dominant groups believe that the ethnic identity should not be conceived as a simple means of going back to history, which is neither feasible nor possible. They argue that if the federalism based solely on ethnicity and language can foment deep divisions and may lead to the break up of the state for reasons of political expediency by sectarian political leaders. Many Janajati leaders and activists however say that there is no way to address the traditional oppression without ethnic autonomy with rights to self-determination. They believe that the present state's structure is designed in such a way that it destroys the very geographic region of the ethnic peoples who are in majority. The present state structure, Constitutions, Laws, Acts, and regulations made by the different governments have favored the 'high caste dominant groups' to make them easy to participate from the local to the national level state machineries as well as the overall development processes. The present state must therefore be re-structured in accordance with the original place of the indigenous peoples of Nepal, asserts the Janajati leaders and activists. They believe that Nepal may disintegrate not because ethnic autonomy is granted but because it is not granted.
The Nepal Human Development Report (2001) pointed out that the numbers of LBs, particularly the VDCs, are far too many from the perspective of planning, administration, coordination, cost efficiency and service delivery. The number of locally elected representatives is also far too many and does not correspond with the LBs resources. In fact, more than 90 percent of the VDCs, 40 percent of the municipalities and 25 percent of the DDCs are totally dependent on central government grants for even providing honorarium to the elected officials and to cover their basic administrative expenses (Baral et al, 2004). The high level decentralization co-ordination committee (1996) has also concluded that the numbers of local government units are too many from the planning, administrative, co-ordination, cost-efficiency and service providing perspectives and recommended for their reduction.
77 Furthermore, there is no clear demarcation of the tasks and responsibilities among the central and government LAs and LBs, which has created unnecessary duplication, overlapping, confusion and interference with each other to undertake such devolved affairs by the LBs. In order to avoid such chaotic situation, government must therefore review the present local government’s structure, develop a decentralized local government fiscal system, establish synergetic relationship between NPC, MoLD and other government ministries, departments, design a sound decentralization supervision and monitoring system and include the LB associations as a partner and stakeholder in decisions relating to decentralized local governance (HMGN/Donor Review Policy Document, 2001).
In 1975, Gurung (2002) had proposed the re-organization of the 75 districts into 40 to the Constitution Reform Recommendation Commission (second amendment) to economize the administrative cost since there was a limit to enhance the district resources, which was rejected due to the political consideration. Since then bureaucratic as well as development activities such as roads, airports and telecommunication facilities have expanded vastly at the district level that have narrowed down the geographical space in terms of traveling time enabling the administration of much larger area. He maintains that only 11 out of 75 districts can meet their administrative costs. The rest of the districts depend entirely on the center. In view of this, Gurung thus proposed to reduce the present number of administrative districts to 25, one-third of what exists today. He offers geographical bases with comparison to the rest of the South Asian nations which extend in the Hindukush Himalyan region and argues that the size of districts was not at par with the bases of other national particularly the India.
This reduction in the number of districts would enlarge their area of coverage and reduce the administrative cost to one-third, which means creating a wider revenue base. Districts can function as autonomous bodes only if the centre adopts the policy of fiscal decentralization to have adequate resource base. This would require devolution of roles and functions to the LBs instead of expansion of central administration that has discouraged the local initiatives and capacity, Gurung stressed. He however remained silent about the present number of the VDCs and Wards and its management by the secretaries which must be nominated by the villagers themselves - not from the centre.
The geography and vast remoteness of Nepal pose special challenges for the service delivery; often solutions need to be found locally. In our present state structure for
78 example, the peoples living in remote areas require to make lengthy traveling to urban areas to get the services provided by the government which is not practical at all. As a result, there exists striking disparities between the rural and urban areas and between different regions of the country in terms of socio-economic, cultural and political participation and development. Also the current state structure creates dependency for the rural areas on the central government promoting the centralism and uneven development practices (Blaikie at al, 1980).
Many individuals believe that there is no need to have 75 districts now since the creation of districts in the first place was for the purpose of collecting revenues per se and now the purpose and basis of creating districts are different. As the country now is on the verge of massive restructuring, the existing number of VDCs and DDCs should be reduced in such a way that the existing number of LBs should be able to provide required services to the peoples related to health, education, agriculture, employment, communication, road, drinking water and many more easily. The peoples from different regions and communities must have easy and equal access to these services that a responsible and accountable state should provide with.
Regarding the actual location of power, the internal territorial division is important in order to provide the opportunities to different regions and communities. Baral is of the view that the over centralization of power and resources in the capital is due to the political as well as geographical considerations. The 'capital-centered' political cultures and perceptions of certain privileged sections of our society are against the spirit, sentiments and sensitivity of other regions and communities. The present administrative division of the country to achieve for good governance is insufficient to reduce the socio- economic and political disparity of the country5.
For many others, the state restructuring is both a structural design and a way to empower all the sections of our society. The agenda of the state restructuring is embedded with the social reforms, economic and political participation of the peoples and above all the distribution of power and resources to outlying areas where the local peoples would have access. Restructuring is transformation of the present feudal system. It relates to the physical re-designing, attitudinal changes of the elite groups and freedom from the inherited mindsets, indoctrination of the participatory political culture, economic and
5 Based on personal communication with Prof Lok R Baral, March 2006
79 social emancipation and access of all sections to power and resources. The new structure must disperse the power and resources out of Kathmandu, create regional or provincial and local institutions for realizing peoples' aspirations and making Nepal a well governed, just and democratic country. Making each part of the country capable of providing representative governance would mitigate the existing regional disparity.
Last but not the least, the major chunk of the literatures, publications, reports and articles reviewed above on decentralization and local governance has been unable to endow appropriate models for decentralized local governance in the country in light of the vast experience with various attempts and experiments for many years. All these have not clearly charted out what has worked, what didn't and what lessons Nepal has learnt after several years of investment and experiments on decentralization.
Most of the literatures reviewed above didn't deal much with major issues such as gaps and inconsistencies in policy, legal, structural, financial and operational frameworks related to decentralization and local governance in the Nepalese context of socio-cultural diversity. They have highlighted the views and perspectives of the mainstream dominant groups and ignored the views of underdogs and oppressed communities. Almost all of the literatures existed so far have also failed to differentiate among decentralization, self- governance and autonomy.
Moreover, all these literatures have been based on the secondary data and were done from the macro-level perspective and have not been able to collect and analyze the micro- level data to reach to the ground reality about the state of decentralization and local governance. They have therefore failed to analyze the root causes in making decentralization scheme a success story.
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CHAPTER THREE
METHODOLOGY
3.1 Sources of Information
This study has used both quantitative and qualitative techniques of data collection using both primary and secondary sources of information to meet the study objectives.
The primary data were collected through the survey questionnaires from VDC and district level respondents in order to assess and analyze peoples' participation to VDC, local institutions, political parties including financial and other capacity of VDCs and DDCs, their perceptions and understanding about decentralization and local governance. In addition to survey, Focus Group Discussions, Key Informants Interviews and Case Studies were conducted to supplement the information collected from the survey questionnaires. The field work took place during March through December 2007. In order to accurately portray the information and facts gathered and observed during the course of the study, it has used both descriptive as well as analytical approach.
The secondary data were collected from various sources such as library study and other sources to analyze the macro level data and practices. The review of literature presented in chapter two is wholly based upon the information obtained from libraries, books, various research reports from NPC, MoF, MoLD and donor agencies and other past studies related to decentralization and local governance.
3.1.1 Field Study Sequences/Processes
The followings were the different sequences or processes taken for the study:
Step I : First of all, preparatory visits were made to each district selected purposively to collect their profiles and other preliminary information on different government line agencies (LAs) and other stakeholders of decentralized local governance.
Step II : Then profiles and information on VDCs and village based government agencies, NGOs, CBOs and INGOs were collected.
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Step III : Two VDCs were selected in two districts for detailed study. The questionnaire was designed and administered to social workers and activists, teachers, women activists, students, officials of government offices, VDC officials (both former and present), political party leaders, NGO and CBO activists. A checklist for FGD was prepared and FGDs were conducted at the VDC level.
Step IV : The questionnaire was designed and administered to the respondents of both the districts. The respondents for this included the representatives of LB officials (both former and present), district level government LAs, NGOs and CBOs, social workers, political parties and activists.
Step V : Separate checklist was prepared to interview the central level stakeholders such as representatives of the central level political party leaders, officials of the NPC, MoF and MoLD, Decentralization, Local Governance Expert, INGOs and Donor Community, and;
Step VI : Compiled field information, summarized key findings and started write up.
The whole data collection and write up processes of the study from the VDCs to the central levels were carried out in two phases. The first phase (from step I to IV) was the fieldworks for data collection from two study VDCs and districts that started from March 2007 and completed in December 2007.
The second phase (from step V to VI) was carried out in Kathmandu. During this phase, the checklist was prepared and the central level stakeholders such as representatives of the central level political party leaders, government officials, decentralization and local governance experts, INGOs and donor community were contacted and interviewed.
3.1.2 Study Universe and Rationale for Selecting Study Areas
Although, decentralization schemes have been implemented in all over 75 districts of Nepal since a long time back, only two districts namely Kavrepalanchok and Morang were purposively selected for the study. The main rationales to select these districts were as follows:
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i) In order to achieve the geographical representation of both Madhesh/Tarai and Hill/Mountain regions having different political representation and economic status of LBs, these two districts were selected for the study.
ii) Moreover, the researcher had prior work experiences in these districts. It was noticed that despite of their proximity to all communication and transportation networks and an experience of working with different NGOs, donors and INGOs (ADRA, JICA, Love Green, SFDP, IIDS, CEPREAD, WEP, CECI, JEP/NEFIN, UNICEF, TEWA, Red Cross, SCDC, Women Development, WOREC Nepal, Jeevan Bikash, Action Aid and FORWARD) have been working for a long time, their level of awareness and participation in socio-economic and political activities still seemed very weak. iii) Different stakeholders of both governmental and non-governmental sectors were working in these districts for promoting and strengthening the decentralized local governance. iv) This researcher was familiar with the local languages and cultures of these districts and knew the district level leaders and key informants personally, and; v) In these two districts had adequate indigenous nationalities whose socio-economic and political participation at the national level was highly negligible but there were no concrete data available to test the status of indigenous nationalities at the micro- level. That was why, these two districts were selected for this study.
3.1.3 The Samples and Sample Size
3.1.3.1 Selection of Districts
As mentioned before first, Nepal was divided into two agro-ecological regions i.e. Madhesh/Tarai and Hills/Mountains. For the reasons mentioned above under the rationale for study area selection, two districts Morang from Madhesh/Tarai and Kavrepalanchok from Hills/Mountains were purposively selected.
One VDC from each of the district i.e. two VDCs were then selected by using simple random sampling design. From the view point of financial status and capacity of LBs, there is a general perception that the LBs of the southern (Madhesh/Tarai) part have
83 better financial bases and required capacity than those of the middle and northern (Hill/Mountain) part of the country. Therefore, in order to have a broader picture of the financial, human resources and capacity requirements of LBs, these two districts were purposively selected. The details follow in table 3.1 below:
Table 3.1: Details about Districts, total number of VDCs, Households and Populations of the Study VDCs Kavre District Total Total Total Ethnic Total Ethnic Non- Non-Ethnic Population Total Total Populations Study HHs of Population of Munici Consti- Population Ethnic of Study of Study VDCs HHs of District VDCs Study Study VDCs -pality tuency (A) (B) VDCs (D) VDCs (A+B) VDCs (C) (C+D) 215,976 169,696 4,362 3,041 3 87 70,509 3 385,672 1 1,228 7,403 (56%) (44%) (58.91 %) (41.09 %) Morang District 430,04 167,87 413,178 12,456 15,297 1 65 9 2 843,220 1 5,552 27,753 5 (49%) (44.88%) (55.12) (51%) Source: CBS, 2001 and field works in Kavre and Morang districts, March - December 2007
Table 3.1 presents details about their population, number of VDCs, municipalities and total number of households of two study districts. In Kavre district, there are 87 VDCs and three municipalities. It has a total population of 383,056, out of which, 215,976 (56%) is from the ethnic groups whereas 169,696 (44%) is from non-ethnic groups. The major ethnic groups of Kavre district are: Tamang, Magar, Newar, Majhi, Danuwar, Bhujel, Sunuwar, Sherpa, Thami, Pahari, Gurung and Chepang whereas the Brahmin (hill), Chhetri, Thakuri, Teli, Sanyasi and Dalits are from non-ethnic groups (CBS, 2001). It has three political constituencies.
Similary, Morang district has 65 VDCs and one municipality. It has nine political constituencies. Its total population is 843,220, out of which 413,178 (49%) is from the ethnic groups whereas 430,042 (51%) were the non ethnic population. The major ethnic groups of Morang district are: Tharu, Magar, Tamang, Newar, Rai, Limbu, Santhal, Gangai, Dhimal, Yakkha, Tajpuria, Bhujel, Rajbansi, Majhi, Danuwar, Sunuwar and so on whereas the Brahmin (Hills/Mountains and Madhesh/Tarai), Chhetri, Muslim, Yadav, Sanyasi, Kayastha and Dalits are from the non-ethnic groups (CBS, 2001).
The districts of Nepal have remained as the focal points for regulatory functions, planning and managing the district level development activities where the central government has established field offices for implementing local development initiatives. DDCs are also supposed to co-ordinate the government programmes that come through their LAs, other programmes and programmes of Municipalities and VDCs as well.
84 3.1.3.2 Selection of VDCs
Table 3.2 further presents the details of two study VDCs. The total population of Devbhumi Baluwa of Kavre district is 7,403, out of which, 4,362 (58.91%) are from the ethnic groups whereas 3,041 (41.09%) are from non-ethnic groups. Groups such as Danuwar, Tamang, Magar, Newar, Sunuwar etc are from ethnic category and Brahmin, Chhetri, Thakuri and Dalit are from non-ethnic category. The details of the caste/ethnicity composition of this VDC are given in table 3.2 below where Danuwar ethnic group is in majority comprising 42.21% of the total VDC population.
Similarly, the total population of Babiyabirta VDC of Morang district is 27,753, out of which, 12,456 (44.88%) are from the ethnic communities whereas remaining 15,297 (55.12%) are from the non-ethnic communities. Groups such as Khawas, Rajbanshi, Santhal, Jhangad (Urau), Tharu, Newar, Rai etc are from the ethnic category and Brahmin, Chhetri, Muslim, Teli, Dalit and so on are from non-ethnic category. The details of the caste/ethnicity composition of this VDC are given in table 3.2 below.
From two districts, a VDC each has been randomly selected after grouping all the VDCs of the district for primary data collection to meet the study objectives.
85 Table 3.2: Details of Composition of Two Study VDCs Population by Caste/Ethnicity
VDC Caste/ethnicity Population % Devbhumi Brahmin 2,291 30.94 Baluwa, Chettri 194 2.62 Kavre Dalit (Damai, Kami and Sarki) 376 5.07 District Danuwar 3,125 42.21 Gharti 56 0.75 Magar 11 0.16 Newar 773 10.44 Sunuwar 20 0.27 Tamang 376 5.08 Thakuri 181 2.46 Total 7,403 100 Babiyabirta Brahmin 4,579 16.47 VDC, Chettri 3,998 14.40 Morang Dalit (Rishidev: 4,590, Sarki: 102, Kami: 15, Damai: 10) 4,717 17.00 District Jhangad (Urau) 1,115 4.02 Khawas 2,698 9.73 Newar 458 1.66 Rai 554 2.00 Rajbanshi 2,705 9.75 Santhal 2,208 7.96 Sardar 1,010 3.64 Teli 208 0.75 Tharu 2,510 9.03 Muslim 792 2.86 Others6 201 0.73 Total 27,753 100 Source: CBS, 2001 and field works in Devbhumi Baluwa and Babiyabirta VDCs of Kavre and Morang districts, March - December 2007
3.1.3.3 Selection of Households
Since the decentralization and local governance are not only the issues and concerns of the policy makers, bureaucrats, political leaders and activists, development planners, donor agencies, and decentralization and local governance experts, it is equally important for all segments of the rural population. This study has therefore made efforts to cover all the strata of the peoples in its sample. Thus, women, farmers, social workers, teachers, students, local political activists and workers of different political parties and activists, persons working for local NGOs and government institutions were consulted.
In order to make more representative sample, attention was paid on gender, ethnicity and educational aspects of all the households. Then a disproportionate stratified random
86 sampling technique was used to sample the households from the two VDCs. There were altogether 69 sampled households. Out of which, 72% and 28% respondents were males and females respectively. Similarly, out of the sampled households, 49%, 46% and 5% respondents were from the ethnic groups, caste groups and from Dalit community respectively and 88% of them were literate and remaining 12 % were illiterate.
3.1.4 Methods of Data Collection
A combination of different methods such as Survey, Focus Group Discussions, Check Lists, Key Informants Interview and Case Studies was used for study as described in table 3.3 below which are as follows:
3.1.4.1 VDC Level Survey Questionnaire
The primary objectives of this study were to review the decentralization process that were implemented in the country and assess the views and perceptions of the grassroots peoples on decentralization and local governance. For this, a VDC level household survey questionnaire was designed and pre-tested (see the survey questionnaire in Annex: B) to collect the micro-level information. For this purpose, a total of 69 individuals were selected by using disproportionate stratified random sampling process from two study VDCs of two districts namely Morang and Kavrepalanchok to meet the study objectives.
A household survey questionnaire was administered to the head of the household or one of the knowledgeable persons of the household. A household was defined, for this study, as a housing unit where its members shared a common kitchen. The household questionnaire has attempted to solicit the information about their participation in LBs, NGOs, CBOs, CSOs, local level political parties, LBs capacities to manage the given roles and responsibilities, their compliance with the decentralization acts, laws and regulations to ensure transparency and accountability, co-ordination, co-operation and partnership among LBs, government agencies, NGOs and CBOs for sustainability of VDC plans, programmes and projects, their access to and control over productive resources, and devolution of power and authority to VDC to promote peoples' participation and equitable service delivery. It also asked about the access of the agricultural, education and health services at the local level.
6 It includes Kamat, Mandal, Limbu, Magar, Gurung and Tamang.
87 3.1.4.2 Focus Group Discussions
Focus group discussion (FGD) was one of the principal data gathering techniques from the diverse socio-cultural groups. Altogether, four FGDs, two in each VDC were organized among the same respondents of the same VDCs in order to collect different views and experience regarding decentralized local governance and its impacts on local development, social inclusion and their representation in local institutions. Thus, different levels of groups representing different strata of population had been identified for discussions. A set of checklist (please refer to Annex: C) for these discussions was designed. These were intentionally undertaken because if one discusses the political participation, local development and other issues in a combined group, the participants from the socially and politically excluded groups tend to be reserved or silent observers and it usually turns out to be one sided affairs, meaning that the dominant group due to, inter alia, their caste position tend to dominate the whole proceedings in a group blocking the open communication with the heterogeneous caste composition, interaction and communication. By organizing FGDs this way, women were also pursued to express their views and concerns.
FGDs helped to clarify several issues which were not clear in the questionnaire filled out by the local level respondents. These have also been useful in bringing voices and concerns of different socio-cultural groups regarding empowerment and inclusion of them in mainstream development initiatives.
3.1.4.3 DDC Level Check List
Like VDC level survey questionnaire, a check list (please refer to Annex: D) was designed and administered for DDC level information. For this purpose, a total of 68 individuals from officials of DDCs (both former representatives and present ones), government LAs, district level political party leaders and activists, NGO and CSO activists and donors agencies were purposively selected from two study districts namely Morang and Kavrepalanchok to meet the study objectives.
Different information such as local peoples' participation in DDCs, participation in district level political parties, NGOs and CBOs, DDCs capacity (human and financial) and their compliance with government Laws and Acts, transparency, accountability and financial status of DDCs, co-ordination and partnership among other stakeholders and
88 devolution of power and authority to DDCs were obtained from this survey questionnaire.
3.1.4.4 Key Informant Interviews
The key informant's interview was another source of information. The main purpose of these interviews was to obtain views and perceptions from them on: i) policy, legal, institutional, fiscal and operational frameworks related to decentralization and local governance, ii) social inclusion and diversity frameworks, iii) existing capacity of LBs, government LAs, NGOs and CSOs for empowering the local poor and undertaking local development initiatives, iv) partnership among central government, government LAs, NGOs and CSOs for empowering the local poor and to undertake local development initiatives, and v) existing situation of co-ordiantion and co-operation among central government, LBs, government LAs, NGOs and CSOs for empowering local poor and undertaking local development initiatives.
The key informants for this study included the representatives of the central level government officials, political party leaders and activists, decentralization and local governance experts and NGOs, CSOs, human rights organizations, INGOs and donor community. A check list for this purpose was designed and administered as attached in Annex: E.
Altogether, 112 such key informants (31 government officials, 30 political party leaders and activists and 51 decentralization and local governance experts and representatives from INGOs and donor agencies) were consulted and interviewed purposively at the central level who has been involving in local governance and decentralization schemes. These interviews were very useful in capturing the diverse views on effectiveness of decentralization and local governance.
3.1.4.5 Case Studies (Voices of the Peoples)
The researcher also collected 24 (10 from Morang district, 9 from Kavre district and 5 from Kathmandu) critical cases purposively in order to get some typical and critical views and perceptions on a range of issues on policy, institutional and legal frameworks of decentralization, social inclusion, representation of poor and excluded groups in state institutions, decentralization, local governance and their effect on local people. The case
89 studies presented here are indicative of and represent the issues related with decentralized local governance. A number of the selected cases have been presented in boxes and information from some of the others has also been used in the main text.
Table 3.3: Data Collection Instruments, types of Information Collected and Respondents Methods of Number of Types of Information Sought S No Data Collection Respondents 1 Survey Local peoples' participation in VDC and VDC level political Questionnaire participation, NGOs and CBOs, VDC's capacity (human, material (Annex: B) and financial) and their compliance with government Laws and Acts, 69 (Village level) transparency, accountability and financial status of VDC, co- ordination and partnership among other stakeholders and devolution of power and authority to VDC. 2 Focus Group Used to fill up the gaps in information obtained from survey Discussion questionnaire. Mainly information sought on decentralization and its 36 (Annex: C) impacts on peoples' participation, local development, social inclusion (VDC level) and their representation in VDC and other local institutions. 3 Check List Local peoples' participation in DDC and DDC level political (Annex: D). participation, NGOs and CBOs, DDC's capacity (human, material (District level) and financial) and their compliance with government Laws and Acts, 68 transparency, accountability and financial status of DDC, co- ordination and partnership among other stakeholders and devolution of power and authority to DDC. 4 Key Informant Information on policy, legal, institutional, fiscal and operational, Interview linkages, co-ordination and partnership, social inclusion and 112 (Annex: E). diversity frameworks. (central level) 5 Case Study (local, Views and perceptions of local people, local political leaders, social district and workers, government bureaucrats, central level political leaders, central levels) decentralization and governance experts on functioning of LBs, 24 peoples participation, access to and control over local resources, present structure of LBs, decentralization schemes implemented in Nepal, LSGA and so on.
The names of sampled respondents from both the VDCs including the names of district government officials, LB officials, political party leaders and activists, NGO and CSO activists as well as the central level political party leaders, avtivists, government bureaucrats, decentralization and local government experts and representatives of donors and INGOs are given in Annex: A.
3.1.5 Unit of Analysis
The micro-level units for the purpose of this study are VDCs and households. The reasons to select VDCs for the micro-level study were that the Nepalese government policy makers, political leaders, development planners and bureaucrats consider VDC as
90 a foundation for the local development and they are formally organized entity at the lowest level of local governance. Households too formed the unit of analysis as their perceptions represented the study universe.
3.1.6 Analysis of Data
Fieldworks in the districts and VDCs were undertaken by using the aforementioned techniques of survey questionnaires, FGDs, Key Informants Interview and Case Studies to collect the primary data. The data collected from both primary and secondary sources were edited, coded, classified and tabulated in appropriate formats. Most of data collected in the field are of qualitative nature and the results are interpreted based on the judgments made during the course of study.
Since this study is of the qualitative type, mostly the descriptive methods were used for analysis and interpretation of the data and information. Also the FGDs organized in VDCs helped the researcher to clarify several issues which were not clear in the questionnaire filled out by the local level respondents.
3.1.7 Limitations of the Study
Following were some of the limitations of this study:
i) By the nature of this study, one can imagine the requirement of an in-depth and the vast data as extremely challenging and complex task. First of all, this complex study needed a lot of robust data from the primary as well as secondary sources such as from the government agencies such as NPC, MoLD, DDCs, VDCs, Municipalities and other government ministries and departments. Some of the research reports, data with facts and figures were not available. Thus, one of the major limitations of this study was to manage this study within a limited data, facts and figures available.
ii) The primary data have been collected and analysed based on the information collected from VDCs of two districts only. Because of this, the findings of this study may be applicable to similar situations only.
91 iii) This study has not covered the situation of decentralized local governance in municipalities in detail. As the issues and problems of the municipalities are somewhat different from those of DDCs and VDCs requiring special attention to pay, they have remained somewhat independent of the control of DDCs. Taking these into account, although the municipalities fall under the category of LB, not much detailed study on this has been undertaken, and; iv) It was very challenging to undertake this study at a time when the political situation in the country is changing so rapidly. Though major political events on the 'State Restructuring' and system governance such as 'Federalism' are swiftly taking place after the successful peoples' movement II, this study doesn't cover these issues in detail as it basically covers the period from 1950 to 2006.
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CHAPTER FOUR
REVIEW OF THE PAST POLICIES ON LEGAL, INSTITUTIONAL, FISCAL AND OPERATIONAL FRAMEWORKS
While talking about decentralization and local governance all the way through, it would be incomplete unless we review and analyze the government's past policies on legal, institutional, fiscal and operational frameworks towards achieving the overall goals and objectives of decentralization and local governance. These frameworks are very important to empower the LBs and community people as Nepal had been involved with the exercise of decentralization under different names and forms for a long time.
The past efforts of the state governments of different times in relation to formulate and implement the legal, institutional, fiscal and operational frameworks for decentralized local governance include the Constitutions, Laws, Acts, plans, policies, regulations, legal provisions for financial resources and capacity building including the promotion of partnership and co-ordination among different stakeholders. The Constitutions and policy framework should be conducive to enshrine the broad principles on which decentralization scheme should operate including the rights and responsibilities of all levels of governments. Similarly, the laws, plans, policies and regulations should define the specific parameters on institutional details of the LB structures and their relation with the central government, sharing of different roles and responsibilities among central government, LBs, government line agencies, procedures, accountabilities and remedies including the fiscal roles, responsibilities and overall arrangements among different levels of governments.
This chapter further deals with the decentralized local governance process taken so far to empower the LBs and local peoples, particularly in the context of formulation and implementation of LSGA in devolving roles and responsibilities with transfer of funds from the centre government related to three major sectors such as the agriculture, education and health sectors to the LBs. When making such assessments, the focus was primarily made on the organizational aspects related to the provisions of powers, functions, responsibilities and field level situation of actual implementation vis-à-vis the legal provisions made by the government.
Upon review of different literatures and reports related to decentralization and local governance, the whole period of decentralization processes in Nepal can be divided into three phases. They are: i) First Phase - Early Epoch to 1960, ii) Second Phase -
93 Panchayat Epoch (1960 - 1990), and iii) Third Phase - Multiparty Epoch (1990 - 2006). This would help to analyze different policy frameworks for decentralization during these three phases as follows:
4.1 The First Phase: Early Epoch to 1960
Some forms of decentralization existed since a long time back. The ancient practice of our society in an open gathering of the community peoples at Chautaris and discussions on various community issues had been a time-honored tradition of our society when there was no formal legal system of modern era. Such traditions were accepted as the norms and values of the local self-governance. For example, a well-organized administrative system of Kirat was divided into central and local units. In both of these units, Kirat rulers used to rule with the help of customary laws based on traditions with the socio- cultural values and belief systems. They had well organized military, administrative, judicial, social and religious affairs including taxation with the good relation between central and local administrative units. There was a council of state and the cabinet to aid and advice the King at the centre. The army represented in the council of state. The monarchical rule of Kirat had fast bilateral relation between centre and local units. During Kirat rule, the entire system was based on power decentralization and authority. The local administrative units were divided into Thum and Gram administration, more or less similar to that of today's district and village units of administration giving emphasis for the maximum self-governance at the lowest level. A governor governed each Thum with the power and authority to undertake the functions like maintaining law and order, settlement of local disputes, punishment of the criminals according to the customary laws. Thus, the tradition of self-dependent and autonomous local administration based on the philosophy of decentralized administrative pattern started from the days of Kirat period. The Kirat administrative organizations were so well set that the Lichhavis had also continued the same system such as Gulmak, Pur, Tal, Drang, Kot and so on. The Gulmuk, though a political division, was an institution of social security. The Drang was entirely a municipal area like municipality of today. The Tal was an administrative division of a small village and the Pur was a small business centre. Similarly, the Kot was a fort as well as the capital of the principality. The village councils, the municipalities, the business councils and the religious associations were almost autonomous. Because of all these, Lichhavis during their rule made their country very powerful. They had developed a better relationship between the local and central governments (Pant, 1989).
94 The Malla rulers mostly carried out the Lichhavi pattern of governance and administration. The central organization of the Malla administration was well managed and organized. The Chautara was next to the king someone equivalent to the Prime Minister. There were Kajis and Pramanas, the Ministers and state Ministers respectively. Both of them were the members of the council of Ministers. There were Raj Gurus to interpret and advice the king on matters related to the religious and ritual affairs. The Rajbaidyas were the royal physicians. The power sharing structure during Malla period was not only decentralized to local institutions but also delegated to the local offices (Dhungel and et al, 2003).
Nepal has a history of successive autocratic and centralist regimes spanning over two centuries since 1769 under the Gorkha imperialism when Prithivi Narayan Shah succeeded to consolidate the separate and scattered states along the Himalayan region into a nation. After this geographical unification, the rulers imposed the policy of suppression by one-caste, one- language, one-religion and one-culture over many others. Traditionally, Nepal used to rely heavily on voluntary local governance almost in every sector. Local governance therefore helped to fulfill the desired needs and aspirations of the community and was self-reliant (Bhattachan, 2002)
4.1.1 Institutional and Legal Frameworks
After the Kot massacre of 1846, the actual time of the autocratic Rana rule had begun. Between 1846 and 1951, the Rana regime ruled the country during which time the country suffered from severe economic and political stagnation. The fourth Rana Prime Minister, Bir Shumsher, had attempted to bring a change in the existing district system in 1895. The hilly region was constructed into 23 districts called as 'Tahasils' and out of them, eight districts were created in the eastern and mid-hills. In the same way, Tarai region was integrated into 12 districts in place of 19. For the first time during the Rana period, a municipal (Bhotahity of Kathmandu) committee was constituted in 1919 with a specific responsibility of undertaking petty judicial conflicts, cleaning the roads, sewerage system and lanes. It was perhaps the first such authority put in place by promulgating an order from the state authority. In 1926, Manyajan Kachaharis were established for the rural areas. The village and district panchayats were established for self-sustained local areas in 1947 and the Village Panchayat act was enacted in 1949 to carry out the objectives of the Manyajan Kachaharis.
95 Table 4.1: Some Decrees for Power De-concentration or Delegation during Rana Period Year Initiatives 1919 Some authorities given to Kathmandu Municipality to clean Bhotahity area 1926 Manyajan Kachaharis established 1930 Panchayati Regulation formulated, established nine Village Councils and nominated Members 1947 Village and District Panchayat established for self-sustained Local Areas 1949 Village Panchayat Act enacted to carry out objectives of Manyajan Kachaharis 1950 Provision of Local Elections throughout country as per the Village Panchayat Act Source: Adopted from Shrestha (1999) and Gurung (2006)
Another Rana Prime Minister Chandra Shumsher brought some changes in the district organization and maintained 33 districts. Some decrees and regulations were promulgated in 1926, 1936 and 1943 with the objectives to show peoples' participation and local development process during the Rana period.
4.2 The Second Phase: Panchayat Epoch (1960-1990)
The decentralization of power and authority from the central government to the local level government authority is extremely crucial to promote the equitable and sustainable development with the active participation of the peoples. The opening of Nepal to the modern era and institutions including politics and governance had become possible only after the revolution of 1950-51. Thereafter, an interim government was formed and an administration was set up at the centre that conceived village Panchayats as the units of local self-government and stated that the government should take steps to organize village Panchayats and equip them with the necessary powers and authority. Acts related to the village Panchayats and municipalities were then promulgated and elections were held in some of the municipalities accordingly.
The concept of rural development was introduced in 1952 for the first time, which was called as ‘Tribhuvan Village Development Programme’ funded by the Indian and US governments. The NPC was established in 1956 and the first five-year plan (1956-61) for the first time in the history of Nepal was launched that stressed high priority to village development programmes. Developing initiatives with the objectives of creating infrastructures and extending the facilities and services at the local level were initiated under the block development schemes. It was the first scheme that the country had ever adopted for the rural development.
96 4.2.1 Institutional and Legal Frameworks
During the Panchayat epoch, the Constitution of Nepal (1962), part 8, had made a provision for local and national Panchayat. The village assembly, village and town Panchayat, district Panchayat and zonal Assembly functioned as decentralized organs of local government. Similarly, the Rastriya Panchayat functioned as an apex body of the legislature. For the purpose of decentralized administration, Nepal was divided into 14 zones and 75 districts. It was further divided into five regional development centers (Constitution of Nepal, 1990).
During this period, the districts were categorized as 'A, B and C' based on the population and the revenue potential during Rana regime were removed and were made of equal status. The government also promulgated and enacted a new village Panchayat (VP) Act in 1961 that organized 3,347 VPs and delegated powers including judicial to the village units to improve the socio-economic conditions of the people in accordance with the principle of the community development scheme. In addition, the Act also made provisions of Wards and each Ward was supposed to elect one-member for the VP. The VPs were empowered to run a joint fund and other functions as well.
Then, the Dristict Panchyat, Town Panchayat and Zonal Panchayat were enacted in 1962 and a high-level administrative power decentralization commission was formed in 1963 (Pant, 1989).
During the prolonged government period, due to the frequent changes in governments and political instability, these efforts however could not take a concrete shape. Soon after the parliamentary elections and formation of the elected party government of the Nepali Congress in 1959, the local development initiatives with an emphasis on decentralization reviewed the policy. The NC government had given the priority to the reorganization of the Panchayats and decentralization of power to them as the very foundation of democracy. The government developed the policy of nationalization of economic system, unification of industries and nationalization of forests without any remuneration. Abolishment of Birta land system, redistribution of Sheer and Jirayati land, eradication of land lordship, collection of direct land revenues, Chakalabandi of land and fixation of the boundary of the patch of land were other policies.
The government had to start almost from scratch to bring about radical changes in all the areas so that the pace of development could be accelerated. Accordingly, the government formulated and implemented many Acts and Regulations. During this period, the
97 Constitution of Nepal (1962), part VIII, had made a provision for local and national Panchayat. The village assembly, village and town Panchayat, district Panchayat and zonal Assembly functioned as decentralized organs of local government. Similarly, the Rastriya Panchayat functioned as an apex body of the legislature. For the purpose of decentralized administration, Nepal was divided into 14 zones and 75 districts. It was further divided into five regional development centers (Constitution of Nepal, 1990). Many administrative reforms were made that abolished different categories of the districts and Badahakim system of Rana period. The VP and municipalities were considered as the main bases of the local development and accordingly nine municipalities and many VPs were organized. Following the immediate re-organization of Panchayats under the decentralized scheme, 33 Panchayat officers and 109 supervisors were appointed to conduct the elections of the VPs.
In each district, a political appointee called a District Development Officer (DDO) was appointed from among the social workers while a Block Development Officer was appointed from among the experts and academicians. Each district consisted of District Development Board (DDB) and DDO was assigned to implement and review the development activities of the districts in liaison with the Central Co-ordination Committee. The DDB was the nucleus under the decentralized policy of the government. However, before these efforts could take any concrete shape, the elected government was abruptly dismissed and the experiment with the parliamentary democracy came to an illogical end.
After the fall the Rana regime in 1951, the Nepali state had begun engaging itself to expose to the outside world. The notion of equality among different social groups under the law was articulated in the Constitution though many laws remained in force, which contradicted this principle. During this period, equality and modernization were to achieve by merging ethnic diversity and identity into common culture of reigning hill Hindus. Thus, the slogan such as 'unity in diversity' became the 'unity at the cost of diversity'
In terms of promulgation of enactment of policy and legal frameworks for decentralization and local governance, many government studies and publications have highlighted the major features of the legal and policy frameworks of the decentralization exercises and processes in Nepal. The following are the major legal and policy frameworks that created and attempted to promote the decentralization in the country:
98 Table 4.2: Legal Initiatives for De-concentration or Delegation Exercised During Panchyat Epoch (1960-1990) Year Initiatives Remarks 1951 Emergence of new Demo-cratic System after - Provisions to help villages demolition of Autocratic Rana Regime 1952 Promulgation of Interim Plans and - Emphasized to help villages Implementation 1957 Envisioned of Village Pancha-yat, Block and - Districts given various developmental executive District Panc-hayat. District Panchyat given and administrative functions and powers. roles of co-ordinating all local level Development activities 1962 Constitution of Nepal Promulgated - Emphasis on decentralization of Panchayat. - Creation of post of CDO. 1965 Local Administration Act - Decentralization plans in three phases. - Panchayat Development Land Tax (PDLT) Pilot Scheme. 1972 Local Development Department - Creation of the post of Panchayat Development Officer (PDO). 1974 District Administrative Plan - Provision for District Development Plan. 1978 Integrated Panchayat Development Design - Idea of ‘Service Center’ as focal point of local planning. - In 1979, PDLT withdrawn. 1980 Establishment of Ministry of Local - Conversion of PDO to LDO (Local Development Officer). Development (MoLD) 1981 Merger of Panchayat and Local Development - Integrated Rural Development Central Co-ordination Board. Ministries as MPLD 1982 Decentralization Act - Districts to prepare annual periodic plans. - Decentralization of responsibilities and powers to the local level. - Financial management and resources mobilization. - Arrangement for auditing the accounts and, - Legal stipulation for detailed process of power decentralization. 1984 Decentralization (working management) - District, village, town Panchayats to prepare annual periodic plans. Rules - Elaboration of the functions, duties and powers of the district assembly, district Panchayats and members, chairperson and vice- chairperson of district Panchayat. - Elaboration of the functions, duties and powers of the town assembly, town Panchayats and ward committees and members, Pradhan Pancha (Chairperson) and Upa-Pradhan Pancha (Vice- Chairperson) of town Panchayat. - Elaboration of the functions, duties and powers of the village assembly, village Panchayats and members, Chairperson and Vice- Chairperson of village Panchayat. - Elaboration of the functions, duties and powers of different committees and other office bearers. - Provision for financial management system of Local Government Institutions. - Arrangement for personnel system and administrative management at the local level and, - Provisions for the preparation of by-laws and manuals.
Source: Shrestha, The Implementation of Decentralization Scheme in Nepal: An Assessment and Lessons for Future (1999) and Gurung (2006)
99 King Mahendra, after taking over the power in December 1960 from the elected government of Nepali Congress, had promised that he would initiate a democracy founded on the grassroots level. He denounced the multiparty-party system as a foreign concept and importation of such system would be incompatible with the Nepalese norms, values, systems and traditions. He therefore had banned the existing political parties and reconstructed the Panchayat system into the mode of partyless political system in which the king assumed the role of a supreme and active political leader. Accordingly, the Panchayat system was constructed combining structures such as the Rastriya Panchayat, Zonal Panchayat, District Panchayat, Town Panchayat and Village Panchayat. Latter on, the Zonal Panchayat was dropped and the District, Town and Village Panchayats constituted the local political structure of the Panchayat system.
In 1962, the Constitution of Nepal was promulgated and enacted which formalized the hierarchies of the Panchayat institutions and different class organizations from village and town to the national level providing a new system. The new Constitution committed for the gradual decentralization of power to the local level as one of the fundamental principles of the new polity. It was introduced both as strategy legitimizing the partyless authoritarian regime under the absolute monarchical rule that had replaced the party- based competitive parliamentary system of government and as a policy to delegate and de-concentrate certain level of administrative power to the field branches of the central administration. Local Panchayats (villages) were placed under those people faithful to the Panchayat system to strengthen the regime’s network at the village level. This served not only to give support to the system, but also to establish a base to counter the forces that had favored the multi-party system. This also created local Panchas in every village, who acted as cadres and mobilized people at the grassroots level on behalf of the existing system (ADDCN, 2001).
For about thirty years, the partyless Panchayat system had experimented different models, policies, schemes and programmes in the name of decentralized local governance. Several Committees and Commissions had constituted to study, review and recommend the decentralization policies and programmes, which are described below:
4.2.1.1 Administrative Power Decentralization Commission 1963
Soon after the promulgation of the Constitution of the country in 1962, king Mahendra formed an Administrative Power Decentralization Commission to give a practical shape to the Constitutional proclamation of the policy of decentralization. The Commission made a comprehensive report on various aspects of political and administrative
100 decentralization of power. The Commission not only contained suggestions for administrative decentralization but also envisioned institutions of decentralized local self- governance at the village, town and district levels. The report also included a detailed strategies and programmes and suggested strengthening the local institutions and making them self-reliant.
4.2.1.2 First Decentralization Plan/Local Administrative Act 1965
As per the recommendations of the Decentralization Commission 1963, the government framed a three-phase decentralization programmes viz. preliminary, transitional and permanent to be implemented in a twelve-year period from 1965. During the preliminary phase, the reorganization of the district administrative plan was implemented. The local administrative Act (1965) was promulgated that formalized the administrative division of the country into 14 zones and 75 districts created in 1961. A new ladder of administration was created at the zonal level by directly appointing the Zonal Commissioners by the king to look after the zones. It created the post of the Chief District Officer (CDO) in the place of Badahakim who was also assigned to work as the secretary of the district Panchayat. Both the posts of Zonal Commissioner and CDO were brought under the Ministry of Home Affairs and their main responsibilities were to maintain the law and order in their respective zones and districts.
In order to make the Panchayat system a success, a Third Five Year Plan (1965-1970) had also emphasized on the need to implement the decentralization plans and programmes. The plan had therefore incorporated the Panchayat sector as a new chapter in the planning document. The Local Administrative Act (1965) authorized the village Panchayat to collect taxes for local development while district Panchayat were to oversee all the development activities of the district.
However, many other recommendations made by the Decentralization Commission, mainly those related to empowering the local Panchayat units were considered as unsuitable to the soil of the nation.
4.2.1.3 District Administration Plan 1975
The Panchayat approach to the decentralization during the 1960s and 70s had passed through different experiments by forming various Commissions and Committees to review and recommend policy measures and programmes. The measures and programmes relating to the decentralization mainly focused on the relationship between the district Panchayat and the district level administration. In 1967, a Decentralization
101 Committee was formed to review the APDC’s (1963) recommendations and suggested appropriate strategies to implement the decentralization policies and strategy. This Committee emphasized on decentralization for development instead of the local self- governance as envisaged by the APDC and suggested relieving the CDO from his role as the secretary to the District Panchayat. Thereafter, another Committee was constituted in 1969, which endorsed several recommendations of its predecessor Committees strengthening the role of Zonal Commissioners. The government then enacted the District Administrative Plan (DAP) in 1975 and re-designed the decentralization scheme aiming at consolidating the model of unified district administration system. According to DAP, all district level offices for the development activities of the government line agencies were put under the leadership and authority of the CDO. DAP also attempted to expand the roles of the local Panchayats for active people’s participation and District Panchayat to formulate the integrated district development plans and programmes. Due to the priority given by the donor agencies for the rural development, the government established the Ministry of Local Development (MoLD) in 1980. The post of Panchayat Development Officers that succeeded CDOs as the district Panchayat secretaries were designed as Local Development Officers (LDOs) with the sole responsibility of the district development activities. However, the government merged the MoLD into the Ministry of Panchayat and Local Development in 1981 along with the formation of the Integrated Rural Development Co-ordination Board. However, the problems of decentralization and its co-ordination remained unresolved. Also the DAP and district development plans and programmes remained as failed exercises.
4.2.1.4 Decentralization Act (1982) and Rules (1984)
Soon after the merging of the MoLD into the Ministry of Panchayat and Local Development in 1981 along with the formation of the Integrated Rural Development Co- ordination Board, the government promulgated and enacted the decentralization Act and Rules. The Act had envisaged the following broad objectives:
Decentralization of Authority: The Act had empowered the local Panchayats to undertake all the district-level development initiatives including the formulation, planning, implementation, supervision and evaluation of the local development initiatives. The Act had also made some provisions to provide powers, functions and duties to all the LBs ie: village, town and district Panchayats.
102 Plan Formulation: The Act had provided the local Panchayats to formulate the periodic and annual local development plans for their respective areas. Authority had provided to the local Panchayats for plan formulating, planning, implementation, supervision, evaluation and distribution of the benefits of the local development initiatives. The Act had also formed Committees to plan formulation on agriculture and irrigation, industry, forestry, education and soil conservation. The budget ceiling and planning guidelines had provided to the district, town, village as well as the concerned government line ministries by the NPC.
Plan Implementation: Local Panchayats were authorized for implementing their respective development plans, programmes and projects and make them responsible for their maintenance at the village, town and district levels. A supervisory Committee had constituted under the stewardship of a member of National Panchayat and LDO as the secretary of the Committee to supervise the implementation of all the development initiatives to maintain and ensure the financial discipline. The Act had also created the User’s Committees for the operation of the local institutions at the lowest level.
4.2.2 Fiscal and Operational Frameworks
After the dismantled of the Rana regime (1846-1950), the country was open to the outside world in 1951. The Panchayat regime adopted the system of mixed economy for the achievement of its development goals. The first planned development scheme had also begun during this period. During the first development plan, domestic resources were insufficient even to meet the regular expenditures of the government. During the period of 2nd, 3rd, 4th and 5th development plans, the local resources contributed only 23%, 47% and 33% respectively to meet government's expenditures which even decreased during 6th, 7th and 8th development plans (Pant, 1989).
During Panchyat period, some Acts and Rules had provided some financial power to local units (LUs). They were: Village Panchayat Act (1961), Town Panchayat Act (1962) and Panchyat Development and Land Tax Act (1964). Village Panchyat Act, attempted to empower the village units to levy taxes which included a levy on land, sales and purchase of goods in Haat Bazar. Similarly, the town development Act empowered the town panchyats to levy house tax, vehicle tax, fees on fixation of price of the houses, tax on water and electricity, fair-stall taxes, trade and professional taxes, sand and stone taxes. Then Panchyat development and land tax (PDLT) was introduced as a pilot project that started in Budhabare village panchayat of Jhapa district in 1964. It was a new system of collecting land revenue through landlords, tenants and owner cultivators on the basis of
103 annual crop yield. Major features of PDLT were to fix tax rates locally by the local units, levy tax on the basis of yield of the main crop produced in the year and levy the tax not on the basis of the land area but on the basis of the production. It was suspended during 198l-82 as the government introduced the decentralization Act in 1982 (Pant, 1989 and Gurung, 2002).
The Decentralization Act (1982) had provisions to promote the capabilities of the local people in planning and implementation of development initiatives through the mobilization of the local resources as per its geography, socio-culture and economy of the concerned areas. The Act had also introduced Panchayat development and land tax in their respective areas. Eighty five percent of the revenues collected had to remain with the village or town Panchayats, ten percent had to go to the district Panchayat and the remaining five percent to the consolidation fund of the central government. The LBs had also received grants-in- aid from the central government (Awasthi and Adhikary, 2002).
4.3 The Third Phase: Multiparty Epoch (1990-2006)
The beginning of the decade of nineties of the twentieth century was an era of a rapid change in political scenario around the world. First, ending of the prevailing cold war and then the democratization of the Eastern Europe and downfall of the Soviet Block necessitated openness in the societies and Nepal was no exception. Accordingly, the partyless Panchayat system and its anti-democratic characters had fuelled a nationwide dissatisfaction against it. Consequently, the peoples' movement - I of 1990 restored the multi-party democracy and the active monarch had made the Constitutional one and established peoples as sovereign by promulgating a new Constitution.
The new Constitution of 1990 established Nepal as a bit more inclusive state by explicitly mentioning it as 'multi-ethnic, multi-lingual, multi-religious and democratic' by stating that all its citizens are equal irrespective of race, caste, religion, gender and ideology. Theoretically, it gave all the communities the equal rights to preserve and promote their languages, cultures and scripts and to educate their children in their own mother tongue and freedom to practice their own religion and many top leaders of big political parties even said that it was one of the best Constitutions in the world. Despite the above Constitutional provisions, many groups particularly the indigenous peoples, Dalits, Madhesis and women intellectuals and activists of Nepal have pointed out that the newly promulgated Constitution was flawed which carried on many contradictions of the old Panchayat system. The parliamentary political parties who led the political movement of 1990, in essence, did not challenge the very unitary, centralized and hierarchical
104 Panchayat system and instead they had carried out almost the same governance policy and institutional system to run the country from centre to the local levels.
As stated above, in this third phase that begun from 1990s, have promulgated new Laws, Acts and Regulations including different development plans pertaining to the decentralization and local governance in the country. After the popular political movement of 1990, a new Constitution was promulgated which has made provisions for decentralization. Article 25 (4) of this Constitution stated that the decentralization should be the means for ensuring optimum participation of people in governance and hence enjoy the benefits of democracy. Many studies, publications and reports have thus highlighted the major policy and legislative frameworks of the Eighth Plan, DDC, VDC and Municipality Acts and Rules (1992), High Level Decentralization Co-ordination Committee (1996), 9th Plan, Local Self-Governance Act and Regulations (1999) and Tenth Plan. All of these have attempted to provide Constitutional bases for decentralization in order to increase the roles and responsibilities of the LBs (Shrestha, 1999).
Although the Constitution of the Kingdom of Nepal 1990 stated that, the responsibility of the state lies in maintaining conditions suitable to the enjoyment of the fruits of democracy through a wider participation of the people in the governance of the country and by way of decentralization. It did not make any specific provisions or the structures and the roles of LBs for the decentralization of powers and authority. The Constitution of 1990 left these issues to the Parliament that would make relevant laws to the local self- governance. Another factor in doing this was that the framers of the Constitution did not have much time to deal on these and that there were no clear visions and modalities expressed by the political parties on these issues7.
The 8th five-year plan (1993-97), the first ever plan formulated after the democratic movement of 1990, while defining the objectives and policies of decentralization stated that the fundamental basis of decentralization was to empower the villages, towns and districts but not the centre. The main thrust of decentralization was given to upgrade the capacities of the LBs under the leadership of the elected representatives of the peoples and reforming the administrative and management system.
The 9th five-year plan had mentioned about the policies and programmes regarding decentralization and LBs. Decentralized policies appeared more pronounced in this plan.
7 Based on the personal communication with Mr Daman N Dhungana, former member of the 1990 Constitution Recommendation Committee, May 2006.
105 It aimed to strengthen the local units to take the responsibility of formulating and executing local development plans by them. It was supposed to achieve by institutionalizing the LBs, increasing peoples' participation in mobilizing and distributing the local resources, social and economic development of geographically disadvantaged areas, improvement, expansion and development of suitable local technologies, empowerment of women, indigenous and backward communities of rural areas, enhancing the participation of local people for sustainable development, establishing technological and human development infrastructures in rural parts of the country.
This plan included the policies for wider devolution of powers, responsibility and resources to LBs along with the adequate supporting mechanisms and increased roles for the NGOs, CBOs, CSOs and private sector. Notwithstanding the absence of obligatory Constitutional framework, different governments formed after 1990 have designed supportive policies and regulatory frameworks. Briefly, the 9th plan had the following policies on decentralization:
i) Institutionalization of participatory governance in resource mobilization, allocation of balanced and equitable distribution of resources mobilized; ii) Consolidation of LBs and institutionalization of the process of the participatory development; iii) Strengthening the relationship between the central government and the LBs; iv) Develop districts as development centres in accordance with the concepts of decentralization and regional development; v) Making LBs responsible to local peoples by gradually transferring the responsibility at the local level; vi) Increase transparency and accountability of the work performance of LBs, and; vii) Make LBs as self-sustained bodies by identifying and mobilizing their own economic resources.
Decentralized local governance and consolidation of LBs were the main components of development on which the Ninth Plan had given highest priority. It has also emphasized on the autonomy of the LBs both in legal and policy document. This plan mentioned the following programmes related to decentralization:
i) Adopt favourable conditions towards developing suitable and necessary leadership and human resources to implement decentralization schemes; ii) Develop a training centre under the Local Development Training Academy (LDTA) specially to develop the technical capacity of VDCs;
106 iii) Providing continuity to the local development grants, and; iv) Provision for monitoring and evaluation by creating a monitoring and evaluation section and district development problems solving committees within DDCs.
4.3.1 Institutional and Legal Frameworks
In order to introduce the decentralized local governance as envisaged in the Constitution of 1990, a High Level Commission was formed under the Prime Minister in 1991 with an aim of recommending new policy measures in the changed political context. The Commission laid special emphasis on the administrative and bureaucratic reforms. It suggested many recommendations related to the devolution of powers and authorities of the centre to the LBs with the spirit of the local self-governance and decentralization as enshrined in the Constitution.
Similarly, a High Level Decentralization Co-ordination Committee (HLDCC) was constituted under the stewardship of the Prime Minister in 1995 to bring appropriate background information to design and formulate effective and practical decentralization initiatives. After detailed study of the past reports, attempts and active participation of the wide range of stakeholders such as national political parties, representatives of the local authorities, media and CSOs on decentralized local governance, the Committee issued a policy guideline. It recommended for appropriate legislative reform and implementation of strategies on different aspects of decentralization in view of the democratic change and challenges of development facing the country. It also recommended for the re-structuring of the LBs at all levels in order to transfer the political, administrative and judicial authority, powers as well as the resources to them. Based on the recommendations of the Committee, the government in 1997 promulgated an ordinance related to the structure of the LBs and fixed a date for the local elections. As per these changes, the second election for LBs was held in May 1997 and about 200,000 representatives were elected to the LBs. Based on the recommendations of this Committee, the LSGA was prepared and parliament passed the bill with appropriate amendments leading to the enactment of the LSGA and Local Self-Governance Regulations (LSGR) in 1999.
According to LSGA, there are a total of 41,014 (75 districts, 58 municipalities, 3,913 VDCs, 36,041 municipality and VDC Wards and 927 DDC Ilakas) LBs divided under 14 zones.
107 There is no doubt that the LBs are very important local institutions that control local level development programmes and co-ordinate all local level development initiatives as well in respective villages, municipalities and districts. To provide an overview of the whole institutional (structural) framework of Nepal, there are different levels and units of state structure ranging from micro to meso to macro level as follows: Figure 4.1: Overall State Structural Framework of Present Nepal
Nation Capital: Kathmandu
Macro Level Development Regions 5
Zones 14 4 to 8 districts in each Zone Meso Level DDCs comprise of Municipalities and Districts (DDCs) VDCs with varied 75 population size. Mountains: 16, Hills: 39 and Tarai Plains: 20
Ilakas 927
Villages (VDCs) Municipalites Micro Level 3,913 58
Lowest tier of elected Wards Wards Representatives (36,041 9 per VDC Numbers vary Wards of both VDCs and Municipalities)
Source: Adapted from LSGA (1999) 108 The government and the major political party leaders have claimed that the LSGA was one of the most comprehensive legislations with a far-reaching consequence that the country had ever formulated and implemented in respect to decentralized local governance. The principles and policies of the government on the decentralized local governance have been outlined in this Act, which can be enumerated as follows:
i) Devolution of powers, authorities, responsibilities, means and resources required to make the LBs capable and efficient in decentralized local governance, ii) Building and developing of institutional mechanism and functional structure in LBs capable of undertaking the responsibilities to serve the local people, iii) Orientation of the LBs towards establishing CSOs based on the democratic process, transparent practices, accountability while carrying out the functions devolved to them, iv) Encourage NGOs, CBOs and CSOs to participate in decentralized local governance in providing the basic services for sustainable development, and; v) Develop the local level leadership.
The LSGA included most proposals made in the Ninth Plan to devolve wider authority for planning, service delivery and revenue generation to LBs. The LSGA and LSGR stated that the government would be responsible to formulate the different policies to implement the LSGA as follows: i) Implement the policy, co-ordinate and monitor decentralization through the Decentralization Implementation and Monitoring Committee (DIMC). ii) Monitor and supervise the LBs. iii) Build the capacity of the LBs. iv) Provide financial resources and grants to the LBs and depute secretary to LBs and other staff upon LBs' request. v) Co-ordinate between ministries and departments of the government. vi) Demarcate administrative boundaries and classify LBs, and; vii) Hold periodic elections and suspend or extend the tenure of LBs.
Based on the above policies, LSGA made the following provisions regarding the LBs: i) Creation and operation of the LBs. ii) Composition, work responsibility, duties and rights of LBs. iii) Mobilize taxes, revenues and other resources by the LBs.
109 iv) LBs to work in co-operation with the NGOs, CBOs, UGs, CSOs and private sector. v) The works of other sectors should also be brought under the umbrella of LBs, and; vi) Relation between central and the LBs.
As provisioned in LSGA, the LBs should be responsible for the followings:
i) Deliver sectoral services such as agriculture, education and health by establishing their own sectoral units. ii) Prepare long as well as short-term local policies, plans and programmes for the local development. iii) Co-ordinate and build partnerships with NGOs, CBOs and CSOs in programme planning and service delivery, and; iv) Raise and mobilize revenues from local taxation, fees and other sources.
Government bureaucrats, leaders and activists of the political parties who were involved to promulgate the LSGA claimed that it contains many positive aspects related to the legal provisions for the local governance and devolution of power, authority, responsibility and functions from the central government to the LBs, some of which are as follows:
i) It is a unified statute relating to the LBs (VDC, Municipality and DDC) which supersedes all other previous Acts. ii) Theoretically, it recognized the identity of the LBs as the units of local governance and devolved the powers and authority to them. iii) It contains well-defined legal provisions for decentralized local governance system. iv) Under this Act, the LBs have the authority within its jurisdiction to impose penalty and punishment to those persons defying and act against its decision and directives in their respective areas. v) It attempted to make division of the roles and functions between central government and LBs by limiting the scope of central intervention in the areas specified for the LBs. The roles of the central government agencies and departments have been limited to monitoring and directing, facilitating, enhancing the capability of the LBs and staff deputation, ensuring the financial resources and grants, co-ordination, boundary demarcation and classification of LBs.
110 vi) It has described the roles and functions of each of the local structures and the officials at each level. vii) It has devolved the sectoral functions and services such as agriculture development, health services and promotion of education to the LBs which were the responsibilities of government line agencies before. viii) Theoretically, it made participatory bottom-up planning, periodic planning, resource mapping and establishment of information centers mandatory for LBs. ix) It provided for more accountable and transparent LBs through village, municipal and district councils, Committee systems and audit Committees. x) It encouraged the LBs to involve and co-ordinate with the NGOs, CBOs and CSOs while formulating, planning, implementing and monitoring the development plans, programmes and projects. xi) It has also stated the financial provisions of LBs related to the sources of income, mode of expenditures, book keeping, audit and so on. xii) It expanded the taxation and service fee collection authority of LBs and recognized rights of LBs over natural resources; xiii) It has also pointed out the need to prepare a separate Local Service to be formed by an Act to carry out the function of the LBs. xiv) It has also devolved judicial power to the VDCs and Municipalities to hear and settled the disputes/cases within their respective areas, and; xv) It made a provision to constitute a DIMC to monitor whether the concerned authorities have acted as per the objectives, policies and provisions of the LSGA and to maintain the harmony with the norms related to the decentralized local governance. The Prime Minister heads the DIMC thus formed with other members consisting of the Minister for Local Development, leader of opposition political party, secretaries of the government and representative from LB associations and other political parties as members (LSGA, 1999).
The overriding objective of decentralized local governance is to strengthen the pluralist democratic system, norms and values to promote the peoples' participation. The Tenth Plan recognized and accepted the fact that the decentralization is an important strategy or mechanism for overall national development for providing effective and efficient services, not limiting this only to the responsibility of any ministries or departments or agencies, pursuing it as a national policy and accordingly devolving the functions from the centre to the local level enhancing the effectiveness of the public accountability, transparency and spending (Sectoral Devolution Strategy, 2005).
111 The 10th plan stated that the government would strengthen the decentralization reform process by: i) Providing autonomy to the LBs to act in accordance with the objective of the LSGA. ii) Enhancing the capacity of the LBs to identify their needs, mobilize resources (both internal and external), prepare plans, implement projects and programmes and prepare budgets and accounts to provide better services. iii) Widening people’s participation in local development processes. iv) Creating an environment for the LBs to function responsibly. v) Promotion of transparent, accountable and responsive LBs. vi) Clarify the responsibilities of both the line agencies (central and local) and LBs as well as devolving authority from the centre to the local level, and; vii) Promote the fiscal decentralization.
The 10th plan further outlined the following major actions to empower and strengthen the LBs:
i) Programmes at the central and local levels should be classified along with the corresponding implementation responsibilities. ii) Arrangements should be made for the supply of skilled human resources in the LBs by constituting a Local Service Commission. iii) Timely revisions to be made in the LSGA, and other acts that are in contradiction to this act. iv) An action plan should be prepared and implemented for handing over functions from different agencies of central government to the LBs and for resource decentralization. v) The role and responsibility of the MoLD as coordinator should be made clearer by initiating institutional reforms for effective execution of the provisions in the LSGA.
vi) Resources should be made available by the center to the LBs, which will be increased gradually. Internal sources to be increased by mobilizing internal resources at the local level while managing the expenditure process. vii) Capacity of the LBs should be enhanced for essential financial management, plan formulation, and monitoring and internal management. viii) Periodic plans should be completed for all districts, municipalities, and VDCs. These plans should be implemented effectively through prioritization on the basis of joint work with and participation of NGOs, CBOs and CSOs.
112 ix) The regional offices of the MoLD should be strengthened for formulation of programmes, coordination of implementation, and monitoring and evaluation. In the context of decentralization, authorities and responsibilities of the Regional Administrator and regional-level offices should be made clear. x) A flexible policy should be formulated and implemented for encouraging the LBs to maintain coordination among themselves and implementing other relevant policies according to the local situation without following a uniform approach, and for making distribution and consumption of natural resources at the local level. xi) Priority should be given to using the existing groups while constituting groups for programs to be carried out at the local level, and; xii) Take necessary measures for reforms in the policy, legal provisions, institutional arrangements and their implementation arrangements (Tenth Plan, 2003).
4.3.1.1 Policy and Institutional Frameworks for Sectoral Devolution
The government had begun the sectoral devolution in agriculture and livestock, primary education and health services by devolving specific tasks and responsibilities to LBs from the fiscal year 2001-02. The concerned ministries of the central government prepared guidelines and instructions to this effect that the extension functions of agriculture and livestock, primary education and health services to deliver to the grassroots peoples through the elected representatives of LBs.
As per the provisions made in LSGA, the DDCs have been primarily made responsible for the services of agricultural extension and livestock sector whereas the VDCs were supposed to manage the sub-health posts and the responsibility to run the primary schools has been assigned to the communities with the involvement of the VDCs.
4.3.1.1 (a) Agriculture Sector
A planned development effort in Nepal for agricultural sector was started in 1952 with the funding support from the US Agency for International Development. In 1959, Department of Agriculture (DoA) was created and made responsible for the development and dissemination of technologies in all sub-sectors such as cereals, cash crops, fruits, vegetables, livestock, poultry, fisheries and so forth.
113 Despite a huge importance of the agricultural sector in country’s overall economy, the total government expenditure in this sector has been inconsistent almost all the time. In real terms, expenditure in this sector has generally declined during these years and the share of the sectoral expenditure in Nepal’s GDP has also decreased.
Therefore, government’s major policy on agriculture has been laid down in a 20-year (1995–2015) Agriculture Perspective Plan (APP) with the initiations and support from different donor agencies, as well as in 9th and 10th five-year plans of the government. The APP sought to achieve an annual growth of 5% in agriculture with three major objectives of expediting the agricultural growth through the focused investment and increased factor productivity, reducing the poverty and improve the rural livelihoods, and transformation of a subsistence-oriented agriculture into a commercialized one through diversification and widespread realization of regional comparative advantages.
In addition to poverty reduction, expected impacts of the APP included in improving the food security and better protection of the environment, involvement of women in agricultural development programmes, encouraging the private sector investment and promoting equitable agricultural development. The 10th plan built on the APP, emphasized the need to mobilize the NGOs, CBOs, CSOs and private sector service providers, adopted the commodity-specific policies that would create a favorable investment environment for private entrepreneurs, devolved the responsibility for local- level agricultural programmes to the LBs and strengthened the government’s agricultural stations as resources centers.
The institutional framework for the implementation of the above policies have been determined by the Ministry of Agriculture and Cooperatives (MoAC) and organizations under it at the national, regional, and district levels. At the district level, the district agricultural development offices (DADOs) and district livestock offices (DLOs) operate in all districts to implement the policies and strategies of the government.
In accordance to the mandate of the Decentralization Implementation Plan (DIP), the primary objective of devolution of agricultural sector to LBs was to provide quality services related to the agriculture extension and livestock to the common people through the LBs.
Thus, the devolution of agriculture and livestock services to the district level begun since the fiscal year 2001-02. In order to guide the implementation of devolved functions effectively, MoAC issued instructions and guidelines with regard to utilize and deploy
114 staff as well as the funds by the DDCs in 2002. These instructions and guidelines arranged necessary planning processes, funds release, expenditure management, co- ordination, monitoring and evaluation including the roles and responsibilities of the concerned agencies to perform devolved functions.
The main objectives of these instructions and guideline were as follows:
i) Systematic and effective implementation of programmes relating to district level agriculture extension and livestock service devolved in accordance with the provisions made in LSGA. ii) Contribute to make the foundation of local self-governance strong with public accountability, transparency with new practice according to the places and cost effectiveness with the management of public interest services directly provided by responsive representatives based in LBs. iii) Ensure that the devolved functions will be effective and efficient, as service delivery will take place according to the priority set by the local people, and; iv) Expand the devolution process in accordance with the spirit of the local self- governance by using the experiences gained from its implementation.
In 2002/03, the central government, therefore, devolved authority to the DDCs for implementing agricultural and livestock development programmes and made DDCs accountable for fiscal management of these programmes.
4.3.1.1 (b) Education Sector
The primary objective of devolution of education sector to LBs is to provide quality education services to the common people, as it is a matter of public concern and inherent rights of every poor child living in rural areas. The participation of LBs and other stakeholders are therefore vital for securing qualitative education for each child.
Most of the countries around the world, today, are contemplating some forms of 'education decentralization' and Nepal is no exception. Most governments of different times have experienced drawbacks of the centralized system of education services related mainly to the opaque decision-making processes, fiscal and administrative inefficiency and poor quality and access to services. This process transfers decision-making authority and powers from the central government to the LBs and communities. The extent of the transfer however varies considerably. It ranges from administrative de-concentration to a much broader transfer of financial resources and control to the regional and local levels. While there are valid justifications for decentralizing education system, the entire process
115 would require strong political commitments, will and leadership in order to succeed and achieve desired results. The depth and ultimate outcome of decentralization reforms largely depend on the motivations for reforms and the interaction with various important coalitions within the sector.
Before 1950s in Nepal, education was narrowly restricted to the children of urban and rural elites of higher castes and well-off families. The state did not play any roles for devolving education to the poor and marginalized groups of the society. Most schools were community-based in a sense that the local elites, property owners and members of the middle - class built, controlled and maintained the schools and paid the teachers.
After the fall down of the autocratic Rana rule in 1951, comparatively popular government came to power and established the Ministry of Education and somewhat planned efforts in this sector begun in 1956 with the launching of the first five-year development plan. The government begun giving block grants to the schools but obviously was unable to meet all the needs and aspirations of the people. At the same time, the supports and commitments of the local elites to schools declined sharply particularly after the schools were nationalized in 1971. The children from the poor families and those living in remote areas had very little or no access to education. A long- term policy as detailed in 9th and 10th plans called for making basic education easily available to the poor and disadvantaged groups, including ethnic groups living in remote areas and socially marginalized communities. A further key policy objective was to achieve decentralized management of the education sector.
During 1990s, there had been considerable growth in numbers of schools, teachers, and students but very little was known as to how this investment had affected the quality of the lives of the peoples of rural areas. There has also been a lacking of information about the local resource mobilization, community support and sense of ownership of these local schools.
Regarding the policy formulation and implementation for the education at the central level, the Ministry of Education and Sports (MoES) has been responsible for this including the programme monitoring and evaluation, co-ordination with donor agencies and sectoral programming, budgeting and supervision. Thereafter, the overall roles and responsibilities lie with the Department of Education (DoE) of MoES with an increasing devolution of roles and authority to the LBs. DoE manages and implements basic primary education programmes within the decentralized planning and management framework,
116 which includes programming and budgeting of basic primary education programmes in the country.
At the regional level, there are five regional education directorates, which are responsible to facilitate the preparation of district education plans, monitor implementation of basic primary education in respective districts and provide feedback to DoE on implementation of these programmes. All district education offices (DEOs) are responsible for planning and implementation of basic primary education, supervision of schools, collection and compilation of educational statistics through their primary education and non-formal education sections. Each district has a district education committee (DEC) to formulate plans and programmes, mobilization of resources for educational development and to provide guidance to school management committees (SMCs) and each DEC is headed by the chairperson of DDC and the district education officer acts as a member-secretary of DEC.
Furthermore, schools in each district are grouped into different clusters. Each cluster has one resource centers (RC) and the RC management committee oversees and supports the cluster-level activities such as providing technical and professional support to schools under different clusters, undertake cluster-level planning, programming, collect and maintain school-level information (HMG/N, 2002).
Similar to DEC at the district level, there is a provision of a village education committee (VEC) at the village level. Its main roles are as follows:
i) Formulate the village-level plans and programmes in basic and primary education. ii) Co-ordinate all basic and primary education activities in the villages, and; iii) Assist SMCs in resource identification, acquisition, and utilization, play monitoring, supervisory and advisory roles for SMCs and schools, initiate school enrollment campaigns and encourage children to complete at least primary-level education, maintain and update database for school-going and out-of-school children.
Each VDC has a VEC headed by the VDC chairperson (presently VDC Secretary acts as VDC Chairperson) and consisting of representatives from DDC, SMCs, schools, school inspectors and local social workers. The roles and responsibilities of SMC are to operate, supervise and manage each school, mobilize local resources for development of school and children, keep records of school
117 properties and financial and educational statistics, approve school’s annual budget, get school accounts audited, recruit teachers and provide their remuneration.
A representative guardian chairs the SMC of the community school. Members of a SMC include parents (ie; mothers), ward chairpersons, founders or financiers of the school and a teachers’ representative. The principal acts as a member-secretary of SMC. A representative guardian chairs the SMC of a community school.
Recognizing the provisions made in LSGA to provide authority and powers to LBs to involve in securing qualitative education to each child and also as per the mandate of DIP of the government, devolution in education sector was initiated from the FY 2001-02. In this connection, the government issued 'Guidelines for the Operation of Community Managed Schools in 2002 and then devolution of primary schools had begun. In the budget speech of FY 2002-03, programme to hand over 1,000 primary schools to local school management committees were announced. Thereafter, additional 1,000 primary schools were handed over to the community with Rs100,000 as an incentive to each school for their upgrading.
In addition, the MoES issued an operational manual for the community managed school in 2002 that provides operating guidelines for the community schools, which have entered into agreement with the MoES allowing the schools to run either by LBs or SMCs. However, the manual only covers an agreement with a SMC and no other arrangements have been made in the manual for the management and operation of schools by LBs.
In accordance this manual, a SMC has to be formed by a meeting of parents, which selects the members of SMC as well as the members of teachers' association and the parents' monitoring committee. Meeting of parents also formerly gives its approval to the SMC to run and manage the schools and taken on the responsibility of supervision and evaluate the schools' activities. Central government provides a lump sum grant and incentive grant through the DEO for running the schools and the government reserves the right to issue directives and other guidelines at any time that the school must follow (Operational Manual, 2002).
4.3.1.1 (c) Health Sector
The primary objective of devolution of health sector to LBs is to provide quality health services to the common people. Simple argument for decentralizing health has been that there will be greater community participation in providing the local health care services
118 that would lead to improved service quality and coverage. It is, therefore, perceived that decentralizing the health services to the lower units of government would lead to improve the participation of the local community in implementation of heath services as per their preferences, avoid duplication in service delivery, reduce inequalities between rural and urban areas and improve inter-sectoral co-ordination and communication among different local stakeholders involved.
Judging the past experience, administration and management of the public health services has remained highly centralized and urban-based which had been a sole responsibility of the central government. Since 1990s, however, different plan documents have reiterated the need to involve LBs and other non-state actors in operating and managing district and sub-district-level health units for efficient and effective service delivery. The LSGA also lists out functions, responsibilities and authorities of the villages and districts in matters related to health care provisions.
Considering the health related policies and provisions made in the 9th and 10th five-year plans, the government policy and institutional framework for health sector are laid down in a twenty year second long-term health plan (1997–2017). These plans seek to recognize health as a human right of every citizen and establish equitable access to quality health services to the common people through a sector-wide approach based on this plan. The key elements are:
i) Improve the health status of the population, particularly of the most vulnerable groups, women and children, the rural population, the poor, the underprivileged and the marginalized population. ii) Extend essential health care services (highly cost-effective public health measures and curative services for the appropriate treatment of common diseases and injuries) to all districts. iii) Provide the appropriate numbers, types, and distribution of technically competent and socially responsible health personnel necessary for the provision of quality health care throughout the country, particularly in under-served areas. iv) Improve the management and organization of the public health sector and increase the efficiency and effectiveness of the health care priority to the provision of essential system. v) Develop the appropriate roles for NGO, CBOs, CSOs and private sector in the provision and financing of health services, and; vi) Improve inter- and intra-sector coordination and provide the necessary conditions and support for effective decentralization with full community participation.
119
The 9th and 10th plans had also recognized health sector as a critical issue for mainstreaming the poor and socially excluded groups as it found the delivery of health services in the country was very weak mainly because of the lack of trained health personnel as well as lack of drugs and resources.
These plans had also recognized health issue as a human right of every citizen, identified the challenges affecting the health sector and called for making essential health services available at the district level and below. However, the equity in access to health services to all the people remains elusive.
In terms of activities, this 20 years plans lay down provisions to expand health care services to the LBs. These services include public health measures and essential curative services for common illnesses and injuries. Specialized services that have high costs and low public health impact will be considered only after the needs for essential services have been met.
In decentralizing the health sector, these plans call for the government to: i) Strengthen the existing health and social welfare committees (sub-committees of the DDCs) at the district level and invite representatives from NGOs, CBOs and CSOs to join them. ii) Develop a district-level long-term plan for decentralizing primary health services, providing a “sequenced devolution of services” down to the village level iii) Support the village health development committees and health posts from the district public health offices iv) Develop a district-level programme budgeting system to facilitate the management of the village-based health system and establish a budget for decentralized health programmes in the DDCs, and; v) Strengthen the technical capacity of the LBs for planning, monitoring and evaluation. In order to provide health care services to the people nationwide, the MoH has 11 zonal hospitals and at the district and VDC levels, there are a total of 117 primary health centers, 754 health posts, and 3,187 sub-health posts. About 42,000 female community health workers and 13,000 traditional birth attendants work in primary health care in the country.
Besides the government institutions, various other service providers are providing health services at the central, district, and village levels. These include national and international missionaries, private institutions and NGOs, philanthropic organizations, and voluntary
120 groups. Thus, devolution of basic health services to LBs had initiated after the budget speech of 2001-02. The MoH in 2002 issued a national guideline about the handover of sub-health posts to the local health institutes operation and management committees, which provides a detailed roles and responsibilities to the DDCs, VDCs, funds/accounts controllers' offices and other health organizations of various levels. In FY 2002-03, 468 sub-health posts of 12 districts were transferred to these local committees accordingly. Thereafter, an additional of 566 sub-health posts of 14 districts were transferred in FY 2003-04. As per the guidelines, local level elected representatives would be the chairpersons of these committees and members will be represented from social workers and other marginalized groups of the society.
4.3.1.2 Legal Framework for Sectoral Devolution
4.3.1.2 (a) Agriculture Sector: Legal Provisions in LSGA
The LSGA gives the VDCs and DDCs greater responsibilities in implementing agricultural development plans and programmes of the government, the most important of which are listed in a table below: Table 4.3: Functions, Responsibilities and Authority of LBs in Agriculture Sector
DDCs VDCs Make district-level policy on agriculture and Carry out agricultural development programs livestock development, and formulate and within the village development area. operate programs in consonance therewith, and Arrange for agricultural markets (weekly inspect and monitor the implemented programs. periodic bazaars) and fairs, or assist in Arrange for the seeds, fertilizers, and other organizing such fairs within the village agricultural inputs required in the district. development area. Provide services relating to agricultural Operate veterinary clinics for the prevention extension within the DDC area. and control of animal diseases within the Promote agricultural bazaars and fairs. village development area, and arrange pasture Manage the markets for agricultural products. areas for animal grazing. Keep records of land and livestock within the VDC area. Source: Adapted from the LSGA {(Clause 28-a, for VDCs and Clause 189-a, for DDC)} of 1999 (HMGN 1999e).
4.3.1.2 (b) Education Sector: Legal Provisions in LSGA
The LSGA envisages that the DDCs and VDCs would take on greater responsibilities in implementing education development programmes of the government. The main
121 functions, responsibilities and authority of the LBs as provisioned in LSGA on education and sports are listed below in a table: Table 4.4: Functions, Responsibilities and Authority of LBs in Education Sector
DDCs VDCs Determine priority and issue Establish preprimary schools with own recommendation for the establishment of resources, grant permission for the schools within the DDC. establishment of such schools, and operate and Make recommendations on merit basis and manage such schools. by giving reasons for the approval and Supervise and manage schools operating within dissolution of schools in the DDC area. the VDC area. Assist in the operation and management of Assist in imparting primary education in mother schools in the DDC areas and supervise tongue within the VDC area. and monitor them. Prepare programs for and conduct adult and Formulate policy and programs on adult informal education. and informal education at the district level. Establish and operate libraries. Formulate and implement programs for Prepare and implement plans for the sports and physical development. development of sports, and constitute a village- Constitute a district-level sports level sports development committee. development committee. Arrange for providing stipends to boy and girl students belonging to economically extremely deprived and exploited ethnic groups. Source: Based on the LSGA {(Clause 28-d for VDCs and Clause 189-h for DDC)} of 1999 (HMGN 1999e).
4.3.1.2 (c) Health Sector: Legal Provisions in LSGA
As per the LSGA, the functions, responsibilities and authorities of the LBs in health sector are as follows: Table 4.5: Functions, Responsibilities and Authority of LBs in Health Sector
DDCs VDCs Operate and manage district-level health Operate and manage the village-level health posts, hospital, Ayurved hospital, and health posts, health clinics, and sub-health posts. clinics. Formulate and implement programmes on Prepare and implement programs on family primary health education, sanitation, and planning, maternal and child welfare, waste management in the VDC area. extended vaccination, nutrition, population Assist in the development and expansion of education, and public health. (medicinal) herbs. Grant approval for the establishment of sub- Implement programmes related to family health posts in the VDCs within the DDC planning and maternal and child welfare. areas, inspect and monitor them. Arrange for the supply of drugs and medical tools and equipment necessary for the DDC
122 area and carry out inspection and monitoring of their quality standard. Impose restrictions on or stop the public use of goods and materials harmful to public health within the DDC area. Impose restrictions on the sale, purchase, and use of consumer goods that are detrimental to public health. Source: Based on the LSGA {(Clause 28-g for VDCs and Clause 189-n for DDCs)} of 1999 (HMGN 1999e).
4.3.2 Fiscal and Operational Frameworks
Fiscal framework deals with how different government institutions right from the centre to local levels are being financed. It is a concept of assigning fiscal decision-making powers and management responsibilities to lower levels of government in a decentralized government system. It implicitly assumes that local governments have a certain degree of fiscal discretion or autonomy and that these bodies are primarily accountable to their local constituencies. Fiscal decentralization is relevant to all countries regardless of whether the countries have unitary or federal system of governance.
Whatever plans, policies, laws and regulations are promulgated by the government on decentralization and local governance, their timely and effective implementation are very crucial and important. In order to achieve the overall goals of decentralization, the government agencies, LBs, NGOs and CBOs must have the institutional capacity for successful implementation of such plans, policies, laws and regulations of the government from the centre to the local level. It is also important as to how transparently and accountably these government LAs, LBs, NGOs and CSOs function, how concrete and effective are the partnership and co-ordination among them to implement and achieve the core objectives of the decentralized local governance programmes.
4.3.2.1 Fiscal Framework
Each level of government needs revenues and resources to finance public services it is responsible for. In order to ensure the local governments fulfill their expenditure responsibilities, it is vital that they are provided with an adequate and efficient mix of revenue sources that are match to spending responsibilities with fiscal autonomy and accountability in their constituents. Many countries around the world have therefore placed the 'fiscal decentralization' at the top of the development policy agenda.
123 After the political changes of 1990 in Nepal, the Panchayat Acts of 1963 were replaced by VDC, Municipality and DDC Acts with a view to consolidate the LBs in order to make them more powerful financially by imposing different taxes. The VDCs and Municipalities were given power to collect land revenues from the FY 1997-98. Despite of these provisions to provide power to the LBs, they could not generate taxes and revenues to their fullest potentials for different reasons. Government thus laid emphasized on fiscal decentralization as a policy and legal instrument with the enactment of LSGA to address these reasons and to devolve more authority and powers to the LBs. It has made provisions for taxes, fees and revenue resources for the LBs, which are summarized as follows: Table 4.6: Sources of the Revenues of the DDCs as Provisioned in the LSGA S No Resources Particulars 1. Tax Wool, solvent extraction, herbs, Kawadis, boulders, slates, sand, animal bones, horns, feathers etc. 2. Service charges Road, bridge, pond and irrigation canals. Guest houses, libraries, medical centers, community halls. Canals, irrigation and embankment and local development fees. 3. Fees River rafting, boats, tuins, permission for fishing and renewals. Registration and renewal of water bank. Recommendation fees and others. 4. Sales River sand, aggregates, boulders, slates, soils, swept away wood. 5. Loan Borrowing from banks or other institutions with or without collateral with the approval from district councils and on guarantee from the Government. 6. Other incomes Share from the forest, water, petroleum and other natural received under resources, asset deeds registration fees, tourist entry fee, the revenue royalties for mines etc. sharing arrangements. 7. Grants General and conditional grants from the government. 8. Others Taxes on those who use infrastructure facilities built by DDC, charges or fees on service provided, receive a portion (25%) of the land revenue collected by the VDCs and Municipalities. Source: Adapted from the LSGA, 1999
124 Table 4.7: Sources of Revenues of VDCs and Municipalities as Provisioned in LSGA S No Resources VDCs Municipalities 1. Tax Various taxes related to House and land tax. Land revenue and tax. house and land, land Integrated property tax. Vehicle tax revenue, Haat Bazaar, (registration, renewal). Entertainment tax. Vehicle tax (registration, Rent. Advertisement tax. Professional tax. renewal), entertainment, Commercial video tax and others. rent, advertisement, professional, commercial video, natural resources utilization tax and others. 2. Service Sanitation (use of Parking fees. Water supply, electricity, charge drainage). Tourist site tap, public telephone fee. Sanitation, entrance fee. Park, sewerage and solid waste management garden, view towers. Fee fees. Public lavatories, park, swimming for entertainment such as pools, guest houses, gymnasiums, tourist magics, circus, picnic. sites, hostel, haat bazaar, slaughter house, crematorium, use of washing space, street light, road drainage maintenance etc. 3. Fees Television, video and Approval and recommendation fees. other equipment license Approval of building fees and Attestation fee. Approval and of maps fees. recommendation fees.
4. Sales Soil from fallow government land. VDC property. Dry wood, fire wood, branches, roots and Khars. 5. Loan Loans from bank or other Loans from bank or other institutions with institutions with or or without collateral with the approval without collateral with from municipality councils and on the approval from village guarantee from the Government. councils and on guarantee from the Government. 6. Grants General and conditional General and conditional grants from the grants from the government. government/DDCs. Source: Adapted from the LSGA, 1999
It was only after the enactment of LSGA and LSGR that the tax bases of LBs were significantly widened and rates were set higher than ever before. Revenue sharing between VDC and DDC was also introduced after the enactment of the LSGA. VDCs
125 were made responsible to share, for example, 25 percent of land revenue or land tax with the DDCs. The revenue autonomy of VDCs was also increased.
4.3.2.2 Operational Framework
4.3.2.2 (a) Capacity Development
Globally, the capacity of the central and local governments including the NGOs, civic society groups and private sector to undertake the given roles and responsibilities varies considerably. Capacity here refers to as the human and financial resources to manage the roles and responsibilities given to any government institutions, LBs, NGOs, civic society groups and private sector.
The on-going international and national trend towards decentralized local governance has provoked debates about the required capacity of the central government authority, LBs and communities to plan, finance and manage their overall roles and responsibilities including the need of partnership and overall co-ordination among them. While a common justification for decentralized local governance has been that the LBs were located closer to their constituents that enable them to better manage the local resources so as to match local peoples' needs and preferences. Thus, reviewing, improving and accommodating varying degrees of capacities of LBs have become more important when devolution of powers, authorities, responsibilities including budgets from the central governments to LBs and local communities takes place.
The 9th plan had also emphasized that the LBs were important bases for the decentralized local governance. Therefore, in order to administer and manage the development activities at the local level, effective resource mobilization, promotion of skills, knowledge, information with effective communication system were extremely vital and the LBs should be given the roles and responsibilities to manage all these functions as a whole.
The government then promulgated and implemented the LSGA in 1999 based on the recommendations of HLDCC in 1997 and the vision envisaged by the 9th plan of the government. The LSGA made the following provisions in relation to the capacity development of the LBs:
126 i) Clauses 20 and 184 of the LSGA stated that the central government may, re- classify the VDCs and DDCs on the basis of population, geographical diversity and facilities relating to the transportation, communication, agriculture, education and health, and may make arrangements for the development of those VDCs and DDCs, which have low facilities available and are situated in an undeveloped village or district development areas, by making them affluent with means and facilities with the strong support from the central government. ii) The clause No 27 (1) and 95 (1) of LSGA mentioned that the VDCs and Municipalities may, if it deemed necessary, form an advisory committee comprising of members ranging from 3 to 9, including social workers, intellectuals and persons having technical knowledge and skills so that they could contribute to the capacity enhancement of VDC and Municipalities. iii) Under the obligation of the NPC and the central government on district development plans, the clause No 203 (1) of LSGA stated that the NPC and central government has to determine the estimation of the means and the guidelines to be provided on the basis of the goals of the periodical plan of each district and give direction to the sectoral ministries of central government. iv) The LSGA clause No 206 (1 and 2) has mentioned that the governmental or semi-governmental bodies engaged in different services and developmental works in the district shall, upon the completion of the project started by them, have to transfer it to the concerned DDCs. The operation of the project so transferred will be as agreed between the DDC and the concern bodies. The body which transfers the project pursuant to the sub-section (1) shall have to provide technical and other services to the DDCs and enhance the capability of the DDCs. v) Clause No 207 (1) of LSGA mentioned that the NPC and the concerned Ministry of the government may, from time to time, provide necessary directions to the DDCs in respect of the formulation, operation and monitoring of the district development plans. vi) There shall be one communication, information and records centre, as per the clause No 212 of LSGA, in each DDC to identify the real situation of the district and enhance the planned development process. Such communication, information and records centre shall have to collect information and records on annual evaluation reports of district, objective reports of each VDCs,
127 municipalities and DDC, LBs periodic plans, audit reports of DDC, annual programmes of VDCs and municipalities, overall programmes of DDC, description and progress of programmes of NGOs and CSOs working in district and any other reports conducted in the districts. vii) As per the LSGA (clause No 234), the central government may regularly monitor to review whether the LB has carried out the functions entrusted to it pursuant to the prevailing law, whether it has accorded necessary priority to the poor and backward communities, women and children, whether such matter as the ecological balance has been encouraged and may give necessary directions. viii) In accordance with the clause No 235 of LSGA, the central government may, in order to strengthen, consolidate and enhance the capacity of LBs, formulate and introduce a special programme. ix) As per the clause No 236 (1) of LSGA, the central government shall have to provide the LBs each year with a minimum grant prescribed and also with additional grants on the basis of population, level of development, possibility and capability of mobilizing the internal revenues, requirement of financial resources, regular record keeping of incomes and expenditures, situation of auditing and financial discipline of the concerned LB. x) The concerned ministry of the government shall have to prescribe the development and construction works as the local level (village, municipal and district) programmes. The concerned ministry shall have to provide necessary assistance to make the LB technically capable to carrying out the programmes of LBs {clause No 243 (1 and 3) of LSGA}. xi) The local service shall be formed by an Act for the discharge of the functions of LBs. The operation of that service and terms of the service shall be as set by the Act {clause No 255 (1) of LSGA}. The central government may frame rules required to implement the objectives of this Act. Subject to this Act and the rules framed hereunder, the LB may frame bye-laws in order to operate its functions {clause No 255 (1 and 2) of LSGA}
The LSGA outlined many provisions on decentralization policy formulation and implementation, co-ordination among different ministries, monitoring, promoting and development of the capacity of LBs, proving grants and other resources, re-classification
128 of LBs and giving priority to the LBs having comparatively weaker financial and other resource bases for their development.
The 10th plan had also emphasized the peoples’ participation to enhance the capacity of LBs, increase the central grants and resources to the LBs, encourage the INGOs, NGOs, CSOs, donor agencies and other development partners and agencies to support the LBs for the capacity building, amendment of the other Laws and Acts contradictory to the LSGA, re-examine the LB structures and numbers and take actions accordingly, adopt the policy of sectoral devolution as far as possible, develop and improve the inter-ministerial relationship and co-ordination for the effective decentralization. It has also laid emphasis to review and promote the roles of Local Development Training Academy and link the LBs capacity development programmes with other training and development institutes.
4.3.2.2 (b) Partnership Promotion
The need of the partnership is brought to the fore-front as today's world is facing several problems of complex nature and no single sector or actor will have required knowledge, skills and expertise to address these complexities. A partnership approach provides larger coverage, reaches un-reached vulnerable and poor, provides support for a greater impact, leads to sustainability, reduces costs and provides more benefits, prevents overlaps and duplications, helps each other to learn from each other and provides new innovative ideas and ways of doing things. Based on the skills, knowledge and resources of different actors such as the central government, LBs, government LAs, NGOs and CSOs working together to achieve the common objectives is called partnership approach where each and every stakeholder should involve share costs, benefits and risks as well. However, in practice, the public, private and NGO sector everywhere have advantages as well as disadvantages. When we promote partnership among these sectors, we should analyze these advantages and disadvantages of these actors for better results and partnership should be based on the principles of transparency, accountability, mutual participation, economic and financial sustainability, legitimacy and legality, empowerment and ensuring equity.
Partnership is therefore an important basis to provide basic services such as provision of health, education, drinking water, sanitation, social welfare, disaster management and so on to the poor and socially excluded peoples so as to strengthen the base of the decentralized local governance. A responsive government that works for the poorer section of the society should be able to guarantee the equitable and universal provision of
129 effective basis services by working in partnership with different government and non- governmental actors (DFID, 2000).
The history has shown that the state government can not administer and impose the policies and strategies made centrally for effective service delivery to the people. Such old concept of providing basic services to the entire people has now become obsolete. Therefore, we must come out of the narrow mindedness of bureaucracy and adopt plans and policies that should embrace and involve the local peoples at all levels, local level institutions, CSOs and NGOs work together in partnership for achieving a goal of public service delivery. We need to move ahead with new visions and missions by accepting the opportunities and challenges of the partnership.
The partnership among different stakeholders from the centre to local level institutions including the NGOs, CBOs, CSOs and private sector are equally vital to undertake different functions and responsibilities related with the decentralization and local governance.
Some of the legal and policy efforts to promote the partnership are as follows:
i) Tribhuvan Gram Bikas Programme in 1952 with the help of US and India governments with the lead role of the Nepal government to supply the labors in the name of peoples' participation. ii) NGOs and philanthropic institutions such as Nepal Red Cross Society, Family Planning Association of Nepal, Paropakar Sangha, Lions Club and other Trusts came into existence and active in social sectors but they all were totally dominated by a few elite groups of the society. iii) During the mid-70s, some initiatives were initiated to attract the private sector under the structural adjustment programmes of the government. iv) The Constitution of 1990 in its Directive Principle {clause 25 (2)} had made a provision to adopt the public-private partnership approach for economic development. v) After the 1990, the governments adopted the policy and strategy of inviting NGOs, CSOs and private sector to involve them in local development initiatives. Subsequently, in both 9th and 10th plans of the government, it attempted to establish the fact that the government must encourage the
130 involvement of the NGOs, CSOs and private sector to every development initiatives in partnership with them. vi) The LSGA 1999 under the principles and policies of the local self-governance {clause 3 (d & e)} stated that ‘having the LBs oriented towards establishing CSOs on democratic process, transparent practice, public accountability and peoples participation in carrying out the functions devolved on them’. It further stated that the LSGA encouraged the NGOs and CSOs to participate in local self-governance in the task of providing basic services to the community peoples for sustainable development. vii) An ordinance was promulgated by the government in 2003 (clause 37) to promote the public-private partnership for the investment in infrastructure development and operation. It aimed to attract and mobilize the NGOs, CSOs and private sector for maximum investment to increase the technical and managerial skills and capabilities so that the state would be able to provide the basic services to the people through the LBs, and; viii) Second amendment of the LSGR in 2004 has made the provision for a Committee on public-private partnership promotion at the local level under the chairpersonship of the concerned LB Chief including three members and one member-secretary from local industrial and commercial associations, experts on public-private partnership and the secretary/official of the LB.
4.3.2.2 (c) Co-ordination Development
The co-ordination among different stakeholders from the centre to local level institutions including the NGOs, civic society and private sector were also equally important to undertake different functions of decentralization and local governance.
In order to achieve the self-sustained development, there must be a good relationship and effective co-ordination among multiple institutions and organizations such as the central government, government LAs, NGOs, CSOs, private sectors, political parties and local peoples. It would not be possible to empower the poor and excluded peoples if there is no mutual co-ordination and co-operation among these institutions and organizations. Not only with the local institutions and organizations, LBs should also maintain the co- ordination and co-operation with the local markets and local private service providers, which would be of great value to raise the revenues, promote employment opportunity
131 and reduce the poverty of the local peoples. Therefore, a good relationship and effective co-ordination among different institutions and organizations at the different levels are extremely important and necessary.
Efficient working relationship and co-ordination among central government, government LAs, LBs, NGOs, CSOs and other stakeholders would increase pace if the local development leaving positive impacts of the government plans, strategies, policies and programmes at the grassroots level. It would assist to identify the problems in order to promote better flow of information and knowledge to prioritize the needs of the local peoples. Effective plan formulation process with the involvement of the poor and excluded people will, no doubt, provide a direction for the success.
When analyzing the co-ordination and co-operation at the central and the local level, we are talking about the co-ordination and co-operation among different stakeholders involved for efficient and effective service delivery to the people.
Historically because of the state's centralized system of governance, the state had been involved to do everything for the people through its central, regional, district and village level mechanisms. Different service centers and offices such as agricultural service centers, animal service centers, range posts, Ilaka forest offices, postal services, primary health care centers, health centers, health posts and sub-health posts, primary schools, resource centers and so on are kept in place to provide the intended basic services to the peoples.
There are provisions that different government agencies have to provide different services related to agricultures, livestock, primary to secondary education, health, postal, forestry and other administrative services to the general people from the national to local levels. For this purpose, there are 378 agricultural service centers, 1,000 animal service centers, 23,344 primary level schools, 7,097 lower secondary level schools, 4,102 secondary schools, 89 hospitals, 181 primary health centers, 6 health centers, 700 health posts, 3,131 sub-health posts, 1,091 resource centers, 698 range posts, 92 Ilaka forest offices, 842 Ilaka post offices, 3,074 additional post offices and 31 Ilaks administrative offices (Subedi, 2006).
The 9th plan, LSGA and 10th plan of government had emphasized that the peoples’ participation was the base for the sustainable development. It therefore laid importance
132 of UGs, NGOs, CSOs and private sector’s participation in plan identification, implementation, monitoring and evaluation of the overall development activities. As per the policies adopted by the 9th plan, the LSGA has also adopted the policy that the LBs must give priority to involve CSOs, NGOs, UGs and private sector in all the development activities.
LSGA's broad missions and objectives seemed to strengthen the LBs. It envisaged establishing a direct link between DDCs and NPC to arrange their budgetary requirement for better service delivery at the local level. It further envisaged and expected necessary co-operation from the political parties and its leaders and local level government LAs for the local development.
As per the LSGA, it has made the following legal and policy provisions on co-ordination among different stakeholders for undertaking sustained local development initiatives:
Table 4.8: Legal and Policy Provisions on Co-ordination among different Stakeholders
For VDCs For Municipalities For DDCs Clause 31 (b) states that local Clause 96 (3) states that the Clause 189 (3) states that the DDC level NGOs need to send the consumer groups and NGOs may, subject to this Act, carry out feasible projects on the shall have to be encouraged for the development and the development and the the development and construction works by entering into construction works to the construction works to be agreements as prescribed with any concerned VDC. undertaken in the municipality individuals, governmental or NGOs and such works should be or donors. Information on such undertaken through such agreements thus entered into shall groups as far as possible. have to be given to HMG/N. DDC may, as required, for a sub- committee consisting of represent- tatives of consumer groups, NGOs, backward classes, women, social workers, intellectuals and experts to provide assistance in DDC functions {clause 190 (1 & 2)}. To help consumers groups and To arrange for sending feasible To arrange for co-ordination among other NGOs in the selection of projects to municipalities from the DDCs and different projects and plans formulation the consumers groups and governmental and NGOs, social {clause 31 (d)}. The VDC shall NGOs by discussing on the organizations, consumers groups on encourage consumer groups undertaking of development the subject assigned to them. Also to and other NGOs for the and construction work. To help encourage the local people to form development and construction consumers groups and other consumers group and NGOs in the works to be done in the village NGOs in the selection of subjects assigned to hem and development areas and it shall projects for formulation of mobilize them in the development
133 have such works done through plans {clause 99, 1 (b and d)}. programmes {clause 193, 1 (c and such groups or organizations e)}. {clause 28 (2)}. The VDC shall have to obtain The municipality shall have to While developing the district guidance and prior estimation obtain guidance and prior development plans, the act of of the resources and means estimation of the resources and formulating the plan shall be carried from DDC and other concerned means from HMG/N, DDC and out after holding necessary bodies for the coming fiscal other concerned bodies for the discussions on it in the service year. Even the VDC itself shall coming fiscal year. Projects centers, subject-wise plan have to provide guidance on have to be invited from the formulation committee, the selection of projects and ward committees, consumer integrated plan formulation formulation of plans to the committees and NGOs in the committee, DDC and the district different ward committees for municipal areas and plans have council {clause 197 (3)}. the formulation of service and to be formulated in the basis development programmes for thereof {clause 111 (a and b)}. the forthcoming fiscal year {clause 43, 4 (a)}. Projects have to be invited from the ward committees, consumer committees and NGOs in the village development areas and plans have to be formulated in the basis thereof {clause 43, 4 (b)}. In formulating plans and In formulating plans and There shall be an integrated plan service programmes, the VDCs service programmes, the formulation committee at the district shall have to maintain co- municipality shall have to level comprising Chairperson of ordination with governmental, maintain co-ordination with DDC, parliamentarians within the NGOs, donor agencies governmental, NGOs, donor concerned district development area implementing different services agencies implementing differ- as ex-officio member, co-ordinators and development programmes rent services and developpment of the subject-wise plan formulation in the village development programmes in the municipal- committees as member and any areas to avoid duplication lity areas to avoid duplication other persons as prescribed between VDC and the between municipality and the members. The committee shall co- concerned agencies in the concerned agencies in the ordinate and set the priority of, the investment to be made in any investment to be made in any projects obtained from the subject- service sectors, to co-ordinate service sectors, to co-ordinate wise plan formulation committees among the investors, to among the investors, to and give them a form of the maintain the role of consumers maintain the role of consumers integrated district development plan on procedures of the both, to on procedures of the both, to {clause 198 (1 - 3)}. follow the methods where the follow the methods where the peoples of the village can have peoples of the municipality can maximum benefit from the have maximum benefit from investment and to determine the the investment and to time-table for the implementing determine the time-table for the various programmes (clause implementing various 47). programmes (clause 115). The projects or programmes to The projects or programmes to In formulating the integrated district be implemented by NGOs shall be implemented by NGOs shall development plans and service have to be implemented by have to be implemented by programmes, there shall be a
134 entering into an agreement with entering into an agreement with meeting of governmental and NGOs the VDC. In case where the the municipality. In case where implementing different services and projects or programmes to be the projects or programmes to development programmes within the implemented by VDC carry the be implemented by DDC and co-ordination shall be investment of NGOs too, such municipality carry the maintained with annual programmes shall have to be investment of NGOs too, such development plans {clause 204 (1)}. operated in accordance with the programmes shall have to be The projects or programmes agreement entered into between operated in accordance with the approved by DDC shall have to be the two parties {clause 48 (3 & agreement entered into between implemented by VDCs or consumer 5)}. the two parties {clause 116 (3 groups at the direction of the DDC. & 5)}. The DDC may, as required, contribute to the implementation by external consultancy services for the projects under district level plans {clause 205 (2 - 4)}. The VDCs shall have to be When implementing the When implementing the projects or abiding by the directives given, projects or programmes, the programmes, the DDC has to form time to time, by the NPC and municipality has to form consumer groups through the DDC in respect of the plan consumer groups through the concerned agency from amongst the formulation and operation concerned agency from persons who receive direct benefits (clause 50). amongst the persons who from the project under district receive direct benefits from the development plans {clause 208 (1)}. project {clause 119 (1)}. The projects have to be implemented by NGOs and consumer groups in close co- ordination with the DDC providing up to date records of accounts of their financial transactions to DDC and DDC will be responsible for auditing of their accounts {clause 209 (1 - 4)}. VDC has to encourage the The projects have to be The DDC shall have to appraise the NGOs for the acts of implemented by NGOs and district development plans and identification, formulation, consumer groups in close co- progress made by inviting the approval, operation, monitoring ordination with the representatives of governmental, and supervision, repair and municipality providing up to NGOs and donor agencies {clause maintenance of the village date records of accounts of 211, 2 (b)}. development programmes their audited financial within each village transactions to municipality development area. The NGOs {clause 120 (1 & 3)}. shall have to implement the projects by co-ordinating with the VDC {clause 51 (1, 4 & 5)}. The municipality has to DDC shall have to provide some encourage the NGOs for the amounts to VDC as a grant to be acts of identification, expended in village level formulation, approval, development programmes as operation, monitoring and prescribed (clause 230). DDC may supervision, repair and form a co-ordination committee maintenance of the comprising the chief of the subject
135 municipality development wise units of its secretariat related programmes within each with development. Mayor and co- municipal development area. ordinators of the service centres The NGOs shall have to (clause 244). implement the projects by co- ordinating with the municipality (clause 121). The concerned district level government offices should assist in performing development and construction works within their areas if LBs request to do so. The political parties shall assist the LBs in discharging the functions to be performed by it under the Act and Rules and the police shall assist the LBs to carry out the order or decision made LBs under the limit of law (clause 245, 246 and 247). Source: Adapted from LSGA, 1999
4.3.2.2 (d) Roles of different Stakeholders in Promoting Decentralized Local Governance
Apart from partnership and co-ordination amongst different government agencies, LBs, NGOs, CBOs and private sector for successful implementation of overall goals and objectives of decentralization and local governance as explained above, there are other important actors whose roles are very critical in planning, formulating and implementing the entire decentralization scheme in the country. They include the political parties, associations and federations of LBs and donor agencies.
Political Parties: There is no doubt that the political parties are the vehicles as well as the backbone of the vibrant democratic system. The characters, principles, ideologies, structures and system of governance within the parties largely define the quality of the democracy and their commitments for empowerment of the LBs and grassroots peoples. They thus have a direct and meaningful role in making LBs functional under the multi- party system of governance. The LBs are in fact the local development units, which are managed by peoples' elected representatives for the empowerment and development of the people. As LBs are organized within certain areas, the elected representatives after the elections must be free from any political prejudices to work for the people who elected them and it is only through this that the development endeavors and processes become dynamic, stable and sustainable.
136 Associations and Federations of LBs: Like in many countries around the world, the LBs are organized institutionally for advocating and promoting the devolution of power and local autonomy to LBs in Nepal as well. It has intended to protect their rights and interests. Thus, these associations and federations can make a significant contribution to decentralization plans and programmes by advocating, providing their opinions and suggestions.
Moreover, it is also not possible and practical for the central government to collect required information from local authorities all at the same time. It is therefore necessary to seek opinions, assistance, inputs and suggestions from such associations and federations on important issues such as roles, responsibilities and rights, resource base and capacity of the LBs so as to facilitate and contribute positively for the grassroots development. Besides these, the representatives of these institutions can take policy decisions regarding the advocacy and the development of the capacity of LBs. Thus, after the restoration of multiparty democracy in 1990, LB associations and federations, another type of CSOs, have been formed and functional. They have been playing an important role in improving the policy, legal, institutional, fiscal and operational frameworks for decentralization and devolution of powers and authority to LBs.
It is therefore vital to devolve power, authority as well as to develop the institutional capacity of the LBs to achieve the goals of local autonomy. It would promote an active participation of the local people in planning and implementation of the service delivery and other development activities in accordance with the spirit of the rights to self- determination with the devolution of power and authority to the LBs. The LSGA had also recognized the associations and federations of the LBs as extremely important partners to exercise the multi-party democratic system. Accordingly, the LBs had formed their associations and federations to strengthen the local governance system from the grassroots to national to international level. They include the National Association of VDCs Nepal (NAVIN), Municipal Association of Nepal (MuAN) and Association of District Development Committees of Nepal (ADDC/N).
Donor Agencies, INGOs and other Development Partners: Soon after the political change of 1951, the donor agencies had taken a keen interest on formulating decentralization policies and programmes. In 1970s and 1980s, the concept of integrated rural development programme was developed and implemented with the assistance of many bilateral and multilateral donor agencies. Although these programmes were
137 designed and implemented centrally without participation of the LBs, local people, NGOs and CBOs. After the restoration of the multiparty democratic system in 1990, major donor agencies and INGOs working in Nepal have started supporting in promotion of good governance and decentralization. Some of them have based their efforts through dedicated governance sector while others incorporated decentralization and governance as transversal themes across their programme sectors. The need in recognizing governance as an important issue comes as donors, INGOs and other development partners are increasingly realizing their efforts in poverty alleviation as being significantly restrained to the prevailing absence of good governance. In view of this, it is said that the resurgence in decentralization has been further driven by an increased support of donor agencies addressing the needs of numerous stakeholders such as central government, government LAs, LBs, local people, NGOs, CBOs and CSOs.
It was evident from the varied experiences with decentralization that there were no uniform decentralization policies and strategies all over the world. It has to be sensitive towards the existing political, social and institutional provisions of the country. Furthermore, all donors and INGOs support should be aligned in line with the central government policy and strategy, legislative and regulatory policies related to local financial conditions, local services and their delivery provisions, strategy and programmes for capacity development of LBs, participation of different stakeholders in local governments, effective system of monitoring and supervision of LB performance and co-ordination mechanisms among different actors. These external supports from donors and INGOs for any development initiatives cannot be independent of government policy, legal, institutional, fiscal and operational frameworks.
The recent drive, particularly after the 1990, for initiating the decentralization schemes have been accompanied by an increase in donors support. Many donors and INGOs have invested significant resources and time in promoting decentralization programmes in efforts to improve the governance practices so as to strengthen the democratic norms, values and practices.
From the above review of different policy, legal, fiscal, institutional and operational frameworks, it can be said that the state governments of different times had attempted to implement the decentralization schemes as provisioned in many laws, acts including the LSGA in the country.
138
CHAPTER FIVE
GAPS AND INCONSISTENCIES IN GOVERNEMNT'S POLICIES ON LEGAL, INSTITUTIONAL, FISCAL AND OPERATIONAL FRAMEWORKS
After reviewed the past efforts of different governments in relation to formulation and implementation of policy, legal, institutional, fiscal and operational frameworks in promoting decentralization and local governance in previous chapter, attempts have been made in this chapter to find out how these frameworks are being implemented at the local level and identified gaps and inconsistencies related to these frameworks.
This chapter further deals with the gaps seen to empower the LBs and local peoples, particularly in the context of formulation and implementation of LSGA in devolving roles and responsibilities with transfer of funds and responsibilities from the centre government to LBs in agriculture, education and health sectors. This chapter also attempts to identify inadequacies and inconsistencies on LBs capacity, financial base, partnership and overall co-ordination among different stakeholders including the gaps of different stakeholders such as political parties, federations and associations of LBs and donor agencies in implementing and achieving the core objectives of the decentralization and local governance.
5.1 The First Phase: Early Epoch to 1960
5.1.1 Institutional and Legal Frameworks
The Rana period had been particularly portrayed as a dark period in Nepal's history. They had taken decentralization and local governance for a mere cosmetic purpose. The feudal type family-run administration of Rana accepted the people as sovereign source of the state power. Democracy for them was a term to be used by the ruling elite class per se. Thus, the decentralized structures that they wanted to introduce were also supposed to function and beneficial to them and obviously, they were not serious about practicing the decentralization process in favor of the poor and marginalized people during this period.
The peoples' revolution of 1951 thus demolished a century long autocratic Rana regime and the people saw a window hope for the institutionalization of democracy and
139 subsequently some forms of decentralization. Since then, different regimes have been talking about the decentralization of one form or other in the name of peoples' empowerment and participation, social inclusion and so forth. During the last five decades, the country has had several attempts at decentralization in different names and forms.
However, nothing had happened during this first phase for the promotion of decentralization scheme as all its efforts were engaged to consolidate the power base and centralized governance system of the country.
5.2 The Second Phase: Panchayat Epoch (1960-1990)
5.2.1 Institutional and Legal Frameworks
There had been a continuous exercise on the themes of the decentralization and local governance during thirty years the Panchyat epoch. During this period, the rulers had experimented many different approaches, models and forms of decentralization mainly to sustain and strengthen the elite power base for their own benefits in the name of people’s empowerment, participation, development and so forth. It had attempted, particularly during the mid-1980s, to evolve the participatory planning and people’s ownership in the development endeavors. However, the authoritarian and centralized state structures guided from the above could not yield any results for the development of the decentralized local governance.
It is observed that the Panchayat leadership formed many Commissions, Committees and plans one after another displaying the confusions and dilemmas of the leadership towards the decentralization. The initiatives taken by the Panchayat on decentralization during the 1960s and 70s were largely experimental rather than any concrete steps. Whatever efforts were made during this period were literally confined to establish the administrative and organizational relationship required for the control of the central and local Panchayat structures by the centrally designed laws and orders of the administrative agency. There were no genuine decentralization of functions, powers and authorities to the local Panchayats.
During this period, a number of issues related to policies and processes of decentralization emerged and vanished as well. The most prominent issues were the roles and tasks of LBs, the relationship between the government line agencies (LAs) and LBs,
140 the roles and tasks of legislators versus local leaders, service delivery overlaps and duplication, the degree of autonomy of LBs, accountability, transparency and the scope of LB fiscal authority. It was unable to achieve any tangible progress despite its much- publicized claims of local people’s development and empowerment. Some of the reasons for its failures can be summarized as follows:
i) All the initiatives undertaken during Panchayat period heavily suffered a conceptual dilemma and inconsistencies in policies and processes. It remained merely a cover for continued and consolidated the central grip of all the activities, functions and powers. ii) Many policies and programmes of the Panchayat system on the decentralized governance remained only rhetoric as the system operated under the centralized and feudalistic model of governance. True participation of the poor grassroots and marginalised peoples to the state structures and the entire development remained only in documents. iii) The functions of different government LAs, local Panchayats, zonal and district
administrators, ministries and departments overlapped hugely. Matters of similar natures had created confusions and conflicts between bureaucrats at different levels. Also the district Panchayat which was conceived as a focal point of decentralization schemes and policies had never gained the dignity and the status in relation to the law and order agency as represented by CDOs and Zonal Commissioners. The district Panchayat personnel always remained under direct control of the central government and administration and they were very loyal to the centre rather than the peoples they should serve since their recruitment, transfer, promotion, training, career development and so on had totally depended on the discretions of the central leaders and bureaucrats. The district Panchayat was never allowed to be a complete political entity as a unit of decentralized local governance. iv) The Panchayat system had always lacked the popular support and consensus of the grassroots peoples that could promote the local governance and decentralization. v) Panchayat institutions and the elected representatives had never received due recognition and dignity vital for developing self-identity to the peoples as the heavily centralized policy and bureaucracy dominated the entire state structure and functioning. vi) Administrative decentralization of the Panchayat system had never matched with an equivalent political decentralization. The system could not control the
141 administrative apparatus and was no more than constituting Commissions and Committees passing the resolutions and making recommendations, and; vii) There was a total lacking of bureaucratic understanding of the purpose and spirit of decentralization during the Panchayat system. The entire bureaucracies interpreted it to suit and serve their vested interests.
All these efforts during Panchayat period made no impacts or whatsoever on the concept of local autonomy as the partyless system of governance was not possible to assign the power to local authorities because radical decentralization would naturally weaken the centralized and feudalistic authority of the state, which was the fulcrum of the partyless system. The Panchayat system used the name of decentralization only to establish its different political wings at the local level as well as to show to donors and outside world that they were committed for decentralization of power and authority to the lower units of government with no fiscal authority and effective self-rule and autonomy to the LBs. They also used the donors' funded development programmes and projects to consolidate their power base through its elite staffed government machineries. Despite of formulation of many Commissions, Committees, Acts, Laws, rules, strategies, policies and programmes related to the decentralization and local autonomy during this period, almost all issues and problems related to decentralization and autonomy to LBs remained untouched (Awasthi and Adhikary, 2002).
5.2.2 Fiscal and Operational Frameworks
All would agree that the fiscal decentralization is one of the most important yet least focused areas in Nepal's decentralization experiences and processes and it distinctly lacks a sufficient legal and policy framework.
Decentralization of power and authority to LBs cannot imagine without adequate financial resources. Supporting for and undertaking the local development activities should not fall under the priority of the central government and bureaucracy. The Nepalese experience during the Panchayat epoch shows that the central political leaders, government including its whole bureaucratic set up were not serious to devolve the financial power and authority to the lower units of government. It is evident that the centre wanted to keep power and authority within themselves. The Panchayat period was thus considered as a 'black era' when it comes to empowering the poor and excluded groups for promoting peoples' participation for overall national development. It centralized all judiciary, legislative and executive power and authority within the elite
142 groups of Kathmandu. As a result, no fiscal power and authority whatsoever were given to the lower units of governance though the Panchyat regime had promulgated some Acts to pretend that they were serious to provide authority to impose some taxes. Similarly, there were no provisions to build the capacities of local units of government during this period.
5.3 The Third Phase: Multiparty Epoch (1990-2006)
5.3.1 Institutional and Legal Frameworks
Top government bureaucrats, the leaders and activists of the political parties have claimed that the LSGA was a progressive ground breaking Act which, with among many other provisions, set frameworks to devolve the sectoral functions and services related to agriculture development, health services and promotion of education (basic and primary level) to the LBs. However in practice, nothing has happened to implement all such action plans made in LSGA and the 10th five year plan. Some of the examples briefly are as follows:
i) Still no actions have been taken to make the role and responsibility of the MoLD clearer as facilitator and co-ordinator of LBs by initiating institutional reforms for effective execution of the provisions in the LSGA, ii) There is still no classification of the programmes at the central and local levels with the corresponding implementation responsibilities, iii) Still there are no arrangements in place for the supply of skilled human resources in the LBs by constituting the Local Service Commission. The respective central government ministries manage staffing, planning, budgeting and monitoring of their line agencies based in districts. iv) No review exercises of the progress made in the implementation of LSGA has taken place so far, and; v) There are many districts, municipalities, and VDCs, which have not completed their periodic plans and no actions have taken to implement plans already prepared with the involvement of NGOs, CBOs and CSOs.
143 Moreover, decentralization practitioners Box 5.1: Too Many VDCs to Manage and All Only Talking About Decentralization argue that the LSGA was promulgated and enacted with a generous financial and According to a government official of Kavre DDC, there are too many LBs, particularly, the technical support from many donor VDCs. He says, the process of expanding agencies, particularly the UNDP and number of VDCs had in fact begun from the Panchayat period because of the vested political DANIDA, all of whom fiercely competed interests rather than their development. The VDCs were expanded where they had more to each other to dominate the whole political supporters and well-wishers. The exercise. Many workshops and seminars demarcation of boarder lines between VDCs was made to get votes all the time so that they can were organized in expensive star hotels in stay in power forever. That was why, a huge Kathmandu in the name of number of VDCs have become a burdensome economically to the government today to manage decentralization without consulting the as too many VDCs means the need of too many rural poor, marginalized and other VDC secretaries, which require a high administrative, salaries and other associated stakeholders. This has clearly shown how costs. the scarce resources had wasted in the He was of the view that there have been too name of decentralized local governance much talking only on decentralization and local governance but nothing concrete has happened (Shrestha, 2008). on the ground and no devolution of power and authority to LBs were made so far. That was why LSGA, theoretically, provides roles and the country has now adopted the 'federalism' as its new governance system. responsibilities to LBs to deliver services to the local people for the effective local development (HMG/N 1999e) but in practice, there are many gaps and inconsistencies to implement them because it lacks strategy to empower the LBs. A case study in box 5.1 notes the views of a government official in Kavre DDC.
The LSGA was also not clear on devolution. There is absence of consensus among the political parties on the issues and modalities of decentralization ie; different parties view it differently and interpret to suit their political interests and goals. A clear lack of political commitments from them is visible.
According to decentralization and local governance practitioners, there are many weaknesses and inconsistencies found in LSGA. They are summarized as follows:
i) LBs have continuously been treated as sub-branches of central authority rather than autonomous units. ii) There are too many representatives particularly at the ward level which have confused and dysfunctional. Ward members have had no roles and responsibilities to play in practice, and;
144 iii) The concept of Councils of LBs and its composition lacks clarity and vision. These Councils had functioned and always divided on political parties and ideologies rather than engaging in local development.
5.3.2 Fiscal and Operational Frameworks
As per the legal provisions made in LSGA stated in chapter four, it has given powers and authorities to LBs (VDCs, Munitipalities and DDCs) to generate/mobilize the internal and external sources and revenues for managing their overall administration and local development initiatives. LBs are independent of the centre to mobilize the identified fiscal resources including the human resources, programme planning and management. However, the most important issue that has a direct linkage with the autonomy of the LBs is the extent of the financial autonomy they enjoy. The LBs can be considered as financially independent and autonomous only when they have clearly identified sources of revenues to tap and invest to their plans and programmes as per their discretion and is made accountable to their electorates and people residing within its territories for all these matters. It is further supported by the views of a local political leader given in box 5.2 below:
Box 5.2: Lack of Financial Autonomy to LBs
A district level political leader of Morang district argues that every government formed after the 1990 political movement until now paid no due attention to make LBs financially strong by giving a full autonomy to them to generate fiscal resources without which local governance cannot be sustained. In order to make LBs capable for local service delivery, they require an easier access to and control over financial resources that primarily come from inter-governmental fiscal transfers and internal resource generation. He further added that LBs in Nepal receive less than 4% of the national budget and 10% of the development budget, which are very nominal. He further said that the LBs also lack adequate financial management capacity to enhance their internal resource generation. If local people participate in public decision-making processes and see no result achieved because of the inadequate financial autonomy to generate required resources to deliver the local goods and services, they would become disillusioned and frustrated with the system of local governance, he asserted.
Although the 9th plan, LSGA and 10th plan of government have devolved many important roles and functions to LBs, the central government and its entire bureaucracy in practice have not changed their centralized mentality to treat LBs as the local level governments, accordingly make plans, and implement them in accordance with the spirit of the LSGA. Political party leaders, government ministers and bureaucracy still want to call them as local bodies not the local governments and there are so many hurdles and challenges ahead to convert LBs into LGs.
145 On the ground at both district and VDC levels, if is found that there is a mis-match between the devolved functions to the LBs in accordance with the 9th plan, LSGA and 10th plan, and their existing capacity to undertake these roles and responsibilities. The LBs are very weak in terms of managerial aspects including the organizational and leadership management and structures, working procedures, resource mobilization and management, infrastructure development, human development and management. In terms of planning of LBs as envisaged in LSGA, almost all LBs have failed to do so. No information, communication and record centers have been established and whoever established them, they are unable to collect information and manage them efficiently.
Human resource development of LBs is, no doubt, a part of the whole capacity building initiatives. In order to enhance the capacity of the LB personnel, the central government, government LAs, INGOs, donors, NGOs and CSOs have been involved for orientation and training programmes but so far these efforts have not been effective because the central government lacks necessary national policy Box 5.3: Responsibilities and and co-ordination mechanisms for the capacity Capacity Building of LBs should go Hand in Hand building resulting no improvements in this as expected. A civil society activist of Kavre district expressed that all the plans and policies of government There is also no clear policy, strategy and formulated on different occasions mechanisms of central government in relation to the failed to implement. About LSGA, he said that it has not been capacity building of the LBs as spelled out in LSGA. practical as it attempted to provide different responsibilities to LBs DDC secretariats are not equipped to manage the without assessing their existing human resources efficiently and scientifically. DDC capacities to carry out these responsibilities entrusted to them, has a very low level of administrative efficiency as which have been extremely weak. the existing system gives more importance to the All government plans, policies, laws and regulations also lacked to district based government LAs. Views of a civil provide future direction in society activist of Kavre district about the developing capacity of LBs. implementation of plans and policies of LBs are given in box 5.3:
At the centre, the MoLD, which acts as a focal ministry in strengthening the capacity development of LBs, is unable to undertake its roles and responsibilities effectively. Its present structures, working modalities and conservative perspectives and thinking are not in line with the spirit of decentralized governance and local autonomy. It was observed that the MoLD has not equipped well administratively, technically and financially for the capacity development of LBs and the situation of NGOs, CSOs and private sector is not encouraging either. It is true that the central government, I/NGOs, donors, associations
146 and federations of LBs and local level organizations have been involved to train on institutional/organizational development, office/financial management, orientation on information and communication and so on to the LBs, but all these activities have not been able to embrace the concept of the capacity development in a holistic manner. These activities have been revolving around the organizational management and human resource development per se which is largely insufficient for the meaningful capacity development of LBs. For this to happen, the capacity building has to be major component of the entire decentralization process in the country. The central government itself has to be able to provide strong leadership and direction to co-ordinate all the activities related to the capacity building of the LBs8.
Local participation of local peoples can be a strong motivating factor for capacity development of the LBs. It emphasized that the LBs would develop their local capacities automatically if they were given the power, authority and required human and financial resources. If everything was handed over to them in a whole package, they would use these resources at their best interest and best possible manner. Developing the local capacity is a pre-requisite for decentralized roles and responsibilities and it would be quicker and more cost-effective to begin the process of devolution, which permits learning by doing and build up the capacity through practices by LBs and other local units of government. Developing a professional capacity is a must not only for the local level institutions and bureaucrats but also for the locally elected representatives. There should be devolution of power and authority including the fiscal resources to LBs in a whole package and they would develop their required capacity automatically. But in Nepal, nobody paid enough attention to develop the capacity of LBs.
Moreover, many problems related with the linkages, partnership and co-ordination among different actors, which are as follows:
i) There have been very weak linkages, partnership and co-ordination between and among LBs. It is highly visible particularly between DDC and Municipality as they have no functional and institutional linkages except members of Municipality participating in DDC elections. ii) It has attempted to provide different duties and responsibilities to LBs without adequate authority to carry out these duties and responsibilities. For an example, it has assigned more roles in education and health sectors within LBs
8 Based on the personal communication with a Local Governance Expert in Kathmandu, January 2008.
147 jurisdiction but it had failed to make provisions of required resources (financial and professional competencies) to undertake these additional duties and responsibilities. iii) There are many instances of overlapping planning, implementing and monitoring processes between government LAs and LBs, and; iv) The partnership approach for empowering and development of the LBs, NGOs, CBOs and local people has not taken its roots in real sense.
Major views expressed during the field visits by the respondents on operational, linkages and co-ordination among different actors were as follows:
i) There was no practice of co-ordination and co-operation among different governmental and non-governmental institutions from central to grassroots levels. There lacked inter-relationship, segregation of roles and responsibilities, sources of incomes/resources and arrangement of human resources among them. The government's LAs have been busy all the time to plan, implement and prepare progress reports of their targeted programmes. They were totally responsible and accountable to their departments and ministries but not to the DDCs as envisaged in LSGA. ii) The main objectives of the central, government LAs and LBs were to provide basic services to the people easily in a cost effective manner. All of them should work together in co-ordination and should co-operate with each other for achieving the common goals of serving the people. But in practice, the centre has failed to work as a facilitator, co-ordinate and monitor the performance of LBs. Similarly, the centre has no fiscal relationship with the LBs for promoting co-ordination and co-operation between them. iii) The LB associations and federations were not consulted and represented in LB related policy and decision-making processes of the government. Whatever government did on this, most of them take place on an 'ad hoc' basis and that too in response to the pressure exerted by them to do so. These were not institutionalized and no compulsory co-ordination mechanisms established by the government for better co-ordination and co-operation. The information dissemination and sharing among LBs and central government on decentralized local governance was extremely rare and very poor. iv) The local development plans, priorities, programmes and projects designed and prepared by LBs were altered at the centre without due discussions and consultations with the LBs during the planning processes.
148 v) The central government managed the plans, programmes and projects for the LBs through the government LAs without consulting the LBs elected representatives. NPC and sectoral ministries in Kathmandu should provide overall co-ordination for local development but it never happened in practice. The participatory planning process should be in place for many districts but the local planning and national planning were un-coordinated with practices of non-transparent, centralized top-down commands creating local alienation and frustration. Also, the district level government LAs always wanted to avoid the LBs in any development plans, projects or programmes and they tended to ignore the periodic plans prepared by the LBs. vi) There was no clear allocation of co-ordination roles and responsibilities as well as the ownership for the decentralization processes within the central government. All the top political leaders, central level bureaucrats, government ministries and their line agencies were not serious to provide autonomy and the rights to self-determination to the LBs. vii) It was discouraging that the central government lacks clear guidelines on co- ordination with the LBs to implement the plans and programmes on decentralized local governance. The central government was unable to co- ordinate, monitor and embrace these programme activities bringing all the stakeholders together to achieve the common goal of decentralized reform. Because of this, there has been a thin spread of different programmes related to the decentralized local governance. Because of this, there were many instances of duplication and overlapping of programme implementation from central to local levels. viii) There was no specific central government agency to look after the decentralization and governance sector for effective co-ordination with other government ministries, departments and LBs, there was a clear mis-match between donors and INGOs objectives and programmes with government’s policies and strategies on decentralized local governance. Also, there was no effective co-ordination and consistency between donors’ programmes and government strategies, plans and policies which have a direct bearing on the achievements that these programmes had supposed to gain. The lack of strong and effective co-ordination mechanism at the local as well as at the centre level was the main hurdle to strengthen the local governance programmes. As a result, donors’ programmes and projects were being implemented wherever and whenever they wanted to do.
149 ix) After the promulgation and enactment of LSGA, the relationship between LBs and local government LAs has not been cordial and helpful which has been strained by the fact that most funds for the local development has been channeled through the district level government LAs without any co-ordination with the LBs. In every policy and legal documents, government have time and again emphasized the involvement and participation of NGOs, CSOs and private sector, but in practice nothing has been happening at the all levels. x) There was no horizontal linkage between LBs and LAs working in the same districts. They treated and behaved with each other as rivals not as partners for the local development. xi) Meaningful participation and involvement of LBs and government LAs in the process of information sharing, dissemination and publication were totally lacking at the local level. xii) Since there was no co-ordination between LBs and LAs, they do not exactly know or have no records of different organizations and agencies such as NGOs, CBOs, donor agencies and INGOs working in different sectors of the same district. There were also duplications of the works between LBs and LAs as the central government always wanted to spend the sectoral budget through their LAs as per their system of budgetary management not through LBs. xiii) In all legal documents of the government including the LSGA, a strong emphasis was given for the participatory planning in consultation with district level NGOs and CSOs but these were non-existent in practice. xiv) The existing planning, implementation and monitoring system of the central government, government LAs, LBs, NGOs and CSOs for the local development were very faulty, as a result there was no effective co-ordination and co-operation among them, and; xv) There was no co-ordination at all among LBs, NGOs and CSOs at the local level. All of them worked in isolation and on the whole individual interests have come first rather than the collective interests.
150 5.4 Gaps and Inconsistent in Devolution of Agricultural, Education and Health Sectors
5.4.1 Agriculture Sector
Since 2002, MoAC started devolving district based agriculture and livestock services to DDCs. Upon review of the processes and progresses made so far on this, the following gaps and problems have been noticed during the field study. Although these gaps and problems were interlinked, they were grouped under different headings as follows:
5.4.1.1 Organizational Structures, Staffing, Accountability and Reporting i) The staff of district agriculture and livestock office were facing problems of dual responsibility, accountability and reporting which is illustrated in a box 5.4 below.
Box 5.4: Problem of Dual Responsibility of Accountability and Reporting Prevailed in District Based Government Line Agencies
A government official of Kavre district based LA explained the problems they have been facing on dual responsibility of accountability and reporting much like they did in Panchayat times to administer centrally designed plans and programmes. He said that they have been reporting to DDC, their department and the line ministry for the same jobs they have been performing. As provisioned in LSGA, a DDC can establish a section within it that would be responsible to manage and implement agriculture and livestock services in the district with a prior approval of the government, thus enabling absorption of district-level DADO and DLSO staff. However, to date, no DDC has been authorized to do so, he added. If the government approves a DDC to do so, the MoAC would require terminating its respective DADOs and DLSOs in all districts. So, accountability, responsibility and reporting of the district agriculture and livestock office needed to clarify as to whether it was responsible and accountable to their line ministry or DDC, he articulated.
ii) It was observed in districts that the junior technicians and technical assistants were still part of MoAC. DADOs should be directly responsible to the DDCs according to this provision and the MoAC was suppose to be responsible for technical matters only but in practice, they were still accountable to the ministry, not to the DDC. iii) There were several problems related to the personnel management particularly related to the staff status, condition of employment, supervisory guidelines and procedures and level of the skills and knowledge required to undertake the responsibilities entrusted to those personnel.
151 iv) As per the LSGA (clause 189), the specific activities related to agriculture should be handed over to the DDC and district based government LAs should not perform them. Furthermore, LSGA (clause 243), the ministries concerned were obliged to classify its departmental programmes that were implemented at the local level but the Act did not specify what would be the relationship between the classified functions and those indicated by the Act. DDCs and government LAs have been carrying out activities related to the devolution of agriculture because they have been instructed to do so by the central government officials. v) Practically, DDC has not yet taken the ownership of district-based agriculture and livestock programmes despite provisions made in LSGA, and; vi) Though LSGA have devolved roles and responsibilities of agriculture and livestock services to DDCs, the organizational structures, staffing, roles and responsibilities, institutional mechanisms, budgetary provisions, accountability and monitoring/ evaluation aspects have not been matched in accordance with the devolution of roles and responsibilities.
5.4.1.2 Capacity and Resource Mobilization
i) There was a lacking of required capacity (human, physical and technical) at the local to undertake the devolved functions of agriculture extension and livestock services. ii) District resource mobilization followed an 'ad-hocism' and they were unable to produce plans and programmes based on aspirations, needs and desires of the peoples. It was found that until now the staff of agriculture and livestock service offices has been sent to LBs on deputation and there was no clear-cut policy regarding posting of staff in the LBs. iii) According to LSGA, DDCs should formulate their periodic plans and programmes but resource generation and allocations have not made in a planned manner. At present, since the LBs have no elected representatives, the periodic plans and programmes prepared have kept in dark rooms gathering dusts. Decentralization and local development experts say that these periodic plans and programmes have been prepared from donors' money without any local inputs and consultations. The LBs and local people hence have not owned them and it has therefore been unproductive and unsuccessful exercise, and;
152 iv) Funds were found to be channeled through the district development funds (DDFs) but the level of conditionality of different grants was unclear and some grants have been reduced considerably. There have been a lacking of a common approach and understanding of funds flow and accounting procedures between DDCs and LAs.
5.4.1.3 Co-ordination, Partnership and Networking
i) Like in the central level, there existed no co-ordination and partnership among LBs, LAs, NGOs and CSOs to work in this sector. Each one of them treats others as competitors rather than partners. In Kavre district, a District Agricultural Development Committee has formed under the chairpersonship of the LDO as a mechanism to co-ordinate with DDC and other district based stakeholders. In this committee, the representatives from the Women Development Office, District Forest Office, District Irrigation Office, Agricultural Development Bank, District Land-Prevention Office and District Livestock Office are included whose member-secretary is the chief of the District Agricultural Development Office. This Committee was mandated to deal with matters and issues related to the devolution in agricultural sector in the district but it has not been able to function as desired. The situation got worsened when LBs have been running without the elected representatives from July 2002. ii) In both study districts, there was no co-ordination and networking between programmes and activities run by LBs, I/NGOs, CSOs and CBOs creating duplication of many activities within the same district. It was found in a district that many INGOs and NGOs have been working for the same community without any consultations and co-ordination whatsoever and government authority have no information as to how many INGOs, NGOs and CSOs have been working in the district. iii) There were clear contradictions and in some places created confusions and ambiguity between MoAC issued instructions and guidelines with the provisions made in LSGA in relation to the devolution of agriculture extension and livestock services to DDCs. The MoAC instructions and guidelines for devolution appeared to be inadequate, have a number of flaws and missing links and at times contradictory. It did not say much about the roles of the VDCs and their linkages to the DDCs. There were unclear division of tasks
153 across levels of governments and between the LBs and the user groups/boards/committees, absence of cost calculation and financial impact of the transfer of tasks devolved to LBs, unclear funds flow mechanisms, financial accountability related to the devolved tasks, auditing, presence of under funded expenditure assignments and unclear responsibility for human resource management for the devolved functions. iv) Devolution of agriculture and livestock sector to LBs has been carried out rather in a confused and haphazard manner. Almost all the district-based stakeholders were confused as to what to do and how to implement the provisions made in LSGA in this sector. Practically, there appeared to be confusions as to how LBs would work together to materialize the devolution. So far, no substantial changes were seen in terms of effective co-ordination at the field level. v) Even the top district level officials themselves have different perceptions and interpretations about the devolution of power and authority given by LSGA and as a result, differences in implementation of given power and authority were seen in the fields. District level stakeholders were un-clear about the overall devolution, its objectives and benefits as well. vi) There was no co-ordination mechanism developed between DDCs and LAs to implement the activities related to the devolution of agriculture and livestock services. DDCs and LAs could not be more people-oriented and there existed no better links with the LBs for better facilitation and co-ordination. Owing to the lack of co-ordination among district government LAs, LBs and others, there were duplication of functions, and; vii) Not only the functions and activities related to agricultural extension and livestock services, the issues of staffing, budgets, plans, programmes, institutional mechanisms, accountability and monitoring and evaluation aspects have not taken seriously when devolving agricultural services to LBs.
5.4.1.4 Monitoring, Evaluation and Follow Up
i) There were many problems related to the auditing and monitoring of the agriculture and livestock programems and services devolved at the district level. ii) There was no clear spell-out as to who was responsible for regulating and monitoring the implementation of the devolved functions to LBs. Projects
154 working for the support of agriculture and livestock services with foreign donor support had their own priorities, rules, monitoring mechanisms and there was no linkage of these with the government mechanisms. iii) LBs and LAs have posted 'Citizens' Charter' outside their offices giving details of what services they were providing with timeline but in practice these did not happen in practice. There was no system for compensation if these promises were not met and no follow up mechanism was in place regarding this, and; iv) Due to the worsen political and security situation, conditions of implementing devolved functions on agriculture and livestock to the rural areas seemed highly negligible as the VDC secretaries were unable to go to their respective villages to serve the people instead they were confined to and working from the district headquarters. LBs and government LAs were therefore cut-off from working directly with the VDC and community level people.
5.4.2 Education Sector
The MoES in 2002 started devolving district based education functions to DDCs. Upon review of the process and progress made so far on this sector, the following gaps and problems were noticed during the field study. Although these gaps and problems were interlinked with each other, they were grouped under different headings as follows:
5.4.2.1 Organizational Structures, Staffing, Accountability and Reporting i) As per the clause 189 of LSGA, the specific activities related to education should be handed over to the DDC and government LAs should not perform them. Furthermore, LSGA clause 243 states that the ministries concerned are obliged to classify its departmental programmes that are implemented at the local level but the Act did not specify what would be the relationship between the classified functions and those indicated by the Act. ii) There were problems in devolution of education to LBs as teachers favored their accountability to district education office/officer rather than the LBs. iii) Teachers' training has not been effective and teacher absenteeism has been a major problem in rural primary schools. iv) The guideline prepared by the MoES has a number of flaws and missing links. There have been unclear divisions of tasks across levels of governments and between the LBs and the user groups, boards and committees. There was an
155 absence of financial impact of the transfer of tasks devolved to LBs and unclear funds flow mechanisms. v) There were inconsistencies among the guidelines, inadequacies in the guidelines and a number of contradictions even within the provisions made in each guideline, unclear financial accountability of the fund related to the devolved tasks, presence of under funded expenditure assignments, un-clear responsibility for human resource management for the devolved functions, and; vi) The 7th amendment of Education Act (2001) had made provisions for SMCs and provided the communities with the formal rights to manage the primary schools as a means of improving both quality and equity of access to primary education. SMCs were also responsible to identify the households with school- going age children who were not attending the schools would be identified for follow-ups and provide support by the community to get their children enrolled in schools. It also organized school enrollment campaigns to help bringing the children who have dropped out back into schools, monitor their attendance and encourage them to continue with their studies. Although, all these were mentioned in the Acts and guidelines by the MoES in which the community participation was highly emphasized as a key strategy for decentralization but so far a very little was done to this.
5.4.2.2 Capacity and Resource Mobilization
i) The linkage among the SMCs, LBs and DDCs was just like a cheque router without any functions of co-ordination and facilitation. Because of this, LBs looked indifferent towards the issues/problems related to the local schools. ii) The provisions of funds made by DEO to schools seemed significantly inadequate in relation to their needs. iii) It seemed that the concept of community managed school (CMS) was favorable for schools located in urban/rich areas which could mobilize internal resources but unsuitable for schools of rural areas which cannot generate their own resources. This has ultimately created widening disparities/discrimination in education between the urban and rural areas. The schools in urban or semi- urban areas also have not followed the SMC guidelines in forming the committees and not all the Chairpersons and Committee members were parents of the school-going children. iv) The basic human, material and financial resources and capacity were extremely limited in community managed schools. The majority of primary schools of the
156 study areas were quite deficient in buildings and educational materials. Also the educational materials were not distributed on a timely manner. v) The SMC has no control over salary payments to the teachers and other resources of the school. It was rather controlled by DEO. vi) Not only the functions and activities related to educational services, the issues of staffing, budgets, plans, programmes, institutional mechanisms, accountability and monitoring and evaluation aspects should be taken into serious consideration when devolving educational services to LBs, and; vii) The Resource Centers (RC) management committee have not been able to oversee and support the cluster-level activities such as providing technical and professional support to schools under different clusters, undertake cluster-level planning, programming, collect and maintain school-level information and data.
5.4.2.3 Co-ordination, Partnership and Networking
i) Like in the central level, there existed no co-ordination and partnership among LBs, LAs, NGOs and CSOs to work in this sector. Each one of them treated others as competitors rather than partners. ii) There were clear contradictions and confusions among the LSGA, Education Act and national guidelines provide by the MoES. LSGA stated that the LBs should involve to supervise and manage the schools but the guidelines prepared as per the seventh amendment of the education Act did not specify the roles of LBs in this respect. Although, there was a provision of forming a SMC by a meeting of parents, the status of this committee was not clear though it stated that it should monitor and evaluate the work of SMC. According to this guideline, the amount of work to be carried out by SMC seemed very huge. However, the professional nature of some of the responsibilities, for instance, forming subject-wise committees seems to be beyond the scope of the SMC made up of the general people having no knowledge on these subjects and incorrectly placed them at the individual school level. The respective functions, duties, and powers of the VDCs, municipalities and DDCs concerning education were also insufficiently separated and defined. For instance, while the LSGA has given the VDCs a mandate to supervise and manage the schools, the regulations did not provide a framework for the management of schools by VDCs. In addition, the Education Act envisaged the management of schools as
157 the responsibility of school management committees - not to the VDCs. There was no doubt that these will affect negatively not just to the schools but also to all the community and locality. Practically, decisions on these subjects and issues would appear to be better placed at the VDC level which could co- ordinate linkages vertically with DDC and DEO as well as horizontally with other community schools where the same standards across schools must necessarily apply. Views of a government official of Morang DDC on this subject are inserted in a box 5.5 below:
Box 5.5: Locally Elected Groups Shouldn't Replace LBs for Local Service Delivery and Co-ordination
A DDC official of Morang district have explained that government had introduced another for of 'decentralization' in education sector by channeling central government funds to the locally elected groups such as SMCs directly who are empowered to manage key aspects of education in their localities. He said that the important government responsibilities and functions such as prioritization and overall co- ordination in key sectors like education and health at the local level should be the responsibility of the LBs not for local groups like SMCs who are not responsible and accountable like a VDC. In his view, this approach has severely undermined and ignored the established legitimacy of LBs. It is so because LBs are those institutions, which should provide these services eventually, he emphasized. iii) There did not appear to be any overall systematic plans or targets regarding the introduction of the CMS concept. Some of the schools at the district seem to have been reluctant to adopt the CMS concept because they fear that the central resources for CMS will be inconsistent and or even it might disappear, fear of greater control of the schools by the government and lack of clear-cut policy on autonomy of school management committees. iv) DEOs have not given priority to the CMS concept in practice. v) LBs did not seem to be interested in participating in the administration of education and have reduced the financial contributions to schools that were running under CMS concept. vi) The implementation of the CMS concept was confused and unclear to the schools. Major gaps in guidelines issued by the government were the lack of its systematic introduction and required orientation. vii) Despite the legal provisions for devolution of school management and operation to LBs, they were not involved for this as the government on the other hand handed over this responsibility directly to the community without knowledge of LBs. viii) Common people’s participation in education sector was still lacking.
158 ix) There was a need to re-define the rights of LBs and Teachers Service Commission. The relation between SMCs and LBs should also be re-defined and clarified. School Principals should be given more power and the participation of parents to SMC should be given a high priority, and; x) The SMCs were not strong and were highly dominated by local elite groups.
5.4.2.4 Monitoring, Evaluation and Follow Up
i) While implementing the devolution of education sector, there should be clear provisions on rights, roles and responsibilities, accountability, pays and benefits of teachers. ii) The roles and responsibilities of education service commission should be clarified. iii) The provisions of the LSGA regarding the responsibilities of LBs in the area of education required changing the Education Act to handing over schools to the community iv) Although, schools have been transferred to the LBs, they were still accountable to DEOs, which provide them funds. v) Decentralization of authority to the local levels and devolution of power to finance the decentralized activities could potentially ensure delivery of quality basic and primary education to the general population, including people in disadvantaged communities. To attain this, a mix of (external) interventions and (local) evolution in mindset and practices would be required. vi) Despite of many strategies, policies and legal frameworks formulated in education sector, a large number of the school going age children have no easy access to education due to many factors such as socio-economic, cultural, geographic and religious factors shape the lives of the girls and boys in many parts of the country. Among many other things, the victims of this state policy have been the Muslims, Madhesi, indigenous groups as their children have very limited access to education, and it has been the main cause for high dropout among children of these groups not speaking Nepali as compared to those families who speak Nepali, and; vii) There were many discrepancies and contradictions in rules and regulations among LSGA, 10th Plan and the guidelines provided by the MoES as well as the roles of the LBs in supervising and managing the community schools. There was an urgent need to review all these rules, regulations and guidelines
159 in order to co-ordinate and harmonize to increase the community ownership of such schools.
5.4.3 Health Sector
Judging the past experience, administration and management of the public health services has remained highly centralized and urban-based which had been a sole responsibility of the central government. Since 1990s, however, different plan documents have reiterated the need to involve LBs and other non-state actors in operating and managing district and sub-district-level health units for efficient and effective service delivery. The LSGA also listed out functions, responsibilities and authorities of the villages and districts in matters related to health care provisions. However, in reality, VDCs and DDCs have not been able to perform these roles and responsibilities.
Since 2002, MoH started devolving district based health services to LBs. Upon review of the process and progress made so far on this, the following gaps and problems in devolving roles and responsibilities to LBs have been noticed during the field study. Although these gaps and problems were interlinked, they have been grouped under different headings as follows:
5.4.3.1 Organizational Structures, Staffing, Accountability and Reporting i) Although, health posts and sub-health posts have been transferred to the LBs, they were still accountable and report to district health offices, which provide them funds, not to the LBs. ii) Not only the functions and activities related to health services but the issues related to the staffing, budgets, plan formulation, programme implementations, institutional mechanisms, accountability and monitoring and evaluation aspects have not taken into serious consideration when devolving health services to LBs. iii) As per the LSGA (clause 189), the specific activities related to health services should be handed over to the DDC and government LAs should not undertake these responsibilities any more. Furthermore, the LSGA (clause 243) stated that the concerned ministries were obliged to classify its departmental programmes implemented at the local level but the Act did not specify what would be the relationship between the classified functions and those indicated by the Act.
160 iv) Respondents from the fields said that there was an absence of health professional in remote areas and the peons have been providing health services. Whatever health professionals they have there, they were insensitive towards the needs of the poor and socially excluded peoples. v) There were inconsistencies and inadequacies in the guidelines and a number of contradictions even between the provisions made in guidelines and LSGA. There have been unclear divisions of tasks across levels of governments and between the LBs and the user groups, boards and committees. There was an absence of financial impact of the transfer of tasks devolved to LBs and unclear funds flow mechanisms, and; vi) The main purpose of the devolution has been faded due to the non-involvement of the LBs from the initial process of forming sub-health posts implementation and monitoring committee.
5.4.3.2 Capacity and Resource Mobilization
i) Common people living in rural areas have no awareness about the health services being provided at the local sub-health posts. There was a lack of knowledge on the benefits of the modern health services due to the over reliance on traditional healing methods. ii) Due to the commercialization of the public health services in country, it was very expensive and was almost beyond the access of a great majority of poor and excluded peoples as most of them live in remote and undeveloped areas and are illiterate and poor. They were not in a position to reap the benefits from the current health service delivery system. iii) There was a lack of institutional capacity of LBs to manage the sub-health posts, which was a major problem. There were also no clear-cut provisions for human resources, training and so on. iv) There was no adequate financial and clear delineation of new financial flow mechanisms to manage the health services at the local level. A significant financial gap existed between what was available and what was being planned which can compromise the health sector's ability to provide equitable, efficient and good quality services under the decentralization scheme. v) Revenue allocation have not been able to take existing local expenditure responsibilities and own resources into account. The local freedom that the local level has in deciding what resources to devote to health services together
161 with local budgetary realities and financial procedures greatly influences the operation of the health service system, and; vi) The central level policies on devolution of power and authority on health sector have not been able to consider local conditions and capacities. They have ignored that the decentralized arrangements can bring a new management burden on the less capacitated LBs and qualified health workers and managers were always in short supply there. It was a fact that the new changes would change the roles of the central ministry from line management to policy formulation, technical advice and programme monitoring and there was a need for systematic retraining and re-orientation for them to work in a changed situation that was not happening.
5.4.3.3 Co-ordination, Partnership and Networking
i) Like in the central level, there existed no co-ordination and partnership among LBs, LAs, NGOs and CSOs to work in this sector. Each one of them treated others as competitors rather than partners. According to the information received from the districts, health sector was governed by different health Act of the government, so it was hard to find out required co-ordination in providing health services in the districts. Also there was no formation of district health co-ordination committee for better co-ordination of health service activities in districts. At the VDC level, the situation was even worse. In Devbhumi Baluwa VDC of Kavre, there were two local medical centers ie; one sub-health post and one Ilaka Aurbedik Health Centre and there was no existence of co-ordination and co-operation between them even though they both come under the MoH. In terms of the services being provided to the local people by these two centers, around 15-20 people daily visited the local sub- health post whereas there was a few or no service seekers to Ilaka Aurbedik Health Centre as the local people were not aware about the Aurbedik Health Centre and services they provide. ii) It was evident from the field study that there were differences among functions, roles, responsibilities and authorities given by LSGA to LBs and the national guideline. The LSGA stated that the VDC would operate and manage the sub-health posts. This has not been further elaborated and hence there remained gaps to link the VDCs and DDCs to devolve health care services. The national guideline issued by MoH attempts to empower the sub-health
162 posts implementation and management committee external to the VDC but chaired by VDC Chairperson. The roles and responsibilities of this committee were not clear but it simply said that it would be formed with the initiation of VDCs. Now the question is if this committee was to be formed under VDC, will it be accountable to the VDC? If so, the VDC would in effect to manage the sub-health posts through a sectoral management committee. The management framework of the national guideline provided explanations regarding the services to provide, however, the issue of authority and power to prioritize did not appear to be clear. iii) The central government ministers and top bureaucrats have not been sensitive enough to provide the required health services to the women and marginalized groups, and; iv) The LSGA made provisions Box 5.6: Ground Reality about Sectoral {clause 28 (g) for VDCs, clause 96 Devolution of Health Services
(g) for Municipalities and clause A district level government official of Kavre district stated that he had heard about the 189 (n) for DDCs)} to handing 'sectoral devolution' of health services about over the sub-health posts to the seven years ago. According to him, a committee was also formed then to look into local health management this matter but it could not even organize a committees. In Kavre district, there single meeting to this effect. The terms of the LB representatives had expired in July were 80 sub-health posts, 9 health 2002 abruptly and from there on, nothing posts and 5 primary health care had been initiated on sectoral devolution of health services in district. centre and in accordance with the LSGA, district health office (DHO) was suppose to hand over only the sub- health posts to DDC but so far it has not been able to take these over as yet. It is further supported by the views expressed by a district level government official of Kavre district in box 5.6:
According to the officials at the DHO, the DDCs have no capacity to take these over and also the provisions made in LSGA did not provide enough practical guidelines for enhancing the capacities of LBs and the local health management committees to address the issue of social exclusion. Furthermore, the LBs and the committee failed to undertake the social mapping to identify as to which social groups were excluded and what they should advocate for the inclusion of women particularly from dalits, Madhesi and indigenous communities. The LBs and the committee have not been able to ensure that the
163 information on health services reached to the vulnerable groups and their staffs responded to the vulnerable groups quickly.
5.4.3.4 Monitoring, Evaluation and Follow Up
i) District health office (DHO) has skepticism about handing over the sub-health posts to sub-health posts implementation and monitoring committee under the VDCs. No handing over and taking over trainings/orientations was provided to LBs and there were no budgetary provisions and plans for this purpose. ii) The guidelines issued by the MoH did not give a real mandate and incentives to the VDCs to manage, monitor and follow up of sub-health posts. They were just given the task of running the sub-health posts as a sub-ordinate of DHO. iii) There have been no transparent mechanisms to tract the funds flow from the MoH to the local health management committees, and; iv) Monitoring, evaluation and follow up on sectoral devolution has been further hindered due to the existing hierarchical system amongst heads of government LAs as explained in box 5.7 below:
Box 5.7: Hierarchy of Heads of Government LAs Hinders the Sectoral Devolution
A senior official of Morang DDC has mentioned that the handing over of agriculture, education and health sectors to DDC, as provisioned in LSGA, has not taken place because: i) District based government LA officials are not fully aware of these provisions, ii) DDC lacks required knowledge, skills and capacity to undertake these extra functions, iii) At the moment, LDO has been acting act as a Chair of the DDC, as a temporary measure, due to the absence of the elected representatives which is likely to continue until 2008/09 or more, and the reality is that the LDO hasn't been able to function and co-ordinate among these offices as desired due to the same grade (2nd class) of LDO and heads of these LAs. If the level of the LDO was higher than the heads of these LAs, the situation would have been better and effective. However, he emphasized that the best situation to manage and co-ordinate all these functions is to have elected representatives at LBs who can strictly implement such provisions of LSGA but these functions can not be undertaken by LDOs and other government personnel for the long run.
5.5 Roles of Different Stakeholders in Promoting Decentralized Local Governance
5.5.1 Political Parties
Peoples' power, political parties, state structures, empowerment of people and the LBs are interlinked. In view of this, the state structure plays an important role in providing every opportunity to different regions and communities to actively participate in. Over centralization of power and resources in urban centers was due to the political and
164 geographical considerations. The 'urban-centered' political cultures and perceptions of certain privileged sections of our society were against the sentiments and sensitivity of other regions and the communities living in rural parts of the country. The decentralization of power, authority and the administrative division of the country advocated by different government were too inadequate to accommodate the diverse socio-economic and political situation of the country. These urban centered power elites were mainly responsible for creating gaps among the rich, poor and excluded groups9.
From the above, it can be said that almost all the political parties exercise rhetoric in terms of empowering the people and LBs. They were not really committed and serious to devolve power and authority to the people and lower units of government. It was obvious that whoever holds power and authority, they would not be prepared to resign to curtailment of the power and authority they have. It demands an attitudinal transformation in top political leaders and top bureaucrats in whose hands power and authority have been centralized.
Experts on decentralization stressed that Nepal is a country of immense ethnic and linguistic variety and Bahun-Chhetri domination in every aspect of political, economic and social life has de-legitimised the so-called integration of Nepal for many ethnic groups. The military structure alone was and isn't adequate for managing the contradictions of the state that ensued from this situation. Now, the country would be adopting the federalism as its system of governance, it would be a challenging task to decide the basis on which different states or provinces or local units are to be created but it is a challenge that must be taken up by the people.
One very important factor that should be noted here is that the number of peoples' representatives elected in LBs as well as at the higher level was considered as a yardstick of the popularity of the political parties. The qualifications, integrity and impartial behaviors of the elected representatives would ultimately enhance the image of the concerned political parties. Thus, the political parties must encourage their peoples' representatives to become clean and impartial. It was vital that the political parties should have given much more encouragement and emphasis to the local leadership and development so that the poor people and the LBs can be further empowered.
9 Based on personal communication with Prof L R Baral, January 2008.
165 It should also be understood that the elected representatives were basically the vehicles for social change and overall development of the country from the grassroots to the national level. The effectiveness, resourcefulness and development of the LBs and the rural people largely depend on the enthusiasm, sincerity, dedication and decision-making capacity of the locally elected representatives. Justifiable and effective use and mobilization of local means and resources accelerate the pace of empowerment and local development. It calls for selection of the qualified, able and honest persons as candidates for the local elections by the political parties.
The above reveals that like other public institutions, the major political parties were dominated by feudal high caste groups and were highly exclusive. The poor, excluded and marginalized sections of society have no participation and say at all in these parties ranks and files. They are not committed and serious to devolve power and authority to poor, excluded and marginalized groups and lower units of government.
5.5.2 Federations and Associations of Local Bodies
Advocates of federations and association of LBs believe that the LBs have not been able to carry out the devolved functions as effectively as possible because of the limited power and authority given to the LBs at the present set up. Therefore, while devolving the functions to the LBs, the authority of utilization and management of duties, resources (human, financial and material) should be devolved with a clear-cut responsibility and functional machinery for the co-ordination with LBs. In addition to the above, ADDC/N thinks that the following should be done immediately for the effective devolution of the roles and responsibilities: i) Re-structuring of the existing number of LBs. ii) True devolution of powers and authority to the LBs from the central government iii) Give utmost priority to build the capacity (human, finance, material and technical) of the LBs, and; iv) Demarcation of roles and responsibilities of centre, district based government LAs and LBs in order to avoid duplication of the activities
It was clearly visible that these LB institutions and associations have been working for advocacy and lobbying for the devolution of powers and authority to LBs. However, they have not been strong institutionally, financially and technically as yet as they have not
166 been able to work effectively on their own to meet their set objectives. Although, a few donor agencies and INGOs have been supporting them to meet their objectives (financial and technical support from Danida to undertake study other conflicting acts with LSGA, to prepare bye-laws of LSGA to support the efforts of the government and so on), their meaningful participation and involvement in the process from the beginning of planning, implementing, information sharing, dissemination and publication were lacking. Furthermore, when LBs were running by the government employees and cadres from the political parties (excluding the indigenous peoples, Dalits, Madeshis, women and other marginalized groups as they were not included in these parties and government decision- making bodies) hand picked by the power centers in absence of the elected representatives, the norms and spirit of peoples participation and decentralized local governance were severely attacked and no favorable working environment has been created for these local institutions which have been called as foundation of democratic system. These hand picked persons have been responsible to those power centers or persons who picked them up but not to the peoples to whom they should serve. It also promoted corruption and mis-use of whatever funds are available there. This situation proved to be very costly as they couldn't undertake functions like passing the annual budget and programmes, collection of taxes and levies, obtaining loans for the LBs, approval of quotas for the personnel and approval of auctioning etc. Because of all these, the sovereign peoples could not participate in the whole governance process of the country.
There is a lot to do in order to strengthen these LB associations and federations dministratively, technically, economically and politically.
5.5.3 Donor Agencies, INGO and other Development Partners
In most of the donor-supported programmes, social mobilization was an entry point and was found to be an effective tool in organizing local peoples in COs for enhancing participatory planning and improving service delivery at the local level. The elements of participation, accountability and transparency in the affairs of LBs are possible only when the community people are organized and are made aware of various development activities that affect their day-to-day live.
These programmes provided supports for the central government in designing and implementing decentralization plans, reforming legal, fiscal and political systems, enhancing the capacity of the LBs, social service planning and delivery, promoting
167 peoples' participation and gender equality. However in practice, the legislative and regulatory frameworks have failed to provide an enabling environment for LBs to carry out these tasks devolved to them. The main problem has been the overlapping roles and responsibilities between LBs’ new role and the fact that the devolved tasks are still mostly being carried out by the government LAs.
Decentralization and local governance are complex issues involving numerous stakeholders that include the central and LBs, local community, NGOs, CSOs, donors and INGOs and therefore have wide-ranging implications. Both government of Nepal and donors have been emphasized that decentralization is the most appropriate mechanism to address the local development and service delivery. Hence, donors support to decentralization has been directed at policy initiatives, legal reform, social mobilization, equity promotion and LBs capacity building, participatory planning and poverty alleviation. However as the government’s policies and strategies on decentralization are vague and unclear, there lacks effective co-ordination, complementary plans and programmes, dissemination and sharing of information and sustainable programme design for effective donors support in the country (HMGN/Donor Review Policy Document, 2001).
To elaborate more on co-ordination between various donors’ programmes on decentralized local governance, the donors to some extend inform each other on their activities through donors’ forum at the central level. They also organize joint visits to programmes and disseminate findings, progress reports, share experiences and learning. Although, there are some co-ordinations among the UN agencies at the programme level, however, these are inadequate to show the effective co-ordination among the donors in all their programmes including those supporting sectoral institutional arrangements to the government, INGOs and NGOs. It is vital that the donors’ co-ordination should be promoted through an effective decentralized local governance plan. This should enable the donors to identify areas of their strengths, weaknesses and priorities so that they could contribute to the national goals and objectives of decentralized local governance. For this the government ministries, departments and agencies, through which donors invest a massive amount of resources, should facilitate and co-ordinate with the donors to support the decentralized local governance process in the country.
The key aspects for decentralization and the efforts of the donors and INGOs and gaps to these have been identified as follows:
168 5.5.3.1 Government's Decentralization Policy and Strategy Formulation
The government has formulated policy objectives supportive towards decentralization but there is no consistent strategy nor implementation plans for decentralization. There is no clear allocation of the co-ordination responsibility including donor efforts and ownership of the decentralization process where MoLD, MoF, NPC and other line ministries pursue their own agendas and objectives. Donor agencies such as DANIDA, UNDP and SDC have supported the government through resources to prepare decentralization plans and policy framework. They have also supported the decentralization implementation and monitoring committee and also provided support to institutionalize the participatory planning at the local level. Huge amount of resources (both financial and technical) were poured in by donor agencies, in fact there were cut-throat competition among donor agencies to support the country in this respect, to conceive and prepare LSGA and Regulations including printing and dissemination of the same. They provided conceptual and information support for wider devolution of authority to LBs, institutionalizing the participatory planning at local levels, establishing local and municipal development funds, supported to establish the secretariat of decentralization implementation and monitoring committee and local government finance commission.
So far the donor agencies and INGOs have Box 5.8: Who Are Really Benefiting from been providing supports in policy Donors' and INGOs' Resources and development, legal reforms and Supports? institutionalizing of the participatory planning One of the development practitioners from and monitoring system. We have also seen as Kathmandu during the interview expressed dissatisfaction that the dominant groups to how dependent the Nepal government have easy and all time access to donors' became when accepting external support from resources as they are the main gatekeepers donor agencies in support of decentralization. of donor agencies who have connections in It could not afford to even print out the LSGA higher up with required knowledge and skills and distribute them on her own. To undertake to prepare glossy proposals and reports as per the needs of INGOs and donor agencies. a small piece of work of translation or The poor and marginalized groups who publishing some reports, government looks for could not understand inherent systems, support from donor agencies and government requirements and procedures of INGOs and employees, NGO activists and even the people donors who have not been able to even would not even attend a meeting or a come to the nearer to the INGOs and donor agencies for possible funding support. workshop if some allowances are not
169 provided. Views expressed by a development practitioner from Kathmandu about the benefits from donors' resources and supports are given in a box 5.8:
In view of the above, the government could not seek donors support for everything. The government should formulate and prioritize the short, medium and long-term plans in empowering the LBs and local people and then seek donors support. The donor agencies and INGOs should thus lay down criteria and provide support to ensure the meaningful participation of the socially excluded groups in the whole governance process from the grassroots to national level. Also, there are needs to support the local development in a sequential manner for implementation of the government's priority and plans.
5.5.3.2 Resource Base of Local Bodies
Donors and INGOs have been providing financial, technical and human resource support to government through the Local Government Finance Commission for preparing policy on fiscal decentralization, established local and municipal development funds, supported to local government fiscal commission, support to capacity building of LBs associations and federations to make them able to negotiate with the government on LBs financing, to establish LBs financial database, support to improve financial management of LBs and support to MoLD to prepare, analyze and publish their financial data and so on.
It was observed at the local level that the devolved resource base is inadequate to generate the resource needed to perform the devolved functions for the LBs. Still, LBs are heavily dependent to central government grants and LBs share of national development budget is so negligible and most of the funds of the LBs are channeled through the government LAs. There are no mechanisms developed to monitor the efficient use of the grants by LBs provided by the centre. In addition, there was no clear legal provisions as to who, whether the centre or the LBs, has the right to use the natural resources available locally. The personnel both at the central and local levels as well as the former elected representatives of LBs have no knowledge and skills about the fiscal decentralization. So far, fiscal part of LBs, which is one of the most important pre- requisite of local autonomy and sustained local development, have received very less or no attention at all from all stakeholders including donors and INGOs.
Most of the support forthcoming from donor agencies and INGOs was insufficient and very scattered. Donor agencies and INGOs support should be co-ordinated and they should launch their support based on the framework of the fiscal decentralization. For that there is a need to develop a clear policy and strategy on fiscal decentralization. There
170 should also be effective financial supervision of LBs as well as system of monitoring and evaluation of their activities.
5.5.3.3 Autonomy to Local Bodies to Manage the Local Government Services
It has been practiced so far that the personnel to the LBs are being supplied by the central government. LB respondents have elaborated many instances of conflicts between the central government deputed staffers and LBs and in many cases these deputed personnel have been instrumental in compromising the autonomy of LBs as funding and programmes outside LB priorities are run through them according to the ministry level decisions.
This practice has created a separate identity of the LBs and their secretaries, which were against the spirit of the autonomy of the LBs. It created a lack to accountability and loyalty of the staffs deputed to the LBs and similarly it was difficult to implement the policies, plans and programmes for the effective political management when key personnel were hired from somewhere else without due consultation with and knowledge of LBs. Also, these positions had left vacant because of the frequent transfer of them when there were changes in the central government in Kathmandu. So, it was strongly felt that there is a need for a separate LBs' public service Act so that LBs can recruit their own personnel as per the local needs. Donor agencies such as UNDP, DANIDA and SNV have been providing some financial support towards this direction but nothing substantial has had happened so far. The ground reality of policy formulation and its implementation in district is further illustrated in box 5.9 below: Box 5.9: State of Formulation and Implementation of Code of Conduct in DDC for Local Service Delivery A former elected representative of Morang DDC has mentioned during the interview that they have designed their own code of conduct as per the provision made in LSGA to keep a check on their staff so as to improve the local service delivery of DDC. It has accordingly pasted it on a board outside the office for all to see. Some of the key points it highlighted, according to him, were as follows: i) DDC staff should work as per the rules, regulations and laws of the land. ii) staff shouldn't abuse his/her post for personal benefits. iii) staff should not involve in any kinds of non-governmental acts which would shed a bad reputation of government employees and works as well, and; iv) Every staff should immediately report to his/her supervisor if anyone exerts unnecessary pressure to perform any work outside their jurisdiction or any illegal activities.
After the formulation of the above code of conduct, he felt satisfied and had assumed that the performance of all staff of DDC would improve drastically. He however expressed his sadness to note that nobody in DDC had followed and implemented them. All of them have remained only in papers and nothing has happened in practice.
171 Donor agencies and INGOs have been providing support towards this at the local level only and no such support was forthcoming at the central level policy formulation. As all would agree that it was of a paramount importance for the continued decentralization reforms, the donor agencies and INGOs needed to engage themselves effectively and actively with the central government for a full devolution of authority to LBs to manage the local government service in full.
5.5.3.4 Capacity Development of Local Bodies and Other Stakeholders
Many donor agencies and INGOs have been supporting the government in building the capacity of central government, NPC, associations and federations of LBs and LBs as well. UNDP supported the institutional capacity building of NPC on information and data processing while DANIDA supported institutional capacity building of ADDC/N so that they can provide capacity building trainings and orientations to LBs. In addition, GTZ has been providing support to MoLD to initiate institutional capacity development of municipalities in their planning, database management, financial management, community development and other support to MuAN and a Dutch NGO called SNV has been providing financial and technical support for training and orientation programmes for LBs through NGOs and other professional organizations.
The LSGA has also made provisions that the central government should conduct programmes to build the capacity of LBs and the sectoral ministries, departments and district based government LAs should contribute to this initiative. However, due to the absence of overall strategies and plans for the implementation of the overall decentralization schemes, building capacity of LBs have become an empty rhetoric.
Donor agencies and INGOs such as UNDP, DANIDA, DFID, GTZ, SDC, CARE, SNV and many more have been providing technical, financial, advisory, human resources, exposure visits, equipment and training support to the government to build the capacity of LBs. In addition, support to capacity building of NPC, DDCs, Municipalities, ADDC/N, NGOs, civil society and professional organizations to enable LBs to address planning, information and documentation, social exclusion, poverty and social mobilization through LBs have provided by many donor agencies. As building capacity of LBs and other stakeholders is a continuous process and since there was no effective coordinating body within the central government for this purpose, all these efforts haven't been able to yield the desired results.
172 Though the government, in theory, seemed to be positive and supportive for the capacity development of LBs and other stakeholders, it, however, seemed to have no any concrete plans, programmes and funds for this and in absence of these, decentralization reforms and initiatives undertaken so far been wasted and whatever resources have been mobilized become unproductive and unsustainable. To avoid such situation according the field respondents, the government must be sincere and recognize a long-term and a continuous sustainable capacity building initiatives for LBs. On INGOs and donors' part, their supports for the capacity building of LBs and other stakeholder have confined to only local level. For the long-term and sustained initiatives, donor agencies and INGOs should establish effective co-ordination and communication with the central level government authority as well as among the donor agencies working in governance and decentralization sector. There was also a continuous need to support for capacity building of and support to the LBs, its associations and federations for sustained advocacy and campaigning. Views expressed by a trainer on decentralization and local governance from Kathmandu about organizational development and capacity building of LBs are given in a box 5.10 below:
Box 5.10: No Co-ordination and Internalization of all Capacity Building Initiatives Supported by Donors and INGOs
A trainer of Kathmandu based training Academy stated that organizational development and capacity building of LBs are a continuous process for increasing dynamism, effectiveness and competencies of LBs to ensure effective planning and implementation of all development policies, plans and programmes. In this regard, much training on capacity development of LBs management aspects, preparation for sectoral plans, fiscal management, co-ordination and working with NGOs, CBOs and private sectors were conducted with the support from both Nepal government and donor agencies. According to him, the LBs, particularly the DDCs, have not been able to consolidate all the efforts of the central government, donors, NGOs and private sector engaged in organizational development and capacity building of LBs until now. All the financial and technical supports that donors and INGOs provided so far for organizational development and capacity building have been event based and no sustained impact is therefore seen after their support dries up, he said. He adds that there are challenges that LBs have not been able to internalize the supports provided by donors and INGOs on organizational development and capacity building of LBs. They have not been able to co-ordinate with different actors such as central government, district based government LAs, donors, I/NGOs and private sector effectively in participatory planning process as well as in poverty alleviation programmes as envisaged by LSGA. He emphasized that the DDCs have not been able to develop their professional capabilities to undertake their role and responsibilities as per the provisions made in LSGA and its Regulations, he concluded.
5.5.3.5 Transparency and Accountability of Local Bodies
In order to promote fiscal transparency and accountability in the functioning of LBs, many donors and INGOs have been supporting LBs by providing training and relevant information. LSGA has also made provisions to enhance transparency (transparent
173 decision-making process and follow-ups, budget approval procedures, recruitment of personnel, submission of audit reports, declaration of property and assets after the elections and after the end of the office tenure) and accountability when discharging official duties and responsibilities for the LBs. But so far there were no indicators developed to measure the level of transparency and accountability of functioning of LBs when discharging their duties and responsibilities. Also there were no legal provisions in place to be followed up when misappropriation of funds take place. Views of a social activist of Morang district given in box 5.11 also support the situation on the ground.
Box 5.11: Mockery of Transparency and Accountability System
A social activist of Babiyabirta VDC of Morang said that the local people do not know anything about when and how DDC budget is prepared and approved for their development. He once heard about DDC allocating some budgets for women, Dalits and Janajatis and thus went to DDC to enquire about it but could not find any clues as he didn't know anyone there. After a couple of months, he heard that the budget that was originally earmarked for Dalits and Janajatis were withdrawn from DDC and spent by local dominant groups in the name of Dalits and Janajatis making mockery of transparency and accountability system. He further added that everyone talks about transparency and accountability but never implement them in real life. There is no transparency and accountability in every activity such as planning, implementing and monitoring of DDC and VDC and nobody listens to you if you do not have any connections. Moreover, there is no access to LBs financial and other information for the poor and marginalized groups of the society. Every DDC displays 'Citizens Charter' detailing what facilities and services can be obtained from it but again large gap persists between theory and practice, which do not make a DDC as a transparent and accountable body, he concluded.
However, there were no any mechanisms to measure the level of transparency and accountability of the LBs and no legal provision and follow-ups if financial irregularities take place.
Some donor agencies and INGOs such as UNDP, DANIDA, DFID, GTZ, SDC, CARE and SNV are supporting LBs to maintain transparent and accountable functioning through training, planning, communication and information dissemination but these were insufficient and limited to the local level only.
There was a legal provision for transparent and accountable functioning of LBs but the system itself was not fully developed and functional. There is a dire need to sensitize the local community, CSOs, NGOs and media groups to promote the transparency and accountability of LBs. For these to materialize, donors and INGOs in consultation and co-ordination with both the centre and local level stakeholders must work together.
174 5.5.3.6 Participation and Involvement of NGOs and CSOs in Decentralized Local Governance
As stated above, the government policy documents such as 9th and 10th Five Year Plans and LSGA provided a supportive framework and accepted the institutional pluralism and encouraged the participation and involvement of CSOs, NGOs, private sector and other weaker sections of the community in decentralized local governance but it was not clear as to who these weaker sections of the community are. Because of this ambiguity, the same rich and elite groups have been successful to get benefits from all the plans and programmes designed and implemented in the name of the weaker sections of the community. However within the national context, the participation of CSOs, NGOs, media and other weaker sections of the community in local governance is extremely weak. In many cases, these local institutions have become tools and means of local rich and influential people to fulfill their wishes and get much benefit from every programmes of LBs.
Box 5.12: NGOs and CSOs Lack Ability and Willingness to Engage Themselves
One of the prominent civil society activists in Kathamandu during interview categorically said that NGOs and CSOs at the moment are going through the identity crisis. There are varying levels understaning amongst NGOs and CSOs on their identity, roles and scopes. According to him, there is too much emphasis on capacity building at the national level but NGOs and CSOs at the grassroots level get very little attention resulting in their very weak capacity and them being detached from the national scenario.
He further elaborated that CSOs are very weak in strategic areas. They are too focused on service delivery to respond to address the immediate needs and do not have the ability and willingness to work on strategic issues such as CSOs and citizentry, governance and social inclusion and so on.
Many donor agencies and INGOs have been working with LBs, NGOs, CBOs and civil society groups to improve local governance, human rights and to strengthen local and parliamentary democracy. They have been supporting programmes like social mobilization and group approach for promoting the participation and empowerment of CSOs, NGOs and private sector for decentralized local governance but again in real terms the poor and excluded groups have not been able to benefit from these initiatives. Also the experiences and lessons learnt from these donor agencies and INGOs supported programmes have not disseminated effectively to influence the policy makers and top bureaucrats at the centre.
In government policy documents such as 9th and 10th five year plans and LSGA, there were provisions for participation of NGOs, CSOs and CBOs in local governance and decision making process but they were rarely implemented. The local people and LBs
175 were insufficiently sensitized on involving the NGOs, CSOs and CBOs and their importance to decentralized local governance and local development. There was a dire need to develop an inclusive mechanism to promote the meaningful participation of NGOs, CSOs and CBOs in LBs decision making and service delivery. There was also a need for more sensitization of the common peoples, local political leaders, activists, central government bureaucracy, district based government LAs and LBs towards the important roles of NGOs, CSOs, and CBOs in decentralized local governance.
5.5.3.7 Co-ordination and Communication of Donors Support for Decentralization and Local Governance
The support of donor agencies and INGOs programmes attempted to build and consolidate the experiences and knowledge gained in recent years by the Nepal government in the field of strengthening decentralized local governance.
Donor agencies and INGOs supporting decentralization and governance have established a loose network of donor co-ordination where information was shared and co-ordinated through review and sharing meetings, reports and publications. They have also mentioned that they co-ordinate bilaterally with the respective government agencies as per their memorandum of understandings. Despite of many years donors support in the country for promoting decentralized local governance, however, meaningful participation of the poor and excluded groups in these processes was still lacking.
However, a direct dissemination of the results of INGOs and donors' initiatives on decentralization and governance to the concerned LBs by them has been extremely rare. Active participation and involvement of concerned LBs, people concerned and LB associations in the process of information sharing, dissemination and publication should improve the information sharing and dissemination and also enhance the roles and responsible of LBs and their associations and federations.
It was discouraging to note that the government lacks clear guidelines on donors’ co- ordination based on national policy, strategy and time bound implementation plan on decentralized local governance. The government has been unable to co-ordinate, monitor and embrace these programme activities bringing all the stakeholders together to achieve the common goal of decentralized reform. As a result, it has led to a thin spread of donors and INGOs support and resources in several areas on one hand while government has become unable to specify support focus areas and also facilitate donors and INGOs with the ideas and programmes for optimum results of their investments on the other. Because
176 of this, there were many instances of duplication, overlapping and ‘doing same thing by different actors and reaching nowhere situation’ for decentralized governance programmes being supported by donor agencies and INGOs.
More over, the government even did not have any records as to indicate how many donor agencies and INGOs have been working in this sector. Since there was no specific central government institution to look after the decentralization and governance sector, there was clear mis-match between donors' objectives and programmes with government’s policies and strategies on decentralized local governance. Because of these confusions, all government institutions tended to accept donors' support, which complicated the situation further resulting for extremely weak donor co-ordination for decentralized local governance. The MoLD has also failed to act as a focal ministry to co-ordinate the donors and INGOs support and initiatives.
The overall conclusion has been that the appropriate co-ordination and communication among donors, INGOs and government was very much lacking. The major problem for effective donor co-ordination and communication was in the absence of a clear and sequenced decentralization plans and it's implementing strategies from the government.
Many years’ donors' involvement showed that there was a lack of strategic framework for donor support that has resulted in significant waste of resources and no concrete achievements are thus seen. It was also due to the lack of effective communication and co-ordination channels on both sides, extremely weak performance of the central government due to its centralized structures and bureaucratic system as well as undue pressures and conditionalities imposed by the donor agencies and INGOs. Because of all these, it has become easier to point out fingers to each other or engage in blame game when the government has no overall national framework to guide and converge all the donors and INGOs support for decentralized local governance.
Until recently, any donor/INGO supports for decentralization and local governance in Nepal was highly problematic because of the pervasive conflict and unfavorable political climate. Although, the future of LBs is uncertain it is questionable that the LBs will play a vital role in the immediate recovery efforts and in the long-term provision of basic services to the grassroots peoples. The main challenges that the government has to face will be ensuring transparency, accountability and participation in service delivery and at the same time to create the foundations for good local governance. Increased donor/INGO harmonization and alignment with government priorities will be another challenge that the decentralized local governance will seek to address.
177
5.6 Challenges to implement the LSGA
The main objective of decentralized local governance should be in providing maximum opportunities for the rural poor peoples, local institutions, NGOs and CSOs to involve themselves in affairs of local governance and sharing the benefits come along therein. So far many initiatives, both in rhetoric as well as in real sense, had initiated towards this direction. The most notable amongst them are the LSGA and its regulations that have arguably put into place with powers and increased autonomy to the locally elected bodies by way of devising institutional, legislative and regulatory frameworks. This Act has been implemented since 1999 and here an attempt is made to assess the views and perceptions of local people, LBs officials and representatives, government LAs, social workers, village/district/central level political leaders/activists, NGOs and CSOs of both VDCs and districts, views of LB associations and federations, local governance experts and central government bureaucrats about the contribution made by the different Laws, Acts including the LSGA to empower LBs and undertaking local development initiatives which were as follows:
Table 5.1: Views and Perceptions of the Respondents from Kavre and Morang Districts on Contribution made by LSGA to empower LBs
Views of respondents on contribution Total made by LSGA to empower LBs S No Types of respondents number of Very Very Have no respondents good Good Poor poor idea 1 Local Peoples 69 - 6 21 27 15 2 LB Officials and Representatives 26 - 2 10 14 - 3 Officials of Government LAs 23 - 2 8 13 - 4 Political Leaders/ Activists and 40 - 4 11 20 5 Social Workers 5 Members of NGOs and CSOs 36 - 1 15 18 2 6 Members of LB Associations and 12 - 1 3 8 - Federations 7 Local Governance Experts and 56 - 2 24 30 - Central Government Bureaucrats Total 262 - 18 92 130 22 Source: Field works of Kavre and Morang districts, September - December 2007 and meetings and discussions with central level political and civil society leaders, INGOs, donor agencies and government bureaucrats, October 2007 – February 2008
Table 5.1 reveals that 50% (130 respondents) expressed that the contribution made by the different Laws, Acts including the LSGA to empower LBs and undertaking local development initiatives is very poor and 35% (90 respondents) said it is poor. Moreover,
178 6% (18 respondents) said that the different laws, rules including the LSGA were good to empower LBs whereas 9% (22 respondents) did not know anything about these.
According to the respondents, the major Box 5.13: LSGA - A Failed Initiative to reasons given to justify their responses Promote Social Justice A Kavre district based political leader of CPN were as follows: (UML) expressed that the LSGA has not made i) The whole Nepali state apparatus any positive mark in promoting social justice. have been exclusionary and in such He said that promulgating new laws and acts would not have any meaning if they are not a situation, promulgation and seriously implemented and same thing enactment of laws and acts happened with the LSGA. He opined that more needs to be done to promote the inclusion of wouldn't add any value to empower Women, Dalits, Janajatis and Madhesis from the poor and marginalized section local to national level political representation. The present ground reality is that the rural of society. A case in box 5.13 people are facing difficulties even to get a small given also supports the situation. work done as the VDC secretaries are unable ii) There have been persistent to work in VDCs.
tendency of the political party leaders and government bureaucracy not to treat the LBs as autonomous bodies for the local development. They have never shown the commitments and willingness to devolve real power and authorities to them. iii) All the laws, rules, regulations and Acts had been promulgated, enacted and imposed from the top often
with the support or initiatives Box 5.14: LSGA - Waste of Scarced Resources from the external agencies A Kathmandu based civil society activist known as without the knowledge of and strong Critics of LSGA say that despite of a high consultation with the claim of LSGA being a ground breaking Act to grassroots community and the empower the LBs and the grassroots community, basically it has done nothing for the LBs and the LSGA was no exception. grassroots peoples as it was not born out of Nepali Because of this, the majority soil. It was rather conceived and promulgated with huge financial and technical supports from many of the people failed to own donor agencies. Millions of dollars were spent in them. Had all the laws or acts Kathmandu's expensive star hotels to organize many workshops and seminars in presence of born out of Nepali ideas or those groups who have every links with influential initiatives, these would have individuals and institutions and poor and excluded been able to leave positive peoples from the grassroots were involved any process during its formulation, discussions and impacts to empower the LBs implementations. That was why, the LSGA could for undertaking local not become a common Act or document of the entire Nepalese peoples. development initiatives.
179 Views of critics of LSGA also support this reality given in box 5.14. iv) The political party leaders and government bureaucracy at the centre should have followed the democratized power structure as well and they should not have the tendency of supersede the LBs by issuing directives and guidelines that supersede the laws or acts enacted. v) Another problem that the respondents cited was that there was a general feeling among the people, political party leaders and central level bureaucrats that empowering and facilitating the LBs for undertaking the local development activities were the sole responsibilities of the MoLD. Because of this mis- perception, other ministries and departments of the government have not accepted the LSGA as their act towards implementing and achieving the decentralization schemes in the country.
Box 5.15: Too Much Political Interference Hindered Local Development
A central level political leader of NC was of the opinion that promulgation and implementation of LSGA has in general improved the awareness level of the people but he feels that the LB representatives have not been able to capitalize the opportunity given by this in favor of the peoples' development. He thinks that there have been too much political interference for the development of VDCs, Municipalities and Districts and the elected representatives were not honest and sincere to work for their development as wished by the peoples who had elected them. vi) The political party leaders and central level bureaucrats did not have confidence, faith or trust on LBs that they would undertake the given roles and responsibilities efficiently. All of them have failed to capitalize the space provided by LSGA, which is further elaborated in box 5.15 above. vii) At the local level, there was no trust among government LAs, LBs, NGOs, CBOs and CSOs to work together in implementing different local development activities. viii) There were lack of clarity in rights, duties and responsibilities of LBs, government LAs and central government. ix) There were no co-ordination and co-operation among NGOs, CSOs, LBs, government LAs and central government for undertaking the tasks of local development. There was also duplication of duties and responsibilities, tendency of changing the local priorities including programmes and the budget from the centre, weak institutional structures, capacity and inadequate resource base of LBs. Even the donor communities who have been supporting the country for many years have expressed dissatisfaction over the weak commitment of the government to the decentralized local governance.
180 x) There was a lack of accountability system at both horizontal and vertical level, and; xi) Monitoring, evaluation and co-ordination mechanisms at all levels remained extremely weak.
Furthermore, the powers and authorities given by LSGA to the LBs were also in conflict with over 52 other sectoral Laws and Acts promulgated earlier by the government. One case in example was that the forest act (1992) challenged DDC's taxation in forest products and resources. There were many such examples brought to public by LB associations and federations. Out of these, 23 sectoral Acts listed below should be amended as soon as possible if government is serious to decentralize the powers and authority to the LBs, which are as follows: Table 5.2: List of Other Sectoral Acts in Conflict with LSGA S No Sectoral Acts Related Articles 1 Animal Health and Services Act, 2055 (1998) 4,16,17 and 19 2 Animal Slaughter house and Meat quality Examination Act, 2055 5 and 18 (1998) 3 Birth, Death and other Personal Events Registration Act, 2026 2, 3 and 5 (1969) 4 Consumers Protection Act, 2054 (1997) 15 5 Construction Enterprise Act, 2055 (1998) 4 and 5 6 Cinema (Production, Show and Distribution) Act, 2026 (1969) 4 7 Education Act, 2028 (1971) 3, 11 and 12 8 Electricity Act, 2049 (1992) 3 and 12 9 Environment Conservation Act, 2053 (1996) 7 10 Forest Act, 2049 (1992) 2, 17, 23 and 48 11 Judicial Administration Act, 2048 (1991) 7 12 Local Administration Act, 2028 (1971) 5, 9 and 10 Ka 13 Local Governments (election procedures) Act, 2048 (1991) 16 14 Land Revenue Act, 2034 (1977) 32 15 Mines and Minerals Act, 2042 (1985) 5 16 Natural Calamity Act, 2039 (1982) 7 17 Public Roads Act, 2031 (1974) 21 18 Statistics Act, 2015 (1958) 7 19 Soil and Watershed Conservation Act, 2039 (1982) 4 and 6 20 Sports Development Act, 2048 (1991) 12 21 Vehicles and Transport Management Act, 2049 (1992) 78 and 121 22 Water Resource Act, 2049 (1992) 4 23 Solid Waste Management and Resource Mobilization Act, 2044 To be annulled (1987) fully. Source: Review of Decentralization in Nepal (2000), Poverty Reduction and Decentralization: A Linkage Assessment Report (2002) and Sectoral Devolution Strategy (2005)
After several efforts and investment of huge resources of all sorts as stated above on decentralized local governance, it was still not clear as to which government departments
181 or line agencies or LBs to provide what public services to the common people. Still there were overlapping of jurisdictions of central ministries, departments, government LAs and LBs as their respective responsibilities and accountabilities were not clearly been spelled out. The common citizens have not been able to get the services as mentioned in the LSGA. There was no doubt that whatever little the LSGA intended to achieve by providing power and authority to LBs legally, all these have remained only within the pages of the LSGA as rhetoric.
182 CHAPTER SIX
FINDINGS ON DECENTRALIZATION AND LOCAL GOVERNANCE
After reviewing the gaps and inconsistencies of different policies, legal, institutional, fiscal and operational frameworks formulated and implemented by many governments for decentralization and local governance, this chapter argues whether the decentralized local governance in Nepal has been rhetoric or not. This chapter further explores the views and perceptions of the local peoples, particularly in the context of formulation and implementation of LSGA in devolving roles and responsibilities with transfer of funds and authority from the central government to LBs, NGOs, CBOs and CSOs to implement and achieve the core objectives of the decentralization.
6.1 Institutional Framework: Peoples' Participation in Central Level Institutions
Meaningful peoples’ participation is essential for every political institution. If a political institution, irrespective of its type, is to function for the society and people, people must take part in it in order to make policies and implement them. Naturally, the idea of peoples’ participation in politics assumes greater importance in a democratic system which demands it. Participation is the principal means by which consent is given or withdrawn in a democracy and rulers are made accountable to the ruled. Political theorists projected political participation as one of the necessary pre-conditions for the success of such democratic systems. A willingness on behalf of the citizens to participate fully in the governance of their own lives is central to a thriving democratic society.
State power is not simply the power exercised by the ruling class, it is governed by ideas and different state institutions. Governance and peoples' participation are the processes of exercising different forms of power and authority within various institutional arenas of the state. It is crucial because they encompass both the process and arenas where public policy is formulated, legitimized, legislated, implemented and monitored. Just and democratic governance helps in balancing the power among the different players at all levels from grassroots to national and international. Just and democratic governance is characterised mainly through participatory decision making, transparency, accountability and rule of law.
183 Lack of participatory decision making system excludes the beneficiaries from taking decision in their affairs including in development which results into domination of few powerful groups and marginalization of common people undermining their right to self- determination and right to development. The decisions made by handful rich and powerful elite people serve mostly the interest of well-off people, so such decisions are not made transparently. This further excludes the people from their right to information and further marginalizes the people from the power of information and participation. Though ignorance of law is no excuse, poor and illiterate people are hugely ignorant of laws, policies and practices that guarantee their limited rights.
When the governance is ineffective, justice is always jeopardized either by making laws with flaws or by non execution of laws. This gives birth to unaccountable and irresponsible governance that promotes corruption, impunity and insecurity. This again mars the capability of poor and marginalised people in acceding justice. When the governance is not accountable, the basic needs and rights of people are not fulfilled; equitable and just distribution system collapses and people are deprived from their basic needs and rights. This, in one hand, creates poverty and on the other perpetuates it.
In theory, people's participation and governance have been long recognized as important elements of social change and development. The thrust of the problem for good governance and meaningful people's participation in overall national development lies in the faulty centralized state structure that begun after the geographical unification of different states into present Nepal by Prithvi Narayan Shah some 240 years ago. Nepal's multi-ethnic, multi-lingual, multi-cultural and multi-religious characters never matched with its Constitutional structures of different times. Even the Constitution promulgated after 1990's movement failed to recognize and accept these factors in practical terms. There are more than one hundred different ethnic/caste groups who speak more than ninety-two different languages. Therefore, Nepal is a country of many caste and ethnic groups as none of a single ethnic and caste groups command the numeric majority. However, the higher caste hills Hindus (Brahmins, Chhetris and Thakuris) dominate the rest of the caste and ethnic groups economically, socially, politically and culturally even though they make up only about 30% of the country's total population. The recent data shows that the high caste Hindus occupy more than 80 percent of the prominent positions in politics and bureaucracy with a limited representation from ethnic groups which form a sizeable chunk (more than 37.7 % as per 2001 census) of the total population. The Dalits with about 12 % (2001 census) of the country’s total population have no representation at
184 all in the echelons of power and privileges. Although, in general, some of the indigenous nationalities fare better off than the Dalits in most of the indicators of well being including participation, they lag far behind the Brahmins, Chhetris, Thakuris and Newar groups in terms of most of these indicators of well being. Women comprise less than 8% of the civil service. They are further disadvantaged by laws and traditional social norms that reduce their access to education, assets and job opportunities (CBS, 2001 and NLSS 2003/04).
As stated earlier, Nepal is a multi-ethnic society with a complex caste structure sustained by age-old traditions and the influences from the former Civil Code (Muluki Ain) that forms a basis for such traditions. It is a country with considerable socio-economic stratification reinforced by a hierarchical socio-cultural based on caste, age and gender. The entire state mechanism and governance system so far have been unfair towards the poor and disadvantaged section of the population.
Hence, this study has focused on issues related to the participation of the poor and disadvantaged section of our society in different state mechanisms at the centre (macro) level. In order to provide a glimpse of the participation of many socio-cultural groups at the macro level, the following data on integrated national caste and ethnic index of governance is presented below:
185 Table 6.1: Integrated National Castes and Ethnic Index of Governance
S No Organizations/ Brahmin/ Newar Non-Newar Madhesi Dalit Total Year of Institutions Chhetri Ethnic Groups Reference 1 Judiciaryx 212 (78.81) 30 (11.15) 6 (2.23) 21 (7.8) 0 269 (100)xi 2001 2 Legislature (lower and upper houses) 159 (60.00) 20 (7.54) 36 (13.58) 46 (17.35) 4 (1.50)xii 265 (100) 1999 3 Interim Parliament 166 (50.45) 16 (4.86) 49 (14.89) 73 (22.18) 25 (7.59) 329 (100) 2006 4 Council of Ministers 11 (55.00) 1 (5.00) 4 (20.00) 3 (15.00) 1 (5.00) 20 (100) 2006 5 Constitutional Bodies 14 (56.00) 6 (24.00) 2 (8.00) 3 (12.00) 0 25 (100) 1999 6 Public Administration and Bureaucracyxiii 5,802 (72.39) 1,152 (13.40) 264 (3.36) 805 (9.94) 74 (0.91) 8,096 (100) 2006 7 Leadership of Political Partiesxiv 128 (66.66) 16 (8.34) 26 (13.54) 18 (9.38) 4 (2.08) 192 (100) 2006 8 DDC Presidents 51 (68.00) 0 11 (14.66) 10 (13.33) 3 (4.00) 75 (100) 1999 9 Mayors and Deputy Mayors of Municipalities 57 (49.13) 0 10 (8.62) 24 (20.68) 25 (21.55) 116 (100) 1999 10 Academic and Administrative Heads in TU 112 (54.0) 70 (33.6) 2 (0.96) 24 (11.5) 0 208 (100) 1998 11 Leadership Positions in Professional 36 (58.06) 18 (29.03) 2 (3.22) 6 (9.67) 0 62 (100) 1999 Associations and Scientific Organizations 12 Leadership in Civil Society Organizationsxv 210 (57.85) 117 (32.23) 19 (5.23) 16 (4.40) 1 (0.27) 363 (100) 1999 13 Leadership positions in Royal Nepal Academy 85 (75.22) 22 (19.46) 6 (5.30) 0 0 113 (100) 1998 and Cultural Organizations 14 Leadership positions in different Councils 37 (57.81) 16 (25.0) 5 (7.81) 5 (7.81) 1 (1.57) 64 (100) 1999 15 Leadership positions in Industrial and 26 (27.65) 41 (43.61) 1 (1.09) 26 (27.65) xvii 0 94 (100) 2006 Commercial Organizationsxvi Sources: Integrated National Index of Governance (1999), NIMD, 1999 in Neupane, 2000, Janauthan Magazine (November, 2000), Nyaya Parisad Bulletin (December 2001), adapted from IIDS Report (2002), NLSS (II) 2003/04, Lawoti (2005), Interim Constitution (2006), Ministry of General Administration (2006), details received from the political parties, details from FNCCI and NCC and other relevant sources/reports (2006) and A Three-Year Interim Plan of NPC (2007).
x Includes Supreme, Appellate and District Courts xi Figures in parentheses are percentages. xii Includes only nominated members of the Upper House xiii Includes only Special, First, Second and Third Class categories. xiv Includes Central Working Committee members of NC, NC (Democratic), CPN (UML), CPN (Maoist) and RPP only xv Neupane, 2000 (Based on analysis of ethnicity of persons in the forefront of listed civil society organizations in NIMD, 1999). xvi Only representatives from FNCCI and NCC included here. xvii Also includes Marwadees and other Indian origin groups
186 Table 6.1 reveals that Nepal has become a country of unequal society where some people or the community have prospered extremely well while many others have suffered from socio-economic, cultural and political deprivations. The exclusion of the poor and marginalized sections of Nepalese society in socio-economic and political spheres has been the main causes of unequal society.
Therefore, the above national integrated index of governance shows that the Brahmin/Chhetri and Newar groups have extremely high participation in each and every state and non-state institutions such as Judiciary, Legislature (both lower and upper houses), Interim Parliament, Council of Ministers, Constitutional Bodies, Public Administration, Leadership in Political Parties, DDC Chairpersons, Mayors and Deputy Mayors of Municipalities, Leadership in different Councils, Leadership Positions in Professional Associations and Scientific Organizations, Leadership in Civil Society, Academic and Cultural Organizations relative to their population size. They have been making Constitutions, laws, rules, regulations including development plans and programmes, they interpret and implement them and get the entire benefits from these ignoring the poor and socially excluded groups. It also shows that it was not only Dalits who face the socio-economic, cultural and political exclusions, the women, Madhesis and the indigenous nationalities except Newars have also not fared well in overall participation in state institutions.
In view of the above, an attempt has made here to analyse the participation of different socio-cultural groups in state institutions which were as follows:
6.1.1 Political Parties and Peoples' Participation
Political participation as a concept has gained a key place in contemporary political science in general and political sociology in particular. People and society as whole perform the act of participation in different ways. Political parties are the main change agents and peoples’ participation is the central for every political system. If a political system, irrespective of its type or ideology, is to function and sustain, peoples must take part in it actively. Political participation is thus viewed as one of the major components of the social and political stability.
Nepal saw a mushrooming of the political parties of all sorts which were organized around different ideologies after the peoples' movement of 1990 and emergence of the multi-party parliamentary system thereafter. Their programmes or identities range from conservative radical right to extreme left.
187 Almost all of these political parties are highly dominant by the high male caste groups. The NC party, for instance, calls itself a biggest democratic socialist party. Since the beginning of 1950s, the indigenous peoples, Dalits and Madhesis had lost the most number of lives to bring the NC to power but it delivered nothing to them except their further marginalization and deprivation. Whereas only two Koiralas had won the election during their electoral victory in 1959 parliamentary elections, the central committee of the NC constituted soon after the elections had four Koiralas from the same family. Thus, an intra-party monarchy was already in the making within the NC by 1960s. Furthermore, if we analyse the names of the martyrs in the political movement of 1990, it shows that 45% were from hill indigenous groups and Dalits, 22% from Madhesis and 33% from hill Brahman and Chhetri but the subsequent parliaments, governments and the entire bureaucracy after the 1990 were totally dominated by hill Brahmans and Chhetries. The participation of poor and excluded peoples in these political parties has been very negligible due to the exclusionary and centralized mentality of the top leaders of these parties.
It is evident that the political parties are the key players in democracy. However, the democratic system has been extremely exclusionary as meaningful participation is limited to those peoples belonging to a certain race, sex, language, caste, region, religion and class. In view of this, the participation/representation of different socio-cultural groups in the central working committees, very powerful bodies of the major political parties where important decisions are made were examined. As presented in the above table, out of the total 192 central working committee members, 144 (75%) persons were from the male Brahmin, Chhetri and Newar groups, wherease non-Newar indigenous peoples, Madhesis and Dalits have only 26 (13.54%) persons, 18 (9.38%) persons and 4 (2.08%) persons respectively.
The issue of social and political exclusion in Nepal is extremely serious. Let us now analyse the composition of the political parties, key actors in democracy, and their processes of formation as this was an indicator of political participation across different caste/ethnic groups. Nepali politics has largely been characterized by dynasty, a personality cult and kinship network (Baral, Hachhethu et al, 2001). The social composition of political parties indicates that they were mostly centralized, largely exclusive and captured by high caste male groups who have traditionally been powerful in the country. The entrenched domination of the high caste male groups in political parties, legislative, judiciary and executive over a long period of time was made possible by their control over the party leadership, supplemented by the state laws and policies
188 that systematically fostered disparity in wealth, education and social status. High caste male composition and domination in all the political parties were paradox for them. They also falsely claimed to represent the poor and socially excluded peoples of the country as a whole. The presence of ethnic groups, women, dalits and representatives from Karnali region in the leadership hierarchy in major political parties was highly negligible.
Although most of them have party affiliated ethnic groups, women and dalit organizations, they could not in any way influence the party policy and leadership structures. The potential leaders from the poor and socially excluded groups too remained loyalists rather than asserting their roles. As a result, these groups have remained exclucive from both party politics and national political mainstream. Many people believed that without changing the composition and domination of the party rank and file, a true democratic participation and representation of the poor and socially excluded peoples in every state institutions were next to impossible. The political parties should also be reinvigorated and revolutionized to ensure that the voices of the poor and socially excluded groups are heard.
Thus, the above data shows that there was a poor representation of marginalized groups in central working Committees of the major political parties in the country. Some of these groups represented in central working committees were not the decision-makers but were only the assistants and bag carriers of the leaders. They were bound to act in accordance to the orders of the party Presidents, General-Secretaries and other central committee members highly dominated by high caste groups.
After 1990, three general elections have taken place for the lower house of the parliament. In all of these elections, the male members from high caste groups continued to occupy more that 60% of the positions as legislators, while the indigenous nationalities accounted for less than 15% of the MPs in 1999. Dalits were virtually non-existent in legislature, judiciary and executive bodies and the situation of Madhesis and women too was not encouraging. The pattern of election results found the same situation in LBs as well. All these have shown that there was a link between Nepal's history of feudal and caste-based hierarchy and the failure of the political parties to reform themselves and become genuinely responsive to the electorate. Also the replication of the dominance of the traditional caste in political spheres and the lack of opportunity for the emergence of new leadership within the political parties has undermined their legitimacy as a democratic alternative to the past autocratic power structures.
189 6.1.2 Legislature: Supreme Policymaking Body
In the country's supreme policymaking body, ie Parliament, the representation of poor and marginalized groups has never been in proportion to their population. In Nepal's first parliament in 1959, the representation of non-Newar ethnic groups was only 19.3% of the total number of parliamentarians (109). Thereafter, in the Rastriya Panchayat, the supreme legislative body of the Panchayat system, introduced after dissolving the parliamentary system, the representation of ethnic groups ranged from 16.8% to a maximum of 32.1% (in 1981) of the total number of legislators. After the restoration of multiparty dispensation, three parliamentary elections have been conducted: in 1991, 1994 and 1999. In these three elections, the representation of ethnic groups to the total number of members of the HoR (Lower House) was 30.2% (in 1991), 24.9% (in 1994) and 23.9% (in 1999). If Newars were excluded, this percentage would come down to 23.4, 18.5 and 17.1 respectively. There has been a decline in the representation of non-Newar ethnic groups instead of improvement. The approximately 13% hill Brahmins have about three times (on average 39%) more representation whereas the approximately 18% Chhettri and Thakuri have about 20 per cent parliamentarians. The rest of the MPs were upper and middle classes from Tarai and the approximately 15% Dalits of the country have no representation till now.
The Lower House of Parliament, country's supreme policymaking body, where the representation of different social groups had never been in proportion to their respective population size. In Nepal's first parliament in 1959, the representation of the indigenous peoples (other than Newar) was only 20 out of the total 109 parliamentarians.
Thereafter, in Rastriya Panchayat, the supreme legislative body of the partyless Panchayat era, introduced after dissolving the parliamentary system, the representation of indigenous peoples ranged from 16.8 % to a maximum of 32.1 % (in 1981) of the total number of legislators.
After the restoration of multi-party democracy in 1990, three parliamentary elections had taken place in 1991, 1994 and 1999. In these elections, the representation of indigenous peoples (excluding Newar) to the total number of members of the Lower House of Parliament was 23.4 %, 18.5 % and 17.1% in 1991, 1994 and 1999 respectively and interestingly there has been a decline in the representation of non-Newar indigenous peoples instead of further improvement. For Dalits who make up about 12% of the population, won only one seat in 1991 parliamentary election of three post-1990 elections and only a few women were successful to be elected to the parliament.
190 The same decreasing trend of indigenous peoples, Dalits, Madhesis, Muslims and women representation was seen even in the National Assembly (Upper House). In 1999, there were 19 (28.3%) parliamentarians belonging to indigenous peoples in a 60-member of the National Assembly, which decreased to 13 (21.7%) in 2001. Because of the decreasing trend of indigenous peoples' representation in both the houses, the hold of the male high caste groups, which has traditionally been dominating the every state mechanism, has further consolidated and the indigenous peoples, Dalits and other marginalized communities are being further sidelined.
6.1.3 Judicial System
The Courts of the country are very important institutions in making judicial decisions and interpretation of the Constitution of the country. However, the conservative nature and status-quo orientation of the Courts have not been friendly to extend the basic rights to the poor and other marginalized groups of the country.
In accordance with the Article 85 of Nepal's Constitution, the basis structure of Nepal's judicial system consists of the Supreme, Appellate and District courts. In addition, there are other courts and tribunals such as special courts, administrative courts, labour courts, special police courts, military courts and others with their own specific jurisdictions. The chief justice of the Supreme Court is appointed on the recommendation of the Constitutional Council and the appointment of other judges is based on the recommendations of the judicial council. Until the 1960s, Nepalese legal system was explicitly based on the Hindu ideology. The Manu Smriti was closely followed as the guiding principles for such a legal system. The Muluki Ain, a civil code of 1854, had classified the diverse population of the country into a caste hierarchy and used this classification of people for distributing privileges and power and as a framework of social stratification and mobility. The declaration of Nepal as a 'Hindu Kingdom' in the Constitution symbolized the relics of its feudalistic past.
Like in other state institutions, the judges of courts (Supreme, Appellate and District) too were highly dominated by male members of the high caste groups with almost 90% from Brahmin, Chhetri and Newar communities. There were only 7.8% and 2.23% from the Madhesi and ethnic groups (excluding Newar) respectively. Because of this very negligible presence of the ethnic communities in judiciary, the verdicts given by the high caste group judges have not been fair. One such case of biased verdict can be cited when the demands put forward by the indigenous communities to recognize their native languages (Newari and Maithali in Kathmandu municipality, Ragbiraj municipality and
191 Dhanusa DDC) as official languages in addition to the Nepali languages in accordance with the provision of the LSGA were quashed away by the Supreme Court verdict on 4th June 1999 which proved that the LSGA has ridiculed the entire indigenous communities in the country emphasizing that Nepali is the only official language of Nepal as provisioned in the Constitution and therefore denied the use of mother tongues in government offices including the LBs.
The second decision made by the Supreme Court is related to the implementation of a reservation policy of Tribhuvan University only after promulgating the relevant laws ignoring the fact that the TU is an autonomous body established by enacting laws and it has rights to make its own rules and regulations. The ethnic groups of the country thus believe that as long as there is no political decision of equal language policy and the right to use mother tongues as additional languages in LBs and other government agencies, implementation of reservation policy or affirmative action in education and employment, it was not possible that the ethnic and other marginalized groups can not represent in judiciary in a meaningful manner.
The miserable condition of the ethnic groups in judiciary as shown above was against the principle of social justice. It was mainly because the languages and the legal system of these groups have not been recognized by the state. This extremely lower number of judges from the indigenous peoples' could be mainly due to the discrimination of indigenous peoples to enter into the judiciary, low number of law graduates from this community and unwillingness to join the judiciary services for various reasons. There was no presentation at all to the judiciary from the Dalit community.
6.1.4 Interim Parliament
An interim parliament was formed after the peoples' movement II in 2006/07. The total number of this interim parliament members was 329 {NC: 130, UML: 83 CPN (Maoist): 84 and others: 32}. Out of this, more than 55% of these members were from the Brahmin, Chhetri and Newar communities whereas Madhesis, indigenous peoples (except Newar) and Dalits have only 22.18%, 14.89% and 7.59% representation in this interim parliament respectively. It shows that the situation of representation of the deprived and marginalized communities in the interim parliament even formed after peoples' movement – II have failed to make it to include the peoples from all walks of life where very important decisions are being made to build the New Nepal. The Madhesis, indigenous peoples (except Newar) and Dalits were under-represented in the interim parliament.
192 6.1.5 Council of Ministers
Although, parliament is the highest policy-making body, it is in fact the council of ministers who take the lead in making public policies. The role of the parliament is in most of the cases to approve or reject the government policy initiatives.
The above index shows that in 2006, the total numbers of ministers were 20 out of which, Bhramin/Chettri occupied 55%, non-Newar indigenous peoples had a share of 20%, Madhesi had 15%, Newar and Dalit had 5% each. Also, very few women were represented in the council of ministries. The exclusion of the majority of the poor population from policy making and implementation was a major concern for the good governance.
6.1.6 Constitutional Bodies
Despite of many Constitutional provisions, a large chunk of the poor population suffer from many discriminations. It was also reflected in their extremely low level of participation in Constitutional bodies. Different ethnic, religious, linguistic, women and Dalit groups have been accusing the dominant group of oppressing these marginalized groups. The existing state structure, including the Constitutional bodies, was built in such a way to exploit and discriminate these poor and marginalized sections of our society. As per the data in the above table, Brahmin, Chettri, Thakuri and Newar occupy 80% of the positions of Nepal's Constitutional bodies. There were very low representation of ethnic groups (excluding Newar) and Madhesi groups in this and there was zero representation of Dalit community to these bodies.
6.1.7 Public Administration and Bureaucracy
Influence of public administration and bureaucracy in every country of the modern world, no matter whether a country adopts liberal, authoritarian or socialist mode of governance, is on the raise. It is because of the strategic position of the public administration and bureaucracy in the policy process and the special status enjoyed by them. As per the perspective of the structural-functional model, the modern political system is characterized by structural differentiation and functional specialization. Bureaucracy intervene state’s policy formulation, adjustment, their interpretation and implementation in such a way that it influences their intents and purposes.
193 The roles of bureaucracy are also extended beyond the government ministries, departments and other institutions and it is also associated with the input functions of interest articulation. Thus, bureaucracy is one of the most important sites of the state and political power. It is one of the most important state machineries in governing the country. All government strategies, policies, plans and programmes are implemented by the bureaucracy by undertaking the day-to-day functions of the state. They have direct bearings with the activities of daily concerns of the public spheres and thus peoples' access to them is extremely vital. Working for the government as civil servants is not only for the economic reasons but it is also a matter of high social prestige and recognition that comes to it. Upon analyzing the situation of the peoples' representation in public administration and bureaucracy, three groups namely Brahmin, Chhetri and Newar have dominated the high level bureaucracy in the country. In 1991, these three groups constituted only 36% of the total population occupied more than 89.2% of the positions in civil servant whereas indigenous groups (except Newar) accounted for 33% of the total population occupied only less than 3% of the position in the government bureaucracy. Nepali bureaucracy, in which Brahmin, Chhetri and Newar groups who occupied major positions, unsurprisingly has been characterized by IPOs and scholars as club of certain groups and even manifestation of internal-colonial rule in the country. Many studies have shown that the trend of inclusions of indigenous and other marginalized groups have deteriorated over the last 15 years (Lawoti, 2005).
The situation in 2006 has become even worse as these three groups have over 97% representation in special class category whereas the representation to this category from the indigenous peoples and women was extremely low and there was no representation of Madhesis and Dalits to this. The roles of the high level bureaucracy in formulating, designing, deciding, implementing policies for the country was extremely vital and excluding the major chunk of the poor and marginalized section of the society from this important process would create vulnerable situation in the country. It is very unlikely that this trend will change in near future.
Similarly, in first class category, more than 90% bureaucrats were from the Brahmin, Chhetri and Newar group whereas Madhesi, indigenous peoples and Dalit represented only 7.5%, 0.75% and 0.75% respectively. In second class category, more than 85% were from the Brahmin, Chhetri and Newar group whereas Madhesi, indigenous peoples and Dalit represented only 11%, 3.27% and 0.51% respectively. The same trend was revealed for the third class category as well (Ministry of General Administration, 2006).
194 Also now the government formed a three-year Interim Plan (2007-2010) but like ever before, the designers, and implementers of this plan are the same dominant group. So, it is very unlikely that it would benefit the poor and marginalized groups from this plan as well.
6.1.8 DDC Chairpersons, Mayors and Deputy Mayors of Municipalities
The representation and participation of different social groups in LBs after the local election in 1997 is presented in the above governance index. Upon analysis, the decision- making positions such as Chairpersons and Vice-Chairpersons of DDCs were again occupied by the high caste groups. Of the total 75 positions of Chairpersons of the DDCs whose terms had expired in July 2002, the high caste groups had 51 (68%) followed by ethnic groups (except Newar) who occupied 11 (14.66%), Madhesi 10 (13.33%) and Dalit 3 (4%).
Similarly, the position of Mayors and Deputy Mayors of municipalities were occupied largely by Brahmin and Chettries. Of the total positions of 116 Mayors and Deputy Mayors, 57 (49.13%) were from the high dominant groups followed by Dalit 25 (21.55%), Madhesi 24 (20.68%) and ethnic groups except Newar who had 10 (8.62%).
6.1.9 Leadership Position in different Council
The composition of different social groups in various councils such as press council, national development council, Nepal sport council and Nepal health research council were analysed in the above table. It revealed that the Brahmin/Chettri occupied more than 75% of the leadership positions of different council followed by Newar which was more that 18%. Then Madheshi and non-Newar ethnic groups occupy 7.4% and 1.6% respectively whereas there was almost no presentation from Dalit community to these councils.
6.1.10 Leadership Position in Academic and other Cultural Organizations
The caste/ethnic analysis of different social groups' representation and participation in leadership positions in organizations such as Royal Nepal Academy and other organizations related to the arts and cultures was also a way of looking into the status of participation in their socio-cultural spheres. From the above table, it was seen that Dalit and Madhesi representation/participation to these cultural organizations was nil. The participation of ethnic groups excluding Newar to these organizations was also non-
195 existent or extremely low. The hill dominant groups have a sole monopoly (more than 75%) in these sectors as well.
6.1.11 Leadership in Civil Society Organizations
Table portrays the very bleak situation of representation of poor and other marginalized groups in CSOs. These sectors too, have emerged as societies of dominant higher caste groups. Out of 363 leadership positions of CSOs in the country, 210 (57.85%) were from the high dominant groups which was followed by Newar as 117 (32.23%), ethnic groups other than Newar as 19 (5.23%), Madhesi as 16 (4.4%) and Dalit as 1 (0.27%).
It testifies that there was very poor representation of these groups in leading CSOs. May be because of the dominance of the influential higher caste groups in CSOs, not many voices have been raised by these societies until now about their grievances, problems, including, development rights and social justice. So far all these institutions have failed to deliver what they have been promising and advocating for in the name of empowering and development the poor and excluded groups of our society. 6.1.12 Leadership Position in Industrial, Commercial Organisations and Situation of Employment Opportunities
Since participation in organizations related to trade, industry, commerce and economic services is considered as indicators of economic participation and well-being of the people, the data of caste/ethnic participation in these sectors is also presented in the above table. Out of total 94 leaders in the above table, 41 (43.61%) were from Newar followed by Brahmin and Chettri 26 (27.65%) and Madheshi and other communities from Indian origins was 26 (27.65%). There was only 1 (1.09%) person from the ethnic groups (excluding Newar) and there was no representation from the Dalit community. It shows that the caste/ethnic composition of the leadership positions in industrial and commercial organizations where the participation of Dalits, ethnic groups excluding Newars and women was extremely discouraging. In the absence of state backed policies for inclusion of excluded as well as lack of basic education and access to decision- making bodies on the part of these groups as well as the lack of necessary capital, professional skills and technology resulting in a general lack of resources and capacity to compete in the increasingly liberalized and globalized economy, a large portion of population from these communities remain underemployed or unemployed. They were confined to informal and unorganized sectors of labor. The cultural aspects of ethnic groups could be another reasons for less or no participation in trade, industry and
196 economic services as they wanted to go for foreign jobs, army rather than engage themselves in trade and industry.
According to a data of 2005, there has been an increase from 32% to 42% underemployment during the last 10 years in the country. Amongst the country's labor force of about 10.5 million people, unemployed population has been reported to be around 3.8% and most of them are from the indigenous peoples (NPC, 2007). Due to the lack of job opportunities in the country, many youths are compelled to migrate as wage labourers in Gulf countries in the Middle East and other South East Asian countries from where country receives billions annually as remittance. Despite the fact that remittance has certain level of positive impact on household economy, migration for wage labor has also increased the process of dispossession of land and property from the ethnic groups.
Upon analysis of the above table 6.1 on 'Integrated National Caste/Ethnic Index of Governance', it can be concluded that there was an all-round monopoly of Brahmins, Chhetris and Newars in almost all state machinaries and resources. It has been favoured by every state mechanism, policies, strategies, Laws and Constitutions. The situation during the Panchayat period got worse which trend continued even after the post-1990 period. It shows further strengthening of the monopoly of the high caste groups on state machineries and resources.
Furthermore, the processes of linguistic, social and political discriminations, social exclusion, economic marginalization and other activities carried out by the centralized state machineries extensively destroyed the languages and cultures of the ethnic groups. They have been persecuted, neglected, exploited, excluded and marginalized socially, economically and politically and conditions that render them aliens in their own country have been created. Their marginalization has stymied their overall development and left them lagging far behind in most spheres of national life. An overwhelming proportion of most of the ethnic groups and Dalits live below poverty line.
The Nepalese women occupying more than 50% of country's total population, they have still not been able to join the mainstream of national development. The nation's sustained development cannot be achieved without the full participation of women. Also, very few women occupied decision-making positions in Parliament, the judiciary, executive and national planning of the state. Due to the increasing brunt of poverty, social oppression, ethnic and gender discrimination, killings, violence and trafficking, these women were surviving miserable lives. The status of women is considered one of the factors that influence a nation's social, economic and cultural development.
197 The low participation of women in the country's administration and policy execution means that the country's whole bureaucratic system was totally exclusive. The low status of women, who are an inseparable part of the nation, clearly showed the caste/ethnic inequality and discrimination within gender discrimination. It clearly showed that, on one hand, the educated workforce among these women was extremely low and on the other hand even educated women were facing a dire situation of unemployment. The civil service indeed played in practice a bridging role between the people and the government. However, due to the gender discrimination in the state mechanisms, half of the workforce has become incapacitated. Owing to this discrimination, there was also a big inequality even among women. Because of this gap among women of different ascribed identities, these women never felt the state has been shouldering any responsibilities towards them.
The widening gaps, as explained above, between dominant and other marginalized groups to participate in governmental, non-governmental including socio-cultural, economic and political arenas were the major causes of the current conflict and political instability.
The situation was extremely discouraging and hopeless for women, non-Newar ethnic groups, Muslims, Dalits and other backward communities. Under the existing state structures, their entry to state machineries seemed to be next to impossible.
6.2 Institutional Framework: Peoples' Participation in Local Institutions The Constitutions, policies, strategies, Laws, Acts, plans, rules and regulations of the state governments of different times emphasized that the LBs (VDCs, Municipalities and DDCs) are the foundations of the any system of governance. Accordingly, the state government has attempted to empower these bodies and local peoples by implementing all these strategies, policies and Laws as they play a crucial role in initiating and implementing various development activities to promote the peoples' participation because devolving the powers and authorities of the centre to the local level is to make the governance system more receptive to the needs of the local and poor peoples. It has however not been examined as to how all these initiatives have worked out to make the decentralized local governance process a success. For this, some indicators to assess the effectiveness of participatory decentralization programmes such as the local level of participation of concerned stakeholders in different government institutions, institutional arrangements to facilitate their engagements, the extent to which stakeholders are mobilizing the local resources, transparent access to and use of these local resources,
198 equality of access to decision-making, level of trust of ownership of the whole process and level of self-management of these institutions at the local level have been developed and examined here.
This section below analyses the extent of the devolution of power and authority from the centre to the local (micro) level by examining the situation of peoples' participation in DDCs, VDCs, local level political parties, local institutions and Committees which are as follows:
6.2.1 District Level Political Participation and Representation
During partyless Panchayat epoch, district Panchayats were treated and recognized as important administrative layers. These were used to recruit loyal political cadres and activists to expand feudal patronage to districts. After the political movement of 1990, particularly as per the provisions made in LSGA, districts have been perceived as core elements of decentralization scheme for undertaking local development initiatives in the country. Accordingly, DDCs have been functioning as a higher-tier of the LBs of the central government. As per the existing state structure, the main decision makers at the district level are the Chairpersons, Vice-Chairpersons and Ilaka members. In light of this, an attempt is made here to analyze the political participation and representation of different caste and ethnic groups including the females at district level as presented below:
Table 6.2: District Level Political Representation by Caste/Ethnicity in Local Elections of 1997
Chairmen Vice-Chairmen Ilaka Members Total Caste/Ethnicity Male Female Male Female Male Female No % Brahmin and 57 - 45 - 661 25 788 65.6 Chhetri Newar 5 - 5 - 45 - 55 4.5 Ethnic groups 13 - 23 - 266 17 319 26.6 excluding Newar Dalit - - - - 6 - 6 0.4 Others - - - - 34 1 35 2.9 Total 75 73 1,012 43 1,203 100 Source: Election Commission (1997) and Association of District Development Committees of Nepal (ADDC/N), 1998
Table 6.2 shows the district level political participation of different caste and ethnic groups in local elections of 1997. According to this, the decision makers such as the
199 Chairpersons, Vice-Chairpersons and Ilaka members were from the male Brahmin and Chhetri groups. The above table also reveals the details about the women's participation in DDCs where not a single woman has ever been elected to the posts of Chairpersons and Vice-chairpersons. Among Ilaka members, in comparison to 1,012 men (96%), there were only 43 women (4%). Of them, only 17 were from the ethnic groups excluding Newar. Thus, the situation of women's representation at the district level was worse than that of VDCs. The main reason for this extremely low representation of both males and females of ethnic groups and Dalits at LBs was due to the restrictive nature of LSGA which was prepared without due consultations with the ethnic and other marginalized groups of the society. Other facts were that the LB leaders were elected on the party tickets and those who make decisions about allocation of party tickets were not from the ethnic and other excluded groups. The top leaders of the political parties were from the Brahmin, Chhetri and Newar groups who controlled basically everything.
Table 6.3: Women's Participation in Local Elections of 1997 Total Women Upper Caste Women LB Positions Total Positions Candidates Candidates Ward Members 142,956 3,075 (2.1%) 1,305 (42.45%) Ward Chairpersons 35,739 572 (1.6%) 276 (48.25%) VDC Vice-Chairpersons 3,971 82 (2.1%) 32 (39%) and Deputy Mayors VDC Chairpersons and 3,971 40 (1.1%) 19 (48%) Mayors DDC Members 1,056 35 (3.2%) - DDC Vice-Chairpersons 75 3 (4%) - DDC Chairpersons 75 1 (1.3%) - Source: Based on data collected from the Election Commission (2001)
Political participation of women in different positions at the local level is illustrated in table 6.3 above where women candidates in 1997 local elections for Ward members, Ward Chairpersons, VDC Vice-chairpersons and deputy Mayors, VDC Chairpersons and Mayors, DDC members, DDC Vice-chairpersons and DDC Chairpersons were limited to only 2.1%, 1.6%, 2.1%, 1.1%, 3.2%, 4% and 1.3% respectively. Out of these percentages, 42.45%, 48.25%, 39% and 48% were for the positions of Ward members, Ward Chairpersons, VDC Vice-chairpersons and deputy Mayors, VDC Chairpersons and Mayors respectively were the women candidates from the high caste groups. From the above, it can be said that the political participation of women in decision-making processes at the local level was highly neglected.
200 6.2.2 Positions Held by Different Political Parties in Local Bodies
All would agree that the political parties in any open society are the backbone of a vibrant democratic system and they can bring about social, cultural, economic and political changes. The political parties therefore have a direct and meaningful role in making VDCs, Municipalities and DDCs functional, transparent and accountable to the peoples they should serve. These LBs are in fact the local development units which are managed by peoples' elected representatives for the empowerment and development of the people who elected them. As LBs are organized within certain areas, the elected representatives after the elections must be free from any political ideologies and prejudices to work for the people elected them and it is only through this that the development endeavors and processes become impartial, dynamic, stable and sustainable. After the political change in 1990, Nepali people witnessed only two local elections in 1992 and 1997 and the table below presents the situation of the total seats each political party had won in LBs in those two local elections.
Table 6.4: Positions Held (in percentage) by Different Political Parties in Local Elections in 1992 and 1997 1992 Local 1997 Local Elections Elections S No Local Bodies Political Parties (NC led (UML, RPP and NSP Government) Coalition Government) 1 VDC NC 50% 30% CPN (UML) 26% 51% RPP 10% 13% NSP 3% 1% UPF, Nepal 5% - Independent/others 6% 5% Total 100% 100% 2 Municipality NC 51% 29% CPN (UML) 22% 56% RPP 10% 8% NSP 3% 2% NWPP - 2% UPF, Nepal 2% - Independent/others 12% 3% Total 100% 100% 3 DDC* NC 696 (65%) 121 (14%) CPN (UML) 193 (18%) 577 (68%) RPP 82 (8%) 84 (10%) NSP 21 (2%) 12 (2%) UPF, Nepal 38 (3%) - Independent/others 52 (4%) 53 (6%) Total 100% 100% Source: Adapted from Khanal (1995), Maharjan (1998) and election commission. *Election completed in only 57 districts in 1997 and it includes only the chairpersons, vice-chairpersons and members.
201 Table 6.4 above reveals that the political party in power has every possibility of winning a clear majority of LB elections. They use every state resources to get election results in their favor so that it would be easier for them reach to the grassroots level to implement their party manifestos, agendas and policies so as to enhance their strength from national to grassroots levels. In 1992, the NC won a countrywide majority in all three LBs ie: 50% of VDCs, 51% of municipalities and 65% of DDCs whereas CPN (UML) won 51% of VDCs, 56% of municipalities and 68% of DDCs in 1997 when they were at the helm of the power for nine months in 1993-94.
In Nepali politics, particularly the post-1990 period, the culture of political pluralism has not developed as desired. This was evident on the functioning of LBs at grassroots as well. We had experienced that a political party who had a majority in the central government whereas the opposition party had its predominance at the LBs often making difficult for the central authority to implement its plans, policies and programmes.
On the contrary, the political party who had a majority at the local level often complained and criticized the central government that the LBs under its controls have been often ignored by the centre.
6.2.3 People's Participation and Representation in VDC Level Elections
Since the Panchayat period, the village Panchayat had been then considered as a main base of local peoples' participation for the local development. Accordingly, the central authority attempted to delegate some authorities to them. After 1990, the VDCs as the lowest tier of the local government have been treated as very important local institutions that control local level development programmes and co-ordinate all local level development initiatives at the grassroots level. The government policy makers, political leaders, development planners, bureaucrats and the like consider VDCs as foundation for the local development and are formally organized entity at the lowest level of decentralization and local governance. That was why, different governments formed during different times, particularly after 1990, have been providing block grants to them and all local peoples' inclusive participation and representation in VDC level elections in managing these scarce funds are extremely important. In connection with this, an attempt is made below to analyse the VDC level peoples' political participation of two VDCs of the study districts in two local elections held in 1992 and 1997 respectively.
202 Table 6.5: VDC Level People's Political Participation by Caste/Ethnicity in both 1992 and 1997 Local Elections
Local Elections Local Elections 1992 S No VDC/ Positions Held Total 1997 Total District Ethnic18 Non-Ethnic19 Ethnic Non-Ethnic 1 Babiabirta/ Chairperson - 1 1 - 1 1 Morang Vice-Chairperson 1 - 1 - 1 1 Ward 28 17 45 34 11 45 Chairpersons and members Members 1 1 2 2 0 2 nominated 2 Devbhumi Chairperson - 1 1 - 1 1 Baluwa/ Vice-Chairperson 1 - 1 - 1 1 Kavre Ward 32 13 45 38 7 45 Chairpersons and members Members - 2 2 - 2 2 nominated Source: Field works in Kavre and Morang districts, August - December 2007
On analyzing the above table 6.5, it reveals that the positions of VDC Chairpersons, who plays important roles in VDC level decision-making processes, in both VDCs of both districts in both local elections of 1992 and 1997 were won by the high caste groups whereas the position of vice-Chairpersons in both VDCs were own (50% each) by ethnic and non-ethnic groups in both local elections. In Babiabirta VDC, 61% of the Ward Chairpersons and members were from ethnic groups whereas 39% were from non-ethnic groups and in 1992 elections. Similarly in Devbhumi Baluwa VDC of Kavre district, 68% of the Ward Chairpersons and members were from ethnic groups whereas 32 % were from non-ethnic groups in local elections of 1992.
Similarly, in Babiabirta VDC of Morang district, 76% of the Ward Chairpersons and members were from ethnic groups whereas 24% were from non-ethnic groups in local elections of 1997. Similarly in Devbhumi Baluwa VDC of Kavre district, 80% of the Ward Chairpersons and members were from ethnic groups whereas 20% were from non- ethnic groups in local elections of 1997. No women had contested in both local elections except nominating a few of them directly.
18 Ethnic groups comprise of 59 groups of both Hill and Tarai regions recognized by the Government of Nepal. 19 Non-ethnic groups comprise of Hill and Tarai Brahmin, Chhetri, Thakuri, Madhesi and Dalit
203 The LSGA had introduced a mandatory women's representation in LBs. In each nine wards of a VDC or Municipality, one of the five elected ward members had to be a woman. One woman had to be nominated to the Councils of the VDCs, Municipalities and DDCs. Before the expiry of the terms of the LBs in July 2002, there were a total of 40,533 women representatives in LBs as a direct result of these mandatory provisions in whole Nepal. On the other hand, only 289 women were elected as ward Chairpersons out of a total of 35,217 wards where elections were held. Also the LSGA made provisions for including women on various committees but there were no provisions to ensure their active involvement in decision-making and implementation processes. Also the nominated women members of VDCs and Municipalities did not have the same status as their male counterpart members. They were often kept out of planning processes and decisions regarding the allocation of resources.
It can be concluded that the representation of ethnic groups in lower levels such as the Ward Chairpersons and members of VDCs have been increasing but their representation in decision-making positions such as VDC Chairpersons and Vice-Chairpersons have not yet materialized. It was also found that there have been only physical presences of ethnic group in VDCs who have not really played any concrete roles in decision-making there. If they haven't been able to raise their issues and voices, their physical presentation per se would have no meaning. Because of the overall domination of the high caste groups in VDC level political participation, no voices and concerns of the marginalized groups have been raised by them till now including their development and making them able to assert rights so as to live a dignified life.
We are aware of the fact that the VDCs are the foundation of the democracy and local development which have important roles and responsibilities to undertake the local level development activities related to the health, education, forest management, drinking water, agriculture development, social welfare and so forth. All these activities can not be equitably undertaken and distributed to all the peoples if they are not elected and represented in these local bodies politically.
Regarding the budget allocation of VDCs to the marginalized groups such as women, Madhesis, Dalits and ethnic groups, it was found that only Rs20,000.00 each were provided to Dalits and ethnic groups in Babiabirta VDC of Morang district from the FY 2006-07 only. No such allocation was made for women and Madhesi groups. Similarly in Devbhumi VDC of Kavre district, there are no separate provisions for allocating such budgets for ethnic groups, Dalits and women because nobody came to enquire about the budgetary provisions of VDC for them.
204 6.2.4 People's Participation and Representation in VDC Level Political Parties
Everybody agrees that the political parties are the vehicles as well as backbones of a vibrant democratic system. They have a direct and meaningful role in making VDCs, as the foundation of any democratic system, functional under the multi-party system of governance. The VDCs are in fact the local development units which are managed by peoples' elected representatives for the empowerment and development of the people. As VDCs are organized within certain areas and the elected representatives should be free from any political biasness to work for the people elected them and it is only through this that the development endeavors and processes become dynamic, impartial, stable and sustainable.
205 Table 6.6: Present VDC level People's Participation in Major Political Parties by Caste/Ethnicity S No VDC/ Political Positions Held Ethnic Non-Ethnic Total District Parties No No 1 Babiabirta/ Nepali Chairperson - 1 1 Morang Congress Secretary - 1 1 (NC) Members 3 2 5 Total 3 4 7 CPN Chairperson - 1 1 (UML) Secretary - 1 1 Members 2 3 5 Total 2 5 7 CPN Chief, Peoples' 1 - 1 (Maoist) Government Deputy Chief, Peoples' 1 - 1 Government Members 3 1 4 Total 5 1 6 RPP Chairperson - 1 1 Secretary - 1 1 Members 1 4 5 Total 1 6 7 2 Devbhumi Nepali Chairperson - 1 1 Baluwa/Kavre Congress Members 5 9 14 (NC) Total 5 10 15 CPN Chairperson/ - 1 1 (UML) Secretary Vice-Chair - 1 1 Vice-secretary - 1 1 Members 5 1 6 Total 5 4 9 CPN Chief, Peoples' - 120 1 (Maoist) Government Members 9 9 18 Total 9 10 19 Source: Field works in Kavre and Morang districts, August - December 2007
The VDC level peoples' participation of both VDCs in major political parties by caste/ethnicity is presented in table 6.6 above. Understandably, the NC, CPN (UML), CPN (Maoist) and RPP were the major political parties at the VDC level as well. The majority of the key positions such as the Chairpersons, Vice-Chairpersons and Secretaries of these political parties in both VDCs are occupied by high caste groups.
20 From Dalit community
206 As per the table 6.6 above for Babiabirta VDC of Morang district, the VDC level position of Chairpersons of the NC, CPN (UML) and RPP were from the high caste groups whereas the Chief of the CPN (Maoist) party was from the indigenous community. Similarly, the majority (more than 50%) of the members of NC, CPN (UML) and RPP were from high caste groups but in CPN (Maoist), more than 80% of the members were from the indigenous communities.
Similarly, in Devbhumi Baluwa VDC of Kavre district, there were only three main political parties namely NC, CPN (UML) and CPN (Maoist). The positions of Chairperson of NC and Secretary of CPN (UML) parties were occupied by high caste dominant group whereas the VDC Chief of CPN (Maoist) was from the Dalit community. For NC, CPN (UML) and CPN (Maoist) parties, their proportions of non-ethnic and ethnic members were 66% and 34%, 44% and 56% and 50% and 50% respectively.
The CPN (Maoist) has comparatively good participation at both senior and junior positions from the ethnic and other marginalized communities whereas the NC and CPN (UML) were largely dominated by the high caste groups. It was found that there were no women represented in any major political parties locally. There was a high prevalence of policy biases and discriminatory practices against them right from the grassroots level.
From this, one can conclude that the CPN (Maoist) has been more inclusive and raises the unheard voices, issues and agendas of the poor and excluded groups than other mainstream political parties.
It was also found that the local political parties, other than the CPN (Maoist), were not aware about the issues and problems facing the poor and marginalized groups. Moreover, these major local political parties have not worked seriously to bring these poor and marginalized groups into their party fold and make them politically aware except the CPN (Maoist) in both study VDCs.
Despite of the above scenarios, some respondents expressed that the peoples, who have not been able to represent in local level politics, were equally responsible for these gaps. Among many other things, socio-cultural practices, political, economic, education and awareness factors were the major ones which have affected their participation. They lack adequate courage and consciousness to fight and assert their rights and positions politically.
207 6.2.5 Ward Level Peoples' Political Participation and Representation
As per the present structure of the state, there are a total of 36,041 Wards of municipalities and VDCs which are considered as the very base of our democratic state structure. It was therefore important to analyze the situation of ward level political participation and representation of different caste and ethnic groups.
Table 6.7: Situation of Elected and Nominated Ward Representatives by Caste/Ethnicity in Local Elections of 1997 Mountain/Hill Tarai Caste/Ethnicity % Caste/Ethnicity % Brahmin 38 Brahmin 19 Chhetri 21 Chhetri 13 Magar 9 Magar 3 Tharu - Tharu 26 Tamang 7 Tamang 5 Newar 3 Newar 6 Gurung 1 Gurung 2 Rai 2 Rai 2 Limbu 5 Limbu - Muslim - Muslim 6 Caste/ethnicity of occupation 11 Caste/ethnicity of occupation 5 Others 3 Others 13 Total 100 Total 100 Sources: Adapted from the National Gender Analysis on Elected and Nominated Women Ward Representatives 1998, UNDP.
Table 6.7 reveals that in hill and mountain regions, there was a strong domination of high caste groups in Ward level political representation. The domination of the same group was also strong in Tarai region where they had migrated. This indicates that there has been a huge gap among the elected and nominated women members in terms of ethnicity. In the hills, out of the total members, 27% belonged to ethnic groups and the rest were other remaining groups. In Tarai, out of the total members, 19% were Brahmins, 13% were Chhetris, 26% were Tharus and the rest were from other groups. The representation of women from the ethnic groups in powerful positions such as Chairpersons and Vice- Chairpersons of the VDCs was very negligible. Due to this ground reality, there was a high prevalence of social exclusions, policy biases and discriminatory practices against them right from the grassroots level.
208 6.2.6 People's Participation and Representation in VDC Level CBOs and other Organizations
After the peoples' movement of 1990, many governments formed have attempted to experiment the 'sectoral devolution', a new approach for decentralizing different sectors like education, health, forestry, agriculture and so forth by channeling the funds directly to locally elected community groups such as SMCs, CFUGs and SHPs which were empowered to manage key aspects of these devolved functions. In view of this, it was important to find out the micro-level data and information on local peoples' participation and representation to these locally elected groups and analyze who were really involved in and benefiting from these local level public services, resources and initiatives.
209 Table 6.8: Present Situation of People's Participation in Different Committees and User Groups to Utilize the Public Services and Resources by Caste/Ethnicity Non- S No VDC/ Organizations/ Positions Held Ethnic Ethnic Total Remarks District Institutions No No Chairperson - 1 1 Community Forest Vice-Chairperson 1 - 1 Has only 1 Babiabirta/ User Groups Secretary - 1 1 one CFUG Morang Treasurer - 1 1 in whole Members 2 3 5 VDC School Chairpersons 1 2 3 Management Members Covers 3 Committees (High 7 9 16 Secondary School Level) Secretary Schools - 3 3 (Principal) School Chairpersons 1 4 5 Covers 5 Management Members 10 15 25 Primary Committees Secretary Schools - 5 5 (Primary Level) (Principal) Has only Chairperson - 1 1 one Sub- Sub-health Post Members 4 2 6 health Post Chairperson 1 5 6 Community Forest Vice-Chairperson 3 3 6 User Groups Secretary 2 4 6 Has 6 2 Devbhumi Treasurer - 6 6 CFUGs in Baluwa/ Members 12 14 26 VDC Kavre School Chairperson - 1 1 Only one + Management Members 2 3 5 Level SMC Committees (+2 Secretary - 1 1 level) (Principal) School Chairperson - 1 1 Only one Management Members 1 5 6 High Committees (High Secretary School - 1 1 School Level) (Principal) level SMC School Chairperson 1 2 3 Covers 3 Management Members 10 13 23 Primary Committees Secretary Schools - 3 3 (Primary Level) (Principal) Chairperson - 1 1 Has only Sub-health Post Members one Sub- 3 9 12 health Post Ilaka Aurvedic Chairperson - 1 1 Has only Health Centre Members one Aurvedic 1 3 4 Health Centre Source: Field works in Kavre and Morang districts, August - December 2007
210 Table 6.8 above reveals the participation of both ethnic and non-ethnic peoples' in VDC level institutions such as SMCs, CFUGs, SHPs and Ilaka Aurvedic Health Centre which doesn't give a rosy picture either. These local institutions, too, emerged as avenues for dominant groups.
In Babiabirta VDC of Morang district, there was only one CFUG and the positions of its Chairperson and Vice-Chairperson were from the non-ethnic and ethnic communities where as 60% members were from the non-ethnic group and 40% of the same were from ethnic group.
Similarly, in Devbhumi VDC of Kavre district, there were six CFUGs. Out of six Chairpersons, five (83%) were occupied by the non-ethnic groups and remaining one (17%) was from the ethnic groups. In the same way, out of six positions of Vice- Chairpersons of CFUGs, three each were from both non-ethnic and ethnic groups respectively. In the same CFUGs, out of total 26 members, they were found to be 54% and 46% from both non-ethnic and ethnic groups respectively.
In three high schools SMCs of Babiabirta Box 6.1: Deprived from access to Local VDC of Morang district, two positions of Resources
Chairpersons have been occupied by the According to a local political activist of Kavre high caste group whereas remaining one district, all the benefits from the local resources such as CFs are captured by rich position was filled up by ethnic people of the village. The poor and community. Regarding the composition of marginalized groups of the villages continued to be deprived from equal access and benefits members of SMCs, 56% was occupied by from this. This is so because of their low level the high caste groups and remaining 44% of awareness about their rights. These factors are compounded by their lesser access to was by ethnic groups respectively. local economic resources and opportunities compared to other segments of the society. Empowering the local poor people to be able Similarly in five primary schools SMCs of to assert their rights to local resources and services as well as development programmes the same Babiabirta VDC, out of six will render development activities at local level pro-poor and people centred. Chairpersons, five (83%) were occupied by high caste groups whereas the remaining one (17%) position was from the ethnic groups. In the same way, out of total 25 members of SMCs, they were found to be 60% and 40% from both non-ethnic and ethnic groups respectively.
For Devbhumi VDC of Kavre district, there was only a +2 level management Committee which was led by the high caste groups and 60% members of this Committee was
211 occupied by high caste groups whereas remaining 40% by ethnic groups. Similarly, in the same VDC, there was only one secondary level SMC and the high caste group occupies the position of Chairperson and out of total six members of this SMC, five members (83%) were again from the high caste group and remaining one member (17%) was from the ethnic group.
In three primary level SMCs of the same Devbhumi VDC, two Chairpersons were from the dominant groups and remaining one Chairperson was from the ethnic groups. In the same way, out of total members of 23, 13 members (56%) were represented by the high dominant groups whereas remaining 10 members (44%) were from the ethnic groups.
All the 10 positions of secretaries of SMCs at all +2, high school and primary school levels were being occupied by the high caste groups in both study VDCs.
Regarding the participation of the local population in sub-health posts of two VDCs, the position of Chairperson of Babiabirta VDC of Morang was from the high caste groups and out of total members of six, four members (67%) were from ethnic groups and remaining two members (33%) were from the high caste groups. Similary, the position of Chairperson of SHP of Devbhumi VDC of Kavre district was occupied by the dominant group and out of the total 12 members of the same SHP, nine members (75%) and three members (25%) were occupied by non-ethnic and ethnic groups respectively.
There was no Ilaka based Aurvedic health centre in Babiabirta VDC of Morang district whereas there was only one of such centre in Devbhumi VDC of Kavre district of which the Chairperson was from the high dominant group. Similarly, out of the total four members of same health centre, three members (75%) and remaining one member (25%) were from non-ethnic and ethnic groups respectively.
Data presented and analysed above reveal that there was a strong domination of the high caste groups in all locally elected groups such as CFUGs, SMCs, SHPs and Aurvedic health centre. They all were basically captured by the local elites and influential groups taking all the benefits in the name of the poor and excluded groups. For instance, the key actors in SMCs were the parents from the dominant groups. Although the legal provisions of the country allow all the people to participate in these locally elected groups, the poor and marginalized groups have not been able to participate because of their very low level of rights claiming ability and awareness. When the poor and excluded groups were not represented in SMCs, they wouldn't get the chance to involve in all activities of the schools and it would not benefit the poor and excluded groups.
212
Similarly, there were many provisions that many groups and committees have to form to implement different programmes and projects at the community level and if all the communities of a VDC were not represented in those groups and committees, it was likelihood that the excluded groups would not benefit at all from any development interventions.
The representation of the ethnic groups and other marginalized groups to these locally elected groups has not been encouraging so far. This means, these local institutions were not inclusive of the poor and excluded groups and as a result, they have not been able to raise the voices and concerns of the poor, excluded, oppressed and marginalized sections of the society.
Also, these local groups have been functioning without any co-ordination, communication and prioritization with the VDCs. Therefore, this approach does not give importance for the local political processes where priorities across sectors and stakeholder groups can be discussed and negotiated.
6.3 Fiscal and Operational Frameworks
6.3.1 National (Macro) Level Scenario
It was observed that LBs in Nepal were totally dependent on the grants provided by the central government without which LBs can not function at all. Because of this ground reality, the centre has been providing administrative and capital grants to them. Detailed status of grants that central government authority had provided to LBs from FY 1999/2000 to 2006/07 was summarized as below: Table 6.9: Situation of Grants Provided by the Central Government to the LBs from FY 1999/2000 to 2006/07
Total National Fiscal Year VDCs Municipalities DDCs Total Development Budget (in ‘000s NR) 19,60,000 1,50,000 7,00,000 28,10,000 1999/2000 3,32,91,965 (5.88%) (0.45%) (2.10%) (8.43%) 19,56,000 1,50,000 7,00,000 28,06,000 2000/01 2,83,10,000 (6.90%) (0.52%) (2.47%) (9.89%) 19,56,000 2,00,000 8,10,000 29,66,000 2001/02 2,47,70,000 (7.89%) (0.80%) (3.27%) (11.96%) 19,56,000 2,00,000 8,10,000 29,66,000 2002/03 2,23,60,000 (8.74%) (0.89%) (3.62%) (13.25%)
213 19,56,000 2,00,000 8,10,000 29,66,000 2003/04 2,31,00,000 (8.46%) (0.86%) (3.50%) (12.82%) 19,56,000 2,00,000 8,10,000 29,66,000 2004/05 2,73,40,000 (7.15%) (0.73%) (2.96%) (10.84%) 19,56,000 1,76,000 10,10,000 31,42,000 2005/06 2,96,10,000 (6.60%) (0.59%) (3.41%) (10.60%) 39,15,000 1,76,000 10,54,700 51,45,700 2006/07 3,97,30,000 (9.85%) (0.44%) (2.65%) (12.94%) Sources: Subedi (2006), Report of the Local Authorities Fiscal Commission (2000), Report of Auditor General's Office (2008) and Economic Survey Report of MoF (2008)
Table 6.9 above reinforced that the LBs were highly dependent on the funding support from the centre. The percentage of the central governments national development budget (grants) to LBs from 1999/2000 to 2006/07 was in the range of 11%, out of which comes to be around 7.68% to VDCs, 2.98% to DDCs and 0.66% to municipalities. Municipalities were better to mobilize their internal resources compared to that of VDCs and DDCs because of too many existing numbers of VDCs making them unable to generate internal resource of their own and thus depending significantly on DDCs funding support. It was also becuase VDCs and DDCs have scattered geographical areas without any transportatin and communication facilities. Becuase of this, VDCs and DDCs needed more budget to manage them financially and administratively. That was why central provided more grants to VDCs and DDCs than the municipalities.
When these grants were given to LBs, virtually there was no involvement or participation of LBs in the process of determining these grants. The above table also shows that the grants given by the centre was based on the amount of the previous year without any considerations of inflations which indicates the possibility of the decreasing of the development activities of LBs. Also the grants to LBs were not tied with the increase in the central incomes. There was no fixed basis as to how much funds have to be made available to LBs creating uncertainty in the LBs and demands for such grants to centre from the LBs keep increasing. LBs were therefore not happy with the way the centre disbursed the grants to LBs. In addition, there was also no monitoring, supervision and actions on the proper use of the grants provided by the centre.
Government bureaucrats of Kathmandu have said that the promulgation and enactment of LSGA and LSGR were big achievements to give more power legally to LBs so as to enhance the service delivery by them. However, in terms of practical sense, there have been many gaps and problems to implement these and as a result, the LBs have failed to deliver even the basic services to the people as desired. The government, at the time of promulgating this act, did not do enough homework as what expenditure is needed to do a
214 particular work. As a result, the LBs have had to perform duties and responsibilities of local service delivery without any resources and capacities. The internal resources of LBs as per the spirit of the act could not be generated, that was why LBs had to depend heavily on central level grants and assistance which had a hidden interest of controlling the LBs for fulfilling the interests of the central ministers and top bureaucracy. Because of this, the central government grants to LBs were increasing every year to fund their development activities. The above table 6.9 supplemented this fact. During the period from 1999/2000 to 2006/07, the grants being provided to VDCs and DDCs by the central government have increased to 99.74% and 50.67%, respectively. The grants given to LBs have been increasing day-by-day. The provision of providing grants to LBs was very easy for the LBs, this practice didn't encourage LBs to optimize the internal resource generation and mobilization nor did it pressurize the LBs to make themselves financially sound and independent.
The centre has therefore failed to develop the human resources, technical, physical and financial capacity of LBs and their monitoring and supervisory mechanisms have been feeble. The LSGA had never though of LBs without the elected representatives but in reality these were left vacant without the elected representatives for a long time due to the violent insurgency and security unrest.
6.3.2 Local (Micro) Level Scenarios
As per the existing state structure, the VDCs, Municipalities and DDCs are the foundation of any vibrant democratic system. These are very important local institutions that control local level development programmes and co-ordinate all local level development initiatives as well in respective villages, municipalities and districts. To provide an overview of the whole fiscal and operational frameworks of these local institutions, details on internal and external financial resources of LBs, their income and expenditure details, central government's grants to LBs, revenue sharing among LBs, capacity of LBs to generate internal resources and status of budgetary requirements to meet administrative and development works of LBs have been analyzed and presented below:
215 Table 6.10: Incomes and Expenditures of VDCs and DDCs21 (development region-wise)
For VDCs - 2002/03 (in '000s NR) Development Income Expenditure Region Internal Grants Total % of Internal Adminis- Developmental Total % of Administrative Sources Resources trative Expenses Eastern 116,090 344,698 460,788 25 195,567 277,723 473,290 41% Central 177,452 466,411 643,836 28 521,565 375,287 896,852 58% Western 137,217 449,623 586,840 23 176,052 344,337 520,389 34% Mid-Western 25,875 178,825 204,700 13 143,750 107,525 251,275 57% Far-Western 22,980 133,284 156,264 15 81,962 90,005 171,967 48% Total 479,614 15,72,841 20,52,455 20% 11,18,896 11,94,877 23,13,773 48% Source: MoLD (2002-04) and adapted from the 'Analysis of Fiscal Status of VDCs and DDCs (2002-04)'
For VDCs - FY 2003/04 (in '000s NR) Income Expenditure Development Internal Grants Total % of Internal Adminis- Developmental Total % of Administrative Region Sources Resources trative Expenses Eastern 216,999 489,364 706,363 31 207,176 523,298 730,474 28% Central 109,109 806,927 916,036 12 245,795 617,485 863,280 29% Western 37,109 430,637 467,746 8 111,327 306,365 417,692 27% Mid-Western 29,325 266,800 296,125 10 81,075 189,175 270,250 30% Far-Western 42,130 221,374 263,504 16 67,025 189,202 256,227 26% Total 434,672 22,15,102 26,49,774 15% 712,398 18,25,525 25,37,923 28% Source: MoLD (2002-04) and adapted from the 'Analysis of Fiscal Status of VDCs and DDCs (2002-04)
For VDCs - FY 2004/05 (in '000s NR) Development Income Expenditure Region Internal Grants Total % of Internal Adminis- Developmental Total % of Administrative Sources Resources trative Expenses Eastern 78,584 387,562 466,146 17 133,057 317,015 450,072 30% Central 297,352 756,569 10,53,921 28 279,367 731,390 10,10,757 28% Western 49,191 368,501 417,692 12 120,820 288,242 409,062 30% Mid-Western 57,500 298,425 356,500 16 110,400 191,475 301,875 36% Far-Western 52,088 196,479 248,567 21 63,195 165,839 229,034 28% Total 534,715 20,07,526 25,42,241 19% 706,839 16,93,961 24,00,800 30% Source: MoLD (2002-04) and adapted from the 'Analysis of Fiscal Status of VDCs and DDCs (2002-04)
21 Covers only 555 VDCs (eastern region: 88 VDCs, central region: 129 VDCs, western region: 119 VDCs, mid-western region: 118 VDCs, and far-western region: 101 VDCs) of 15 districts (Jhapa, Dhankuta, Solu, Sinduli, Chitwan, Dhading, Nawalparasi, Tanahu, Mustang, Rolpa, Banke, Humla, Kailali, Darchula and Baitadi) of five development regions representing mountains, hills and Tarai regions.
216 The above three tables provide details of incomes (from their own internal sources and grants from DDCs) and expenditures (administrative and developmental) of 555 VDCs for 2002/03, 2003/04 and 2004/05. The total share of VDCs from their own internal sources to the total income of VDCs were NRs480 million (23%), NRs435 million (16%) and NRs535 million (21%) whereas the share of grants received from DDCs were NRs1,573 million (77%), NRs2,215 million (84%) and NRs2,008 million (79%) in 2002/03, 2003/04 and 2004/05 respectively. The above tables also showed that the contribution of the internal resources from the mid-western and far-western development regions was less than eastern, central and western development regions. Also the average contributions of the internal resources to the total incomes of 555 VDCs were 20%, 15% and 19% whereas their administrative expenses were 48%, 28% and 30% in 2002/03, 2003/04 and 2004/05 respectively. It means the internal resources that VDCs generated couldn't even meet their administrative expenses. Therefore the VDCs themselves could not run as viable units of local development on their own. From this, one can conclude that the major chunk of the incomes of VDCs come from the grants (more than 80%) from the DDCs.
Regarding the expenditures of 555 VDCs as stated above, the average percentage of administrative expenses in 2002/03, 2003/04 and 2004/05 were 48%, 28% and 30% respectively. It means, averagely, more that 35% of the VDCs budget was spent on administrative expenditures and it was even more for VDCs of mid-western and far- western regions which come to be 53%, 28% and 32% and only remaining of 47%, 72% and 68% were spent on developmental activities for 2002/03, 2003/04 and 2004/05 respectively on an average.
217 For DDCs - 2001/02 (in '000s NR) Income Expenditure Development Grants Internal Revenue Total Adminis- Developmental Total % of Administrative Region Sources Sharing trative Expenses Eastern 132,560 117,808 91,536 341,904 213,104 394,976 608,080 35% Central 169,803 285,171 126,008 580,952 196,289 210,596 406,885 48% Western 142,016 125,104 125,184 392,304 154,416 200,832 355,248 44% Mid-Western 131,130 39,435 42,360 212,925 201,030 133,875 334,905 60% Far-Western 87,867 46,953 32,661 167,481 88,101 29,367 117,468 75% Total 663,376 614,471 417,749 16,95,596 852,940 969,646 18,22,586 52% Source: MoLD (2002-04) and adapted from the 'Analysis of Fiscal Status of VDCs and DDCs (2002-04)
For DDCs - 2002/03 (in '000s NR) Development Income Expenditure Region Grants Internal Revenue Total Adminis- Developmental Total % of Administrative Sources Sharing trative Expenses Eastern 152,912 106,096 59,936 318,944 116,592 147,600 264,192 44% Central 183,787 258,419 134,615 576,821 176,168 454,290 630,458 28% Western 154,528 115,728 121,840 392,096 161,680 158,560 320,240 50% Mid-Western 146,685 62,475 35,825 244,985 113,310 109,740 223,050 51% Far-Western 109,125 18,162 36,126 163,413 91,701 35,649 127,350 72% Total 747,037 560,880 388,342 16,96,259 659,451 905,839 15,65,290 49% Source: MoLD (2002-04) and adapted from the 'Analysis of Fiscal Status of VDCs and DDCs (2002-04)
The above two tables provide details of incomes (grants, internal sources and revenue sharing) and expenditures (administrative and developmental) of 15 DDCs for 2001/02 and 2002/03. In 2001/02, the total share of DDCs internal sources, grants and revenue sharing was NRs614 million (36%), NRs663 million (39%) and NRs417 million (25%) to the total income of DDCs whereas the same for 2002/03 was NRs561 million (33%), NRs747 million (44%) and NRs388 million (23%) respectively. From this we can conclude that the major chunk of the incomes of DDCs come from the grants from the central government. The above tables also revealed that the DDCs of mid-western and far-western contributed less to the total revenues compare to that of eastern, central and western development regions.
218 On the expenditure front of DDCs as seen above, the average percentage of administrative expenses in 2001/02 and 2002/03 were 52% and 49% respectively. It means, averagely, more that 50% of the DDCs budget was spent on administrative expenditures and it was even more for DDCs of mid-western and far-western regions which come to be 68% and 62% on average for 2001/02 and 2002/03 respectively. Viewed in totality, the administrative expenses of DDCs comprised of mainly staff salaries, allowances, TA/DA whereas they spent less on developmental activities of DDCs.
219 Table 6.11: Situation of Internal Resource Generating Capacity of VDCs of Five Development Regions for FY 2002/03 to 2003/04 (in '000s NR) FY 2002/03 FY 2003/04 Development Region Mountain Hilly Region Tarai Region Mountain Hilly Region Tarai Region Region Region Eastern 7 36 523 8 49 427 Central 5 166 396 - 147 149 Western - 51 258 3 32 91 Mid-Western 2 3 128 - 21 140 Far-Western 3 10 217 - - 298 Total 17 266 1,522 11 249 1,105 Source: MoLD (2002-04) and adapted from the 'Analysis of Fiscal Status of VDCs and DDCs (2002-04)
The above table reveals that the internal resource generating capacities of VDCs of Tarai were much higher than the mountain and hilly regions. For 2002/03, VDCs of Tarai, hilly and mountain regions of all the development regions contributed NRs1.52 million (84%), NRs0.27 million (15%) and NRs0.017 million (1%) respectively as their total internal resources whereas for 2003/04, contributions from VDCs of all the ecological regions of all development regions were NRs1.10 million (81%), NRs0.24 million (18%) and NRs0.011 million (1%) respectively. The amount of internal resources of VDCs of all ecological regions of all development regions had reduced from 2002/03 to 2003/04.
220 6.3.2.1 Analysis of the Fiscal Status (incomes and expenditures) of Municipalities
After the peoples' movement of 1990, the trend of working with municipalities towards accomplishing the decentralization schemes continued which had begun in 1919 by giving a small role to the Kathmandu municipality to look after and settle the petty judicial conflicts as well as the issues related to the cleaning the city and sanitation problems.
The changed Nepalese political context after 1990 emphasized that the decentralized financial management was one of the key factors of good governance that covers the financial accountability and transparency. The municipal finance system was also complex and incoherent. In view of this, mobilization of the financial resources and their effective use to provide basic municipal services (roads, drainages and water supply etc) to the people was one of the main issues when we talk about the resource base of Municipalities.
There are altogether 58 municipalites (one as metropolitan city - Kathmandu, four as sub- metropolitan cities - Pokhara, Lalitpur, Birgunj and Biratnagar, and rest as municipalities). Before the implementation of LSGA, the main source of income of municipalities was from Octroi (in the range of 60% to 90% among the municipalities) collected by themselves with other grants provided by the central government and donors through governmental institutions.
As per the provisions of LSGA section 265, municipalities were authorized and entitled to collect various taxes, fees, service charges, property rental and so on as their internal resources. Besides these, municipalities were also given grants and loans from the central government and other financial institutions and donors.
After the enactment of LSGA in 1999, the Octroi (a form of an indirect tax on the transported goods moving from one municipality to another and charged on 1% on the total value of the goods), one of the major sources of revenue of the municipalities, was discontinued and the government replaced it by the Local Development Fee (LDF) on the basis of their Octroi collection of the past years. Compared to this, contribution from other sources like tax and non-tax revenues, were very nominal.
221 Table 6.12: Revenue Sources of 58 Municipalities from FY 2001/02 to 2005/06 (Rs. in million) Particulars FY2001/02 FY2002/03 FY2003/04 FY2004/05 FY2005/06 a. Local Taxes including LDF 1,368 1,248 1,237 1,347 1,331 b. Fees and fines 247 324 360 409 385 c. Property rental 68 79 83 90 79 d. Other revenues 82 57 86 87 72 e. Own source revenue (a-d) 1,765 1,708 1,765 1,934 1,867 f. Misc. income 26 37 63 73 92 g. Grants 370 233 289 706 663 h. Loans 9 26 26 24 40 i. Balance forward 207 161 375 369 194 Total (f-j) 2,378 2,165 2,520 3,106 2,856 Source: Adapted from the reports on detailed revenue and expenditure breakdown with budget and key financial indicators of 58 Municipalities of Nepal, jointly prepared and published by Municipal Management Division, MoLD, LBFC and GTZ/UDLE (2008)
Table 6.12 shows that a detail revenue sources of 58 municipalities from 2001/02 to 2005/06 which included local taxes including LDF, fees and fines, property rents, other revenues, miscellaneous incomes, grants and loans. The total revenues generated for 58 municipalities during 2001/02 to 2005/06 were Rs2,378, Rs2,165, Rs2,520, Rs3,106 and Rs2,856 millions respectively and contributions from LDF to these revenue sources were Rs1,066, Rs989, Rs986, Rs990 and Rs987 millions respectively during the same period. This means, LDF's contribution to the total revenue sources were 45%, 46%, 39%, 32% and 35% respectively.
From the above, it can thus be said that the mobilization of other taxes and fees such as vehicle tax, professional tax, house and land tax, house rent tax, contract tax, local market tax, entertainment tax, advertisement tax and sales tax as per the provisions of LSGA have not been encouraging in comparison to LDF. It should be emphasized here that without LDF, the municipalities as a whole even can not cover their day to day administrative expenditures. Since LDF was one of the major sources of municipal income which has to be abolished by 2011, the fiscal future of municipalities seems to be uncertain at the movement. The future absence of LDF, which now contributes approximately 74% of local tax revenue for municipalities will surely create a big revenue crisis for municipalities.
It was evident from the above table that another source of income of municipalities was the grants received from the centre (particularly the MoLD) and the municipalities received Rs370, Rs233, Rs289, Rs706 and Rs663 millions in 2001/02, 2002/03, 2003/04,
222 2004/05 and 2005/06 respectively. The trend of providing grants by the centre has not been consistent and incoherent over these years without any valid justifications. It can be said that Nepal's municipal finance system too functions on ad-hocism.
At present, MoLD is the main source of development funds to municipalities. There is a general belief that the municipalities are better off in terms of its resources compared to that of VDCs and DDCs. However, the reality is different. Most of the municipalities are highly dependent on the central government grants and transfers. Their own source of revenues can only cover some of the necessary municipal expenditures. Different ministries, central level institutions, departments have been providing both regular and irregular grants and loans to the municipalities. In 2004/05 and 2005/06, the total transfers were estimated around 2.47 billion rupees but the exact dates of disbursements, disbursed amounts and from where and also the number of benefited municipalities from these disbursements have not maintained transparently.
223 Table 6.13: Expenditure Details of 58 Municipalities for FY 2001/02 to 2005/06 (Rs. in million) FY2001/02 FY2002/03 FY2003/04 FY2004/05 FY2005/06 S No Major Expenditure Heads Amount % Amount % Amount % Amount % Amount % Current/Administrative 888 41.07 784 44.36 835 38.65 811 29.74 843 34.95 1 Expenditure Salary 491 22.71 475 26.88 465 21.52 407 14.91 463 19.19 Allowances 80 3.70 48 2.73 55 2.54 72 2.63 50 2.07 Services 43 1.98 38 2.15 53 2.45 51 1.87 46 1.90 Fuel 44 2.05 43 2.43 51 2.36 56 2.06 72 2.98 Contingencies 77 3.56 53 2.99 64 2.97 78 2.87 76 3.15 Other current/administrative 153 7.07 127 7.18 147 6.81 147 5.40 136 5.63 expenses 2 Debt Payment 63 2.91 67 3.79 62 2.87 77 2.83 58 2.40 3 Social Programmes 139 6.45 177 10.03 244 11.30 289 10.59 307 12.73 4. Ordinary Capital (Equipment, Furniture and 25 1.15 13 0.74 35 1.62 18 0.67 76 3.15 Furnishings) 5. Capital Investment (Public 1,047 48.42 726 41.08 984 45.56 1,532 56.17 1,128 46.77 Expenditures) Total Expenditure 2,162 100 1,767 100 2,160 100 2,727 100 2,412 100 Source: Adapted from the reports on detailed revenue and expenditure breakdown with budget and key financial indicators of 58 Municipalities of Nepal, jointly prepared and published by Municipal Management Division, MoLD, LBFC and GTZ/UDLE (2008)
224 All the expenditures of municipalities were assigned by section 32 of LSGR as classified and detailed in its annex 28. The above table 6.11 shows an overview of the municipal expenditures of all 58 municipalities from FY 2001/02 to 2005/06. It reveals that the average current/administrative expenditures during 2001/02, 2002/03, 2003/04, 2004/05 and 2005/06 were 41.07%, 44.36%, 38.65%, 29.74% and 34.95% respectively whereas the public expenditure including capital expenditure and social programmes constituted only 56.02%, 51.85%, 58.48%, 67.43% and 62.65% of the total expenditures respectively during the same five years. Out of the total average current/administrative expenditures of Rs832.20 million, an average of 521.20 million (62.63%) was spent only on staff salaries and allowances during these five fiscal years which is very high.
In terms of expenditures of Kathmandu metropolitan city for 2005/06, its total expenditure was Rs 571 million, out of which it spent Rs216 million (37.70%) on its current/administrative heads and the remaining Rs355 million (62.3%) was spent on social services, procuring capital goods and development activities. During the same FY, worse trends of spending more on current/administrative heads were seen in Jaleshor (71%), Lahan (65.99%), Nepalgunj (63.91%), Panauti (55.53%) and Rajbiraj (55.31%) leaving very little funds for the developing activities of the municipalities (GTZ/UDLE, 2008).
It should be noted here that out of total 58 municipalities, only around 8 (Kathmandu, Birgunj, Pokhara, Laliptur, Bhaktapur, Bharatpur and Butwal) of them can generate more than 50 million revenues per year on their own. From this, anyone can conclude that the resource bases of almost all the municipalities of Nepal were very weak. They can not generate their own resources to meet their current/administrative expenditures and therefore they were unable to carryout their social services and support development initiatives without external funding support.
225 6.3.2.2 Analysis of the Fiscal Status (both internal and external resources and expenditures) of DDCs Table 6.14: Incomes and Expenditures of Morang District from FY 1997/98 to 2004/05 (in '000s NR)
Particulars FY1997/98 FY1998/99 FY1999/2000 FY2000/01 FY2001/02 FY2002/03 FY2003/04 FY2004/05
A. Incomes i) Internal Sources (taxes, 7,587 10,917 15,296 43,297 67,037 39,336 43,451 30,301 fees, service charges etc) ii) External Sources22 (grants and other 0 31,750 29,739 20,565 28,895 25,519 38,303 40,685 programme supports)
Total 7,587 42,667 45,035 63,862 95,932 64,855 81,754 70,986 B. Expenditure i) Administrative 0 4,887 5,758 8,394 8,130 6,749 7,247 7,939 Expenses23 ii) Development 7,587 27,711 24,484 40,555 72,102 42,292 53,477 40,839 Expenses iii) Social Sector Related Expenses (human 0 10,069 14,793 14,913 15,700 15,814 21,030 22,208 resources, old age allowances and others Total 7,587 42,667 45,035 63,862 95,932 64,855 81,754 70,986
Source: Morang DDC, August – December 2007
Analysis of the income and expenditure details of Morang district for eight FY from 1997/98 to 2004/05 in above table 6.14 shows that it has attempted to tap all the resources that could possibly generate and mobilize. The trend of internal resource generation of this district reached to a maximum of NRs67.04 in 2001/02 which decreased significantly when the terms of the
22 Except funds received from VDCs 23 These expenses have been incurred only from the internal sources.
226 DDC's elected representatives expired in 2001/02. The combined expenses for the administrative, developmental and social sector related expenses of Morang district were NRs7.58 million, NRs42.67 million, NRs45.04 million, NRs63.86 million, NRs95.93 million, NRs64.86 million, NRs81.75 million and NRs70.98 million for 1997/98, 1998/99, 1999/2000, 2000/01, 2001/02, 2002/03, 2003/04 and 2004/05 respectively. For the same FYs, the contributions from the internal resources of DDC to these expenses were NRs7.58 million, NRs10.91 million, NRs15.30 million, NRs43.30 million, NRs67.04 million, NRs39.34 million, NRs43.45 million and NRs30.30 million respectively. These figures have indicated that the internal resources generated by DDC are far too little to meet its administrative, developmental and social sector expenses.
Table 6.15: Incomes and Expenditures of Kavre District from FY 1997/98 to 2005/0624 (in '000s NR) Particulars FY1997/98 FY1998/99 FY1999/2000 FY2000/01 FY2001/02 FY2002/03 FY2005/06 A. Incomes i) Internal Sources (taxes, fees, service 2,186 4,952 4,827 8,523 8,521 6,125 15,789 charges etc) ii) External Sources (grants and other 1,19,038 1,04,539 1,05,800 1,25,969 1,14,475 112,327 1,30,155 programme supports) Total 1,21,224 1,09,491 1,10,627 1,34,492 1,22,996 1,18,452 1,45,944 B. Expenditure i) Administrative Expenses25 (of internal 2,186 4,952 4,827 8,523 8,521 6,125 31,329 sources only) ii) Development Expenses 1,11,264 93,966 93,044 1,13,206 96,755 1,01,137 98,409 iii) Social Sector Related Expenses (human 7,775 10,573 12,756 12,763 17,720 11,190 16,206 resources, old age allowances and others. Total 1,21,225 1,09,491 1,10,627 1,34,492 1,22,996 1,18,452 1,45,944 Source: Kavre DDC, August – December 2007 and adapted from ‘Financial Autonomy of Local Authorities in Nepal’, In M Rijal and Shobhan G Pradhan (Eds.), Reading on Governance and Decentralization, IGD, Kathmandu (2002)
24 Data for FY 2003 to 2005 is unavailable at DDC Kavre. 25 For FY 1997-98 to FY 2002-03, it couldn't segregate the recurrent and development expenses, hence the amount of internal sources and administrative expenses are equal whereas in FY2005-06, the administrative expenses are both of internal and external resources.
227 Table 6.15 shows that all the internal income of Kavre district has been used to meet their administrative expenses. As LBs have given specific roles and responsibilities to tap different resources by the Acts and laws, they should be allowed to work as per the law. But here in practice, LBs did not have the right to allocate resources as per their decisions, rather they have to follow the directives of the central government on this matter (LSGA, clauses No 215-218, 228 and 265). It proved that the LBs have not been given free hands to decide the exact rate for any of these sources to generate the local resources as the central government itself has remained the sole authority to decide the actual rate through the LGSR under its clauses of the Act.
The contribution of external sources such as grants and programme support budgets to DDC's entire income was much higher. In 1997/98 to 2002/03, the share of internal resources to the total income was only 1.80%, 4.52%, 4.36%, 6.33%, 6.92% and 5.17% respectively. It means more than 90% of DDC's income sources come from the central grants and other programme support budget. In terms of its expenditures, the patterns of development expenses were also not consistent. There were gradual decreases in its development expenditures from 1997/98 to 1999/2000 from NRs111.26 million to NRs93.04 million respectively whereas the expenses for social sector increased from NRs7.77 million to NRs12.75 million for the same period of time.
From the above income and expenditure details of DDCs, they were totally dependent on the grants being provided by the central government as their share of internal income was very negligible. As long as they continue to be dependent on the central government, it would not be possible for them to perform as independent as envisaged by different Acts including LSGA. It shows that a mere transfer of power without the organizational capability and financial base do not increase the revenues of LBs. There was no co- ordination seen at the local level among LBs NGOs, CBOs, CSOs and private sector to mobilize local resources as well.
In terms of generating internal resources of DDCs, Morang district was better off than the Kavre district. It was because of the differences between different geographical regions in terms of the socio-economic conditions of the people, availability of the physical infrastructures, institutional capacity and other development parameters of LBs. There were rich as well as poor districts and obviously most of the peoples of the poor districts were not in a position to pay any taxes, thus, the capacity of LBs to generate the internal revenue was very low. Therefore, the policy of blanket decentralization of powers, authorities and resources to all the LBs wouldn't serve its desired purpose as deprived and marginalized areas would naturally depend more on central government support for
228
funding. This reality makes decentralization more problematic as the political and administrative devolution would be incomplete if most of the LBs lack financial resources.
Districts having different financial capabilities ought to be treated differently for the purpose of decision on grants by the central government. Because of this diversity among LBs, the present practice of providing blanket grants to VDCs was impractical and the existing number of whole LBs therefore needs to be restructured.
6.3.2.3 Analysis of the Fiscal Status (both internal and external resources and expenditure) of VDCs
Financial resources and budgeting are very crucial to run and manage and institutions or organizations and LBs were no exception. Budgeting was considered as one of the primary steps for financial management of LBs. Undertaking any given roles and responsibilities effectively and efficiently by any institutions largely depended on the availability of the adequate financial provisions. In view of this, income and expenditure patterns of two VDCs of the study areas were collected here for nine years from 1998/99 to 2006/07 which have been presented as below:
Table 6.16: Incomes and Expenditures of Babiyabirta VDC of Morang District from FY 1998/99 to 2006/07 (Amount in ‘000s NR) FY FY FY FY FY FY FY FY FY Sources Particulars 1998/99 1999/2000 2000/01 2001/02 2002/03 2003/04 2004/05 2005/06 2006/07 Incomes Internal House and land taxes, sales/proceeds,
Haat Bazaar tax,
land evaluation
tax, 245 240 250 234 225 230 228 235 255 recommendation (33 %) (32 %) (33 %) (32 %) (31 %) (32 %) (31 %) (32 %) (20 %) fees and other sources.
External Grants received 500 500 500 500 500 500 500 500 1,000 from DDC26 (67 %) (68 %) (67 %) (68 %) (69 %) (68 %) (69 %) (68 %) (80 %) Total 745 740 750 734 725 730 728 735 1,300 Expenditures Administration (personnel, 350 340 355 335 346 340 336 354 550 stationery and (47%) (46%) (47%) (45%) (46%) (46 %) (45 %) (47 %) (42 %)
26 The amount from DDC grant was increased to NRs1 million from FY 2006-07.
229 office related expenses)27 Development 400 400 400 400 400 400 400 400 750 related (53%) (54 %) (53 %) (55 %) (54 %) (54 %) (55 %) (53 %) (58 %) activities28 Total 750 740 755 735 746 740 736 754 1,300 Source: VDC Secretary and others of Babiyabirta VDC of Morang District, August – December 2007
In order to find out the actual situation of implementing the provisions made in legal enactments of Nepal, the data on actual income and expenditure details of Babiyabirta VDC of Morang district have been collected from 1998/99 to 2006/07 as illustrated in above table 6.16. It further provides details of both internal and external sources of VDC incomes and expenditures which consist of all administrative and development related activities.
The average contribution from the internal resources such as house and land taxes, sales/proceeds, Haat Bazaar taxes, land evaluation taxes and recommendation fees generated from the VDC comes to be 31% and its average external sources has been 69% for the above fiscal year. On the expenditure side of the VDC, it received a total budget of NRs5 million during the 1998/99 to 2006/07 from DDC as grants, out of which, it spent 46% in administrative expenses whereas remaining 54% was spent on development related activities during these FYs on average.
It shows from the above table that the internal resources generated from the VDC was even not enough to meet the cost of staff salary, provident funds and office maintenance and for that they need at least NRs0.40 million per year. We can conclude that this VDC has insufficient internal resources to manage its own administrative expenditures let alone the development activities of the VDC.
Until the end of June 2002, when VDCs had the elected representatives, the VDC Chairpersons and Vice-Chairpersons were provided with the monthly allowances. After the expiry of their terms, VDC Secretary has been provided with the monthly allowance from the VDC funds. Out of the NRs0.50 million grants received from the DDC, only NRs0.40 million was spent on developmental activities of the VDC. In fact, there were
27 It mainly includes all expenditures related to salary for staffs, repair and maintenance of the VDC building, provident funds for staffs, TA/DA, cycle purchase, repair of bikes, allowances for VDC Ward Chairman, Vice-Chairperson and VDC Secretary, donations to needy people and contingencies. 28 It is used for very limited support in education, health services, irrigation, drinking water, gravelling the road and purchase of hume pipes. The actual demands for these developmental activities from the peoples are much higher than the allocated budget.
230 various demands from the villagers for developmental activities which come to be more than 0.35 million which VDC could not provide as their share of internal resource generation was so minimal. Due to the insufficient funds, VDC provides 10 to 15 thousands to every ward of VDC randomly, said the VDC Secretary and Assistant.
Box 6.2: What Comes First: Meeting Allowance for the Elected Representative or Development for the Poor Villagers?
One of the former elected VDC official of Babiyabirta VDC of Morang district stated that it has been an accepted reality that once s/he is elected to VDC, s/he is confined only to his/her personal gains. The poor villagers who elect their leaders seemed to have forgotten or many of them were not aware that these elected representatives represent them in bringing the 'development' activities for the villagers elected him/her. In fact, this short story was revealed in one of the FGDs about how an elected representative gives priority for personal gains rather than the common benefits of the villagers as a whole.
The VDC had decided that it should organize its ward level meetings twice a month to review the on-going development activities and compile the issues and challenges and seek possible solutions to those issues and challenges. Each ward Chairperson was given the responsibility to organize such meetings but no meetings had taken place in any wards of the VDC.
The main reason for not taking meetings as decided was the issue of providing meeting allowances to ward members as the LSGA provides meeting allowance only to VDC board which consisted of VDC Chairperson, Vice-chairperson and ward Chairpersons. No meeting allowances were provided to the ward members. Because of this, they boycotted the meeting.
The practice of disbursing direct grants to VDCs from the central government via DDCs started when UML government came to power in 1993/94. Presently, central government provides each VDC, no matter whether small or big with very low local resource generating capacity or high, NRs1 million on equal footing.
When the grant from DDC was increased to NRs1 million from 2006/07, salaries of the VDC personnel were increased and provident funds provided for them. They were also made as permanent government employees. From that period, DDC started deducting a 10% of the grant amounts to cover the cost of the overseers reducing the already insufficient grants further. VDC has started providing NRs20,000.00 each per year for Dalits and IPs of the VDC only from this period.
The incumbent VDC secretary, Assistant, former secretaries and others have mentioned that there was no concrete basis to allocate the grants from DDC to VDCs. DDC provides the same blanket grants of NRs1 million to all the VDCs no matter whether they were big or small in size, developed or under-developed, rich or poor in terms of resources of the district without any justifications which were not practical and unfair. There were other rich VDCs in Morang which could generate an annual income of NRs2.5 million each internally but they also received the same amount of NRs1 million as grants from DDC.
231
Table 6.17: Incomes and Expenditures of Devbhumi VDC of Kavre District from FY 1998/99 to 2006/07 (Amount in '000s NR) FY FY FY FY FY FY FY FY FY Sources Particulars 1998/ 1999/ 2000/ 2001/ 2002/ 2003/ 2004/ 2005/ 2006/ 1999 2000 2001 2002 2003 2004 2005 2006 2007 Incomes Internal Land revenues, sales/proceeds, bank interest, recommendation fees, land 41 evaluation tax, sale of citizenship 38 33 28 26 32 27 35 34 (8 %) forms, earnings from telephone, and (8 %) (7 %) (5 %) (5 %) (6 %) (5 %) (7 %) (4 %) other internal sources. External Grants received from DDC29 485 485 485 485 485 485 485 485 970 (92%) (92%) (93%) (95%) (95%) (94%) (95%) (93%) (96%) Total 526 523 518 515 513 517 514 520 1,004 Expenditures Administration (personnel, stationery, donations, support to 226 223 218 215 213 217 214 220 404 disabled and sufferers from natural (43%) (43%) (42%) (42%) (42%) (42%) (42%) (42%) (40%) calamities and office related expenses)30 Development related activities31 300 300 300 300 300 300 300 300 600 (57%) (57 %) (56 %) (56 %) (56%) (56 %) (56 %) (56 %) (60 %) Total 526 523 518 515 513 517 514 520 1,004 Source: VDC Secretary, Assistant and others of Devbhumi VDC of Kavre District, August – December 2007
Table 6.17 gives a very discouraging picture of incomes and expenditures details of Devbhumi VDC of Kavre District from 1998/99 to 2006/07. As the data show, the average contribution from the internal resources such as house and land taxes, sales/proceeds, land evaluation taxes and recommendation fees generated from the VDC comes to be 6% and its average external sources has been 94% for the above fiscal year. In 1998/99 and 1999/2000, it generated the highest internal resources of 8% because of more land revenues and earnings from the use of the telephone service from VDC.
Regarding the expenditure of the VDC, it received a total budget of NRs4.85 million during the 1998/99 to 2006/07 from DDC as grants, out of which, it spent 42% in administrative expenses whereas remaining 58% was spent on development related activities on average. Since most of the positions of the elected VDC representatives were occupied by the local elites of high dominant groups, all the development plans and
29 DDC deducts 3% on grant it provides to VDC to cover the cost for DDC based technicians. Remaining funds are spent for development works (NRs0.30 million), administrative cost for VDC, support for disabled persons, donations and other emergencies. 30 It includes all expenditures related to salary for staffs, repair and maintenance of the VDC building, provident funds for staffs, TA/DA, cycle purchase, repair of bikes, allowances for VDC Ward Chairman, Vice-Chairperson and VDC Secretary, donations to needy people and contingencies. 31 It is used for very limited support in schools and education, health services, drinking water, gravelling the road, income generating training programmes and training. The actual demands for these developmental activities from the peoples are much higher than the allocated budget.
232 programmes of the VDC emanated from these people for themselves. They made the VDC plans and programmes, they implemented them and received all the benefits from them. Another way of implementing their plans and programmes is through the User Groups (UGs) as per the provisions made in LSGA which should be organized from among the beneficiaries of the said plans and programmes. Again these UGs were highly dominated by so-called high caste groups leaving poor and excluded groups out from getting due benefits from all these plans and programmes. Majority people of the VDC were from the indigenous Danuwar community who were totally deprived from all the benefits of the development plans and programmes of VDC. This VDC has not yet provided any specific funding support to Dalits, Janajatis and women of the VDC and also have no such plans in future.
Above table shows that the internal resources Box 6.3: Unheard Voices of a Poor generated from the Devbhumi VDC of Kavre Woman were extremely low. It simply has no means to A poor Danuwar woman of Devbhumi VDC of Kavre district has expressed her generate and mobilize its own internal grievances that she attempted to meet the resources even to meet the cost of its basic VDC secretary many times to inform that a drinking water tap should be installed in a utilities. It means, lower the internal resource localtion that was more convenient to all generation, the lower resources available of the villagers rather than to some individuals. Despite of her repeated development activities for the VDC. It was attempts, she couldn't contact him as he evident that the VDC officials need more resided in the district headquarters all the time and never came to the VDC. Nobody orientations and training as to how to mobilize paid any attention to her grievances. internal resources for VDCs. More than 90% of its resources come from DDC grants making them totally dependant on others.
Upon review of the above information of income and expenditure details of 2 VDCs of hilly (Devbhumi) and Tarai (Babiabirta) areas, the VDC of Tarai was better off than the hilly VDC in terms of generating the internal revenues. During a period of nine year (1998/99 to 2006/07), the Tarai VDC had generated 31% internal resources whereas the hilly VDC generated only a 6% of the same. The capacity to generate internal resources for Babiyabirta VDC of Morang District was higher than the Devbhumi VDC of Kavre district. One of the main reasons for this was that there were many sources such as Haat Bazar and land taxes in Morang district than Kavre district.
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However, the respondents of both VDCs have Box 6.4: Political Interference Prevailed said their VDCs could not mobilize more Everywhere internal resources because they have not been A former Chairperson of Devbhu Baluwa able to collect land revenues or taxes as VDC opinied that there was unnecessary political interference from the local level vigorously as possible which should have political party leaders and activists when the been one of the major sources of their VDC budget was increased. He complained that DDC deducted certain percentage of incomes as they were so weak institutionally, the budget earmarked for VDC without lacked required knowledge and skills, both consultation with them which was a bad practice. He strongly felt that all budget quality and quantity, lacked skilled human allocated for VDC should have come resources, lack of co-ordination and co- directly to the VDC. He also said that when there were no elected representatives to operation among concerned stakeholders, work in the VDC, it was difficult to carry out non-availability of the required data and so their roles and responsibilities due to the increase work load with no co-operation on. VDCs could not be developed as viable from the local political parties. units to undertake the village development initiatives as they lack all required institutional, organizational, human, financial, materials and technical capacities. They have just been passive receivers of grants from the DDCs and other sources without any efforts.
6.3.2.4 Views and voices from the grassroots peoples on Financial Resources of LBs, Partnership and Co-ordination among different Stakeholders to undertake Local Development Activities
Here different views and opinions of the respondents from Kavre and Morang districts are presented from the fields on Financial Resources of LBs, Co-ordination and Partnership among different Stakeholders towards achieving the overall goals and objectives of decentralization and local governance.
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Table 6.18: Views and Perceptions of the Respondents from Kavre and Morang Districts on Financial Resources of LBs S Total Views of respondents on financial resources of LBs No Types of respondents number of Very good Good Poor Very Have no respondents poor idea 1 Local Peoples 69 - 2 16 36 15 2 LB Officials and 26 - - 10 16 - Representatives 3 Officials of Government LAs 23 - - 8 15 - 4 Political Leaders/ Activists and 40 - - 12 26 2 Social Workers 5 Members of NGOs and CSOs 36 - - 12 24 - 6 Members of LB Associations 12 - - 2 10 - and Federations 7 Local Governance Experts and Central Government 56 - - 12 44 - Bureaucrats Total 262 - 2 72 171 17
Source: Field works in Kavre and Morang districts, August – December 2007and meetings and discussions with central level political and civil society leaders, INGOs, donor agencies and government bureaucrats, October 2007 – February 2008.
The views expressed by different respondents as listed above table 6.18 on the financial resources or bases of LBs also gives an extremely bleak situation. As per the views of the respondents, more than 65% (171 respondents) have said that the LBs financial resources were very poor whereas 28% (72 respondents) have said that it was poor. Only 0.76% (2 respondents) has said that LBs financial resources/bases were good.
Amongst many other things, major reasons given by the respondents to justify their responses were as follows: i) The LBs did not exactly know what were the needs and aspirations of the local peoples. As all the development plans, programmes and projects for local development have been imposed from the top, the LBs have never been accountable to the local people instead they were accountable to the central government. Because of this, LBs have never bothered to be financially dependent and self- reliant as they received funds from the centre without any efforts. ii) The LBs have not been able to function as autonomous and independent bodies when there were inadequate financial bases. iii) In Nepal, central government, district based government LAs and LBs have paid no attention to the financial decentralization. As a result, decentralized local governance failed to make any headway because nobody from the local to national levels has been serious to consolidate the resource/economic bases of the LBs.
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iv) The LBs lacked the required skills and knowledge for financial resource generation, mobilization and their overall management. v) There are altogether 4,046 LBs (3,913 VDCs, 58 Municipalities and 75 districts) as per the existing structure of the state. Because of this huge number of LBs, a large portion of already scarced resources was spent to run and manage these LBs which contributed to make LBs financial resources even weaker. vi) In Nepal, there has always been a huge gap between promulgation of different Acts
and Regulations and their actual Box 6.5: Huge Gaps Persist Between implementation. In case of LBs providing Act Promulgation and Implementation
with power and authority for internal A former DDC member of Morang district resource generation and mobilization, feels that the LSGA was good only in paper but has never implemented as per very little has been mentioned in these its words and spirit. As a result the local goods and service delivery to the local acts and regulations and nothing has been people have not improved at all. The rural implemented at the local level. peoples and even the local political party leaders do not know exactly what it was vii) The central authority has never been all about. He strongly feels that the serious to develop the LBs, which was the present political vacuum as well as running LBs by government employees basis of any democratic system, as viable has added only more salt to the curry. units or centers of growth and development for the local development. As a result there has been a very low level of internal resource generation and budget allocation from the national treasury. LBs have not given any authorities to adjust resource allocations because most of their funding came from the centre in the form of grants. viii) The central government has no faith in LBs and their decision-making capacity but on the other hand, LBs believed that capacities in terms of their human resources, physical, technologies and financial resources could be built only when they were given with a fully autonomy and power to run and manage their entire business. The respondents were of the view that decentralization efforts have failed because of the command system of the central government and economic fragility of the LBs. LBs autonomy was not possible without consolidation of their financial base with a wider tax system and revenue sharing of incomes from the local resources, and; ix) Respondents expressed that the government LAs or subject-wise sections never followed the budget and periodic plans prepared by DDCs. Within LB structure, it was mentioned that the DDCs thought themselves as superior and hence they always tried to impose their decisions to lower tier of LBs such as municipalities and VDCs.
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Table 6.19: Views and Perceptions of the Respondents from Kavre and Morang Districts on Empowerment of LBs and Local Peoples to undertake Local Development Activities Views of respondents on empowering LBs and Total local people to undertake the local development S No Types of respondents number of activities respondents Very Very Have no good Good Poor poor idea 1 Local Peoples 69 - 3 22 37 7 2 LB Officials and 26 - 5 9 12 - Representatives 3 Officials of 23 - 6 7 10 - Government LAs 4 Political Leaders/ Activists and Social 40 - 6 15 17 2 Workers 5 Members of NGOs and 36 - 2 16 18 - CSOs 6 Members of LB Associations and 12 - - 4 8 - Federations 7 Local Governance Experts and Central 56 - 2 20 34 - Government Bureaucrats Total 262 - 24 93 136 9 Source: Field works in Kavre and Morang districts, August - December 2007 and meetings and discussions with central level political and civil society leaders, INGOs, donor agencies and government bureaucrats, October 2007 – February 2008
Table 6.19 reveals that more than 52% (136 respondents) expressed that the existing capacity of LBs, government LAs, NGOs and CSOs for empowering the local poor and undertaking local development initiatives was very poor but 35% (93 respondents) said that it was poor. Most of the respondents were of the view that they were totally unable to empower the rural poor and excluded peoples by undertaking local development activities.
Major reasons cited by the respondents to justify their responses were as follows:
i) The central government, LBs, district based government LAs, NGOs and CSOs did not exactly know what the capacity building was all about.
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ii) Nobody has paid any due attention for undertaking the need analysis of the training and development of LBs, government LAs, NGOs and CSOs so as to build their capacity. iii) The support from the donor agencies, I/NGOs and other development agencies drastically reduced because of the prevailing worse security and political situation. Very few such programmes were being run which had begun when the LB representatives were in place and no new programmes have been initiated thereafter. iv) Everything related to the capacity development of LBs and government LAs could not move ahead as the government employees could not take prompt and effective decisions as they were responsible and accountable to the power centers and to their respective ministries of the government not to the peoples they should serve. v) Extremely low capacity building programmes were initiated after the expiry of the terms of the LB representatives and they were highly concentrated to the district headquarters only due to the poor security situation. vi) Government owned training centers such as LDTA for LBs could not function as desired nor had no jobs to do with Box 6.6: Nepal Lacks Visionary Leaders for the LBs in partnership. As a result, the Development of the LBs the resources (both human and A government official of Morang DDC mentioned financial) they had in their that after the promulgation and implementation possessions could not utilize at all. of LSGA, they expected a lot from it to empower the local people and LBs by devolving vii) There was a direct and active authorities related to agriculture, education and involvement of the MoLD officials health sectors to DDC. But contracdictory to instead of the professional what he thought, it couldn't deliver anything as organizations or institutions in expected because the LBs have been without providing training or capacity elected representatives for a long time which he thought was very unfortunate for the entire development activities of LBs as process of decentralized local governance of the the VDC secretaries, LDOs and country. According to him, it was mainly because Executive Officers deputed to LBs there were no visionary political leaders who were responsible to their bosses at could think for the development of the country the ministries and departments not rather than their petty party interests. to the peoples they should provide goods and services. viii) Whatever ground works were created particularly after the 1990 political change by the successive governments, donor agencies, I/NGOs and development agencies for
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the capacity building of LBs and government LAs were totally dismantled during the insurgency period. ix) When the elected LB representatives were in place, a level of mutual trust, to some extent, in decision-making process, involvement of local peoples in planning, implementation, monitoring and evaluation of local level programmes and projects including the capacity development of LBs were there. All these could not continue when LBs were without the elected representatives. x) The process of establishing internal audit sections within LBs came to a halt and the position of inter and intra department co-operation were also extremely week. xi) The easy access of the elected LB representatives to the ministries and departments of the government upon the expiry of their terms in July 2002 was also cut off and the entire process of capacity building and local development initiatives came to standstill. xii) The tendency of the MoLD, which has been a focal ministry responsible for the effective co-ordination and co-operation on matters related to the decentralized local governance, has been that it always treated LBs as their extended branches not as local autonomous bodies. This has been a major hurdle for the capacity development of LBs.
Box 6.7: Power Hungry Political Party Leaders and Central Bureaucracy
A local level political leader of Morang district has expressed his bitterness that the top political party leaders and central bureaucracy of Nepal are hungry for power and authority all the time. He said that the rulers of the country have never been serious to devolve power to the LBs and other local stakeholders and instead they always treated LBs as their extended arms but never thought of making them as local autonomous dodies. According to him, they interpreted and used the terms like 'local autonomous' and 'local self-governance' confusingly to replace one by other and vice-versa so that people are confused and they can enjoy power and authority all the time. He was of the view that these give two different meanings. Local autonomy means it gives more prerogative rights, powers and authority to peoples legally which can not be snatched away by the centre if they wish to do so whereas 'self-governance' means it gives very little rights, powers and authority to the peoples. It gives very little rights and powers like administrative de- concentration or delegation of powers without any legal authority like the approach followed by the Panchayat system in the name of empowering the people which largely depended on the discretion of the central authority. Since Nepal is a multi-lingual, multi-ethnic and multi-religious, the approach of 'local self-governance' can not simply address the issues of the diverse socio- cultural groups. He said, if the state authority is dead serious for giving real rights and powers to the poor and excluded groups, 'local autonomous' should be given which can solve all the issues of the excluded groups including their linguistic, ethnic, regional, issues related to the control over and access to the natural resources which is not possible through 'local self- governance'. xiii) In matters related to the strengthening of LBs, many donor agencies and INGOs perceived that many ministries have not accepted the LSGA as a main document
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towards implementing and achieving the decentralization schemes in the country. It was a bitter reality that other government ministries and departments viewed LSGA as the only document of the MoLD, not theirs. xiv) There were many NGOs, CBOs and CSOs in both districts and VDCs implementing different local development activities including the empowerment programmes for the local people with tremendous expertise in providing capacity building training and facilitation skills but they never had a good working relationship with the LBs. LBs and government LAs have always been treated them as competitors but never as development partners. Had the LBs, government LAs, NGOs, CBOs and CSOs worked together in partnership for local capacity development, they could be a reliable source of trained and experienced personnel, and; xv) Development and management of systems, human, financial resources, infrastructures and other materials were very important aspects for the capacity development. Nobody paid due attention on these important aspects and the central government have never co-ordinated them. The situation became worst when the terms of the locally elected representatives expired. LBs become like the entities without any live blood when they were without elected representatives.
From the field study and interactions as illustrated above with a wide range of local people, LBs officials and representatives, government LAs, social workers, village/district/central level political leaders/activists, NGOs and CSOs of both VDCs and districts, views of LB associations and federations, local governance experts and central government bureaucrats, it can be concluded that LBs, government LAs, NGOs and CSOs have had very little or no required capacity to implement the provisions made in different acts and rules. They could not function as viable units for decentralized local governance as desired and whatever was there, these were totally dismantled and became extremely weak without the elected representatives.
Box 6.8: Mockery of the Principle of Decentralization and Local Governance A Kavre district based political leader opinied that the LBs have been devoid of the elected representatives from July 2002. Since then, LBs are being managed either by persons handpicked by the political party leaders or the government employees although they do not have any executive power and authority. They are not locally accountable and even their upward accountability in Kathmandu is limited on account of weaknesses at the central level. This gap in managing the LBs has adversely affected the entire planning process of the LBs as well as the spirit of LSGA, decentralization and local governance. Most of the LBs have adopted the plans without following participatory processes, hence the contravention of the principles of decentralized local governance which demands that the local level initiatives are identified, planned and implemented by and with the local people. Even though, attempts have been made by the government to fill up the gaps at the local level by forming advisory bodies comprising of members of the ruling seven parties, it has not served the purpose as intended by the LSGA and decentralization.
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Table 6.20: Views and Perceptions of Respondents from Kavre and Morang Districts on Partnership among different Stakeholders Total Views of respondents on Partnership among S No Types of respondents number of different Stakeholders respondent Very Good Poor Very Have no s good poor idea 1 Local Peoples 69 - 3 13 38 15 2 LB Officials and 26 - 2 10 14 - Representatives 3 Officials of Government 23 - 3 7 13 - LAs 4 Political Leaders/ Activists 40 - 2 11 24 3 and Social Workers 5 Members of NGOs and 36 - - 16 20 - CSOs 6 Members of LB Associa- 12 - - 3 9 - tions and Federations 7 Local Governance Experts and Central Government 56 - - 18 38 - Bureaucrats Total 262 - 10 78 156 18 Source: Field works in Kavre and Morang districts, August – December 2007 and meetings and discussions with central level political and civil society leaders, INGOs, donor agencies and government bureaucrats, October 2007 – February 2008
The views expressed by different respondents as listed in above table 6.20 on the partnership among central government, government LAs, LBs, NGOs and CSOs for empowering the local poor and to undertaken local development initiatives did not give us an encouraging picture either. As stated above, more than 60% (156 respondents) have said that the existing status of partnership among different stakeholders was very poor whereas 30% (78 respondents) have said that it was poor.
Major reasons given during the field visits by the respondents to justify their responses were as follows: i) According to the respondents, the major bottle necks seen for promoting the partnership were the inadequacies in strategy, policy formulation and the legal bases. There was a lack of simple and transparent working procedures of central government, government LAs, LBs, NGOs, CSOs, private sector and political parties, they argued. ii) There were unclear jurisdictions between the central and local level authorities on partnership that have been creating ways in duplication of their roles and responsibilities.
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iii) There was a lack of awareness, information sharing and dissemination among the central government, government LAs, LBs, NGOs, CSOs, private sector on partnership. iv) There was no competitive environment and whatsoever for investment and service delivery at both central and local level. The central government has failed to put such strategies, plans, policies, information and technology in place that would promote the partnership mode of functioning amongst different stakeholders. v) It was expressed that no due attention is paid for the protection and promotion of innovative ideas and investment from the central government authorities. vi) Still, there was an existence of old economic and administrative rules, acts, systems, mechanisms and complexities in working procedures and styles in promoting the public-private partnership. The slogan of public-private partnership (PPP) has remained only in documents and nothing has happened from local to national levels in this respect. vii) The periodic plans made by LBs have never given due attention to the public- partnership approach for local development initiatives and there lacks a total confidence among different stakeholders on partnership from the local to national levels. LBs haven't owned all these plans and programmes that would advocate and promote the partnership approach. viii) The respondents were of the view that still there was a lot to do in developing the technically sound human resources and institutional capabilities development for partnership. So far the LBs have not been able to work together for achieving common development goals and benefits generated from it. ix) The central government, government LAs, LBs, NGOs, CSOs and private sector haven't understood what the partnership was all about. All of them lack required skills and knowledge about it and they all were unorganized without any information and knowledge sharing having no feeling of corporate social responsibilities. All these have created hurdles and problems rather than solutions for sensible investment and service delivery. x) The term 'partnership' was new to the central government, government LAs, LBs, NGOs, CSOs and private sector and it took long time to internalize the modern concept of it and so far no serious attempts have been made towards this by the central government and all other concerned actors. xi) Another problem that Nepal was facing in terms of partnership as per the respondents were the duplications in the functioning of I/NGOs, LBs and government LAs at all levels and also they lack the co-ordination amongst them.
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xii) They believe that LBs, NGOs, CSOs and private sector have not been fully developed and thus have difficulty in working in partnership. Because of this, they were unable to challenge the centralized system of governance, alienation and exploitation of the poor and excluded by the liberal market economy and globalization. xiii) Despite the importance of the LBs, NGOs, CSOs and private sector in decentralized local governance laid down by the LSGA, no partnership has been developed to materialize the spirit of decentralization schemes. The government hasn't made policies and positive environment to attract the national and international investment and donor agencies need to facilitate the process, and; xiv) Last but not the least, decentralization schemes in seeking partnership among the different stakeholders at different levels was still in an infant stage in Nepal. LBs did not have sufficient infrastructures in terms of much needed human resources and physical equipment. Partnership would be worth only when there was a sense of togetherness among the different stakeholders in action resulted from the mutual trust, solidarity and support amongst them.
Table 6.21: Views and perceptions of the Respondents from Kavre and Morang Districts on Co-ordination among different Stakeholders
Total Views of respondents on Co-ordination among S No Types of respondents number of different Stakeholders respondents Very Good Poor Very Have good poor no idea 1 Local Peoples 69 - 2 12 38 17 2 LB Officials and 26 - 3 9 15 - Representatives 3 Officials of Government LAs 23 - 5 6 10 - 4 Political Leaders/ Activists 40 - 4 15 18 3 and Social Workers 5 Members of NGOs and CSOs 36 - - 16 21 - 6 Members of LB Associations 12 - - 2 10 - and Federations 7 Local Governance Experts and Central Government 56 - - 20 36 - Bureaucrats Total 262 - 14 80 148 20 Source: Field works in Kavre and Morang districts, August – December 2007 and meetings and discussions with central level political and civil society leaders, INGOs, donor agencies and government bureaucrats, October 2007 – February 2008
The views expressed by different respondents as illustrated in Table 6.21 on the existing situation of co-ordination and co-operation among central government, LBs, government LAs, NGOs and CSOs for empowering local poor and undertaking local development
243 initiatives also given us a discouraging ground reality. According to their views and perceptions shared, more than 56% (148 respondents) have said that the existing status of co-ordination and co-operation among different stakeholders was very poor whereas 31% (80 respondents) have said that it was poor.
Major reasons expressed by the respondents to justify their responses were as follows:
i) There was no practice of co-ordination and co-operation among different governmental and non-governmental institutions from central to grassroots levels. There was a lack of segregation of roles and responsibilities, unclear sources of incomes/resources and arrangement of human resources amongst them. The government's LAs were busy all the time to plan, implement and prepare progress reports of their targeted programmes. They were totally responsible and accountable to their departments and ministries but not to the DDCs as envisaged in LSGA. ii) The main objectives of the central, government LAs and LBs were to provide basic services to the people easily in a cost effective manner. All of them should work together in co-ordination and should co-operate with each other for achieving the common goals of serving the people. But in practice, the centre has failed to work as a facilitator, co-ordinate and monitor the performance of LBs. Similarly, the centre have had no fiscal relationship with the LBs for promoting co-ordination and co-operation between them. iii) The LB associations and federations were not consulted and represented in LB related policy and decision making processes of the government. Whatever the government did on this, most of them have taken place on an 'ad hoc' basis and that too in response to the pressure exerted by them to do so. There were no institutionalized and compulsory co-ordination mechanisms established by the government for better co-ordination and co-operation. The information dissemination and sharing among LBs and central government on decentralized local governance were extremely rare. iv) The local development plans, priorities, programmes and projects designed and prepared by LBs were altered at the centre without discussions and consultations with the LBs during the planning processes. v) The central government managed plans, programmes and projects for the LBs through the government LAs without consulting the LBs elected representatives. NPC and sectoral ministries in Kathmandu should have provided the overall co- ordination for local development but it did not happen in practice. The participatory
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planning process should be in place for many districts but the local planning and national planning were un-coordinated with practices of non-transparent, centralized top-down commands creating local alienation and frustration. Also, the district level government LAs always wanted to avoid the LBs in any development plans, projects or programmes and they tended to ignore the periodic plans prepared by the LBs. vi) There was no clear allocation of co-ordination roles and responsibilities as well as the ownership for the decentralization processes within the central government. All the top political leaders, central level bureaucrats, government ministries and their line agencies were not serious to provide autonomy and the rights to self- determination to the LBs. vii) It was discouraging that the central government lacked clear guidelines on co- ordination with the LBs to implement the plans and programmes on decentralized local governance. The central government was unable to co-ordinate, monitor and embrace these programme activities bringing all the stakeholders together to achieve the common goal of decentralized reform. Because of this, there has been a thin spread of different programmes related to the decentralized local governance. Because of this, there were many instances of duplication and overlapping of programme implementation from central to local levels. viii) There was no specific central government agency to look after the decentralization and governance sector for effective co-ordination with other government ministries, departments and LBs, there were clear mis-match between donors and INGOs objectives and programmes with government’s policies and strategies on decentralized local governance. ix) After the promulgation and enactment of LSGA, the relationship between LBs and local government LAs has not been cordial and helpful which has been strained by the fact that most funds for the local development has been channeled through the district level government LAs without any co-ordination with the LBs. In every policy and legal documents, government have time and again emphasized the involvement and participation of NGOs, CSOs and private sector, but in practice nothing has happened at the all levels. x) There was no horizontal linkage between LBs and LAs working in the same districts. They treated and behaved with each other as rivals not as partners for initiating the local development activities.
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xi) Meaningful participation and involvement of LBs and government LAs in the process of information sharing, dissemination and publication were lacking at the local level. xii) Since there was no co-ordination between LBs and LAs, they did not exactly know or have no records of different organizations and agencies such as NGOs, CBOs, donor agencies and INGOs working in different sectors of the same district. There were also duplications of the works between LBs and LAs as the central government always wanted to spend the sectoral budget through their LAs as per their system of budgetary management not through LBs. xiii) In all legal documents of the government including the LSGA, a Box 6.9: Co-operation and Partnership from Top to Grassroots Level - Mere strong emphasis was given for the Slogans participatory planning in consultation An NGO activist of Morang district expressed with district level NGOs and CSOs but that there exist no co-ordination and co- these were non-existent in practice. operation among LBs, government LAs and xiv) The existing planning, implementation NGOs. They do not simply trust and believe each others in practice whatever is said in and monitoring system of the central theory. When they approached to DDC and government, government LAs, LBs, Municipality for possible funding support so as to work together in partnership, the NGOs and CSOs for the local authorities are hesitant to provide relevant development were very faulty, as a information. He thinks that informal channels and connections work better than the formal result there was no effective co- ones. All these have discouraged them to ordination and co-operation among work in co-ordination and partnership with LBs. them. xv) There was no co-ordination at all among LBs, NGOs and CSOs at the local level. All of them worked in isolation and on the whole individual interests came first rather than the collective interests.
All the analysis above at both macro and micro-level data and information, the centralized state institutions have failed to govern the diverse socio-cultural groups.
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CHAPTER SEVEN
MAJOR FINDINGS AND CONCLUSIONS
This study has been concentrated to analyze and review the whole decentralization process taken so far at both central (macro) and local (micro) level in order to empower the poor and marginalized sections of society. It has also attempted to have a review the policies, legal, institutional, fiscal and operational frameworks promulgated and enacted so far from the perspective of decentralization and local governance for devolving the authorities and responsibilities to LBs, NGOs and CSOs, analyze the existing situation of capacity and resource base of the LBs including the co-ordination and partnership among central government, government LAs, LBs, NGOs and CSOs at the district and VDC levels chosen for the study, examine the roles of different stakeholders critically for the implementation of the decentralized local governance and to review the existing state structures and analyze whether they are suitable to govern and empower the diverse socio-cultural and linguistic groups of Nepal.
This concluding chapter thus highlights the summary and conclusions based on the major findings of the study. It is hoped that the key issues and conclusions drawn hereby would generate further discussions on nation-state, political and fiscal decentralization, local governance and re-structuring of the present state to ensure right to self-development for the poor and excluded people with identity and inclusive political structure. This would accommodate the socio-cultural diversity and bring the government and development closer to the people, which would reduce the central control and hegemony.
7.1 Major Findings
Over the past few decades, decentralization has become one of the most contested policy discourses throughout both developing and developed countries around the world and Nepal is no exception to these global changes.
Nepal has a long history and experience of adopting different forms of power decentralization, particularly the administrative type of de-concentration and delegation, in the name of devolving power and authority to the lower units of government from the Rana era to a democratically elected Prime Minister Sher Bahadur era by promulgating the so-called most revolutionary and ground breaking legal act popularized as LSGA. It has already been about nine years since LSGA begun its implementation making almost
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90 years of history of implementing the decentralization schemes of one sort or others in Nepal.
Accordingly, many policies, acts and other legal instruments were promulgated and enacted in the name of decentralizing roles and responsibilities to LBs and as advocated by many, the LSGA was considered as one of the major acts towards that direction. Moreover, successive governments formed many committees and advisory bodies in different periods to implement the decentralization schemes but suggestions and recommendations made by such commissions and bodies were never implemented seriously. On the other hand, they have never been serious to take the risk for radical changes through the decentralization schemes, they always preferred existing status quo as whatever has been going on all these have given them more power, status, authority, access to and control over the state resources and facilities. National level data on peoples participation in each state and non-state institutions such as judiciary, legislature, parliament, constitutional bodies, public administration, political parties, LBs, professional and scientific organizations, civil society, academic and cultural organizations shows that there is a high domination of Brahmin, Chhettri and Newar groups in all these organizations and institutions. Similarly, the same groups have monopoly in LBs, local level political parties, locally elected different groups and committees.
All the legal instruments should have been promulgated and enacted with the direct involvement of the people so that they can take their ownership. But in Nepal, the practice of promulgating such instruments was done in order to consolidate the centralized system of governance, to strengthen the power base of the elites and male dominant groups of the society and the LSGA had also met with the same fate of promulgating with a massive external pressure and support without Nepalese peoples' involvement. Still there are overlapping of jurisdictions of central and LBs as their respective responsibilities and accountabilities are not clearly been defined. The legal framework and the practice contain many examples of shared and overlapping responsibilities, leading to a situation where everybody can blame another authority for not implementing the particular task. The general people have thus been unable to get the services as mentioned in the Constitutional and legal instruments including the LSGA. The leaders of the political parties and whole central bureaucracy have so far failed to pay due attention to implement them and live upto the peoples' expectation.
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Information from the field study have supported that the LBs have not been able to take the ownership of the devolved roles and responsibilities in agriculture, education, health and other sectors. Many inherent problems on policy, procedures as well as institutional capacity were seen. The key problems were lack of strategies, vision and specific plans as well as the political and financial commitment of the central government. There were prevalence of heavily authoritarian and over-centralized decision-making process, no fiscal autonomy was given to LBs to raised required funds locally for public expenditures making them to rely heavily to the central government for funds, lack of capacity and means for the LBs and communities, no transparent and accountable working system, unclear roles of LBs federation and associations, ministries, departments and other offices.
The LBs have given the legal power to implement the devolved functions but in practice, LBs have not been able to implement such activities freely because of too much interference of the political parties, very less budget allocated and LBs with lack of technical expertise and skilled human resources. The centre has never felt that the LBs were the units of local government that did not belong to a particular ministry or a department but were independent units managed by the people's representatives elected by the sovereign people.
Although the LSGA has provisions to integrate some of the government LAs under the umbrella of DDCs and devolving service delivery functions to the people but it has not taken place in practice. Moreover, top political leaders and bureaucrats at the centre always perceived that the LBs do not have the required capacity to undertake the devolved functions. Hence, they think that there is no point in devolving roles and responsibilities to them. However, the LBs, associations and federations of LBs, experts on LBs and decentralization think that until and unless the whole devolution packages with administrative, political, market and fiscal powers were devolved to LBs, their capacity could not be developed. Thus, there is a need to first devolve the whole functions to LBs and they would learn, develop and ultimately manage the devolved functions without any failure.
Field information from Kavre and Morang districts suggests that the overall impact of the sectoral devolution in agriculture, education and health sectors have not been encouraging. The sectoral devolution in different sectors could not involve the grassroots people directly in decision-making process and they failed to get the benefits directly from these sectors. There were also many inconsistencies and contradictions among the
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LSGA, other acts and national guidelines provide by the MoAC, MoES and MoH. The sectoral devolution process was carried out rather in a confused and haphazard manner without following due processes of people involvement. Almost all the district-based stakeholders were confused as to how to work together to materialize the implementation of the provisions made in LSGA in these sectors. There were no co-ordination and monitoring mechanisms developed among DDCs, government LAs and other actors implement the activities related to the sectoral devolution.
Sharing and interaction meetings with the local level representatives of LBs, government LAs, NGOs and CSOs reinforced that there existed no co-ordination and partnership among them to work together at the local level in these sectors. Each one of them treated each others as competitors rather than partners and co-workers. There were inadequate efforts and mechanisms to monitor and control the functioning of the government LAs and LBs. Although, many co-ordination committees and sub-committees have been formed, they could not even organize a single consultation meeting. On the other hand, the NGOs, CBOs and CSOs were also extremely weak institutionally, the citizens were generally unorganized and in a weak position to exert pressure on the LBs and the central government agencies were not able to guide and coach the LBs adequately for effective sectoral devolution.
The government had also started channeling the funds directly to the locally elected community groups who were given authority to manage key aspects of their own forest, education and health services. However, it was revealed from the micro level study that these groups were highly dominated by the local privileged caste groups taking all the benefits in the name of the poor and excluded groups. These local groups also blurred the accountability linkage between the efficient use of the public funds for local service delivery and the ability to stay in office, functions that the LBs should eventually provide.
In terms of required capacities such as organizational, human and financial resources of LBs for undertaking different roles and responsibilities of local development, the central government agencies have been using top-down planning, implementation and budgeting of plans and programmes. They always feared that transfer of these might reduce their influence, power, prestige and budget as well. Because of this narrow mindedness, LBs did not have much experience in managing their own affairs. Very weak capacity of LBs, centralized mindset of political leaders and top bureaucrats, weak internal democracy within the political parties and their leaders, growing conflicts and absence of elected
250 representatives of LBs have constrained LBs ability to sustain their power and authority provided so far by policy, institutional and legal instruments.
Moreover, the capacity building programmes for LBs were not linked to the national programmes of decentralization with the transfer of power, authority, functions and resources to LBs. The poor people including the LB associations and federations have not involved in capacity development plan formulation, implementation and monitoring processes throughout. There lacked a strong determination and willingness from the entire bureaucracy and political party leaders for the empowerment of the LBs, NGOs and CBOs through their capacity and human resources development initiatives.
Field respondents and experts on decentralization and local governance in Kathmandu have said that so far, even after the enactment of LSGA, the political and fiscal devolution of power and authority have not taken to the grassroots level. The tendency of keeping these to themselves at the centre is continued even today. Fiscal decentralization has simply been a political rhetoric to fool the common peoples. Despite of many years' initiations, still LBs have not been able to generate internal resources needed to perform the devolved functions on their own as their revenue base is very narrow and insufficient. A clear dispute between government LAs and LBs is seen about utilizing the available resources at the local level. The VDCs, Municipalities and DDCs were always dependent on central resources and grants and no due attention was paid for implementation of fiscal decentralization. Also the government decision-making and public resource allocation even after 1990 remained largely the same to preserve the same high caste male groups who ruled the country under the feudal Panchayat regime. As a result the mechanism to provide the grants to LBs from the centre was inconsistent and non-transparent. Almost all the scarce budget and available resources were used for staff salary administrative and other unproductive expenses and as a result very less budget remained for the developmental activities.
According to the field data on incomes and expenditures of LBs of study districts, the LBs were largely dependent on the external resources or funding support from the centre. As a result, LBs perform only routine works of inconsequential nature. Although the LSGA envisaged the participation of private sector in the task of providing basis services for sustainable development, this study could not see such examples of participation. That was why the LBs did not exactly know what the needs and desires of the peoples were. Like in Panchayat times, the centre of the present 'democratic system' also provided grants and imposed top-down development plans, programmes and projects making LBs
251 unaccountable to the local people who elected them but instead LBs were made accountable to the central government and were less likely to be careful with their expenditures. From this, one can conclude that the LBs were not able to extend its services and mobilizing the internal resources.
According to the views expressed by the local peoples, LB and government LA officials, political leaders, representatives of NGOs and CSOs, members of LB Associations and Federations and local governance experts, there were very weak partnership and co- ordination mechanisms amongst different stakeholders. There was a lack of strategic thinking as well as no clarity about the roles and responsibilities among central government, LBs, NGOs and CSOs. The lack of clarity was impeding the development of a mutually co-ordinated and co-operative environment of defining their inter-relationship for promoting decentralized local governance and empowerment. Poor co-ordination and consultations among levels of governments, NGOs and CSOs in the service provisions and administration thereof and lack of a forum for co-operation and clearance of disputes were seen at all levels.
From Nepal's long experiments with the decentralization schemes, the political structure of the country has not been suitable for implementing decentralization schemes. At the top level, the activities related to the decentralization of the sectoral ministries, NPC and donor agencies haven't been co-ordinated and communicated effectively. There was a general feeling that the MoLD co-ordinates the decentralization activities and manages the LBs and it acts as a focal ministry for decentralization but there was no effective co- ordination among ministries, government departments and LBs. The key problem was that other ministries think that the decentralization is only the subject of MoLD only which was ill conceived. They strongly felt that if the subject of decentralization and local governance was placed under the powerful body as a separate entity rather than under the MoLD, it would have yielded better results, effective implementation and better co-ordination for decentralized local governance.
There were far too many units of LBs as per the existing structure of the state. The total number of LBs particularly the VDCs was far too many. They were institutionally and financially extremely weak to run and manage the local development activities. They needed more administrative cost and as a result very less funds were available for the development activities of rural parts of the country. The potential of collecting taxes and revenues for LBs was limited because of the poor economic and narrow physical areas.
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We have seen that many government and non-government actors including donor agencies and INGOs have been working in Nepal to implement the decentralization schemes since a long time ago. Most of donors’ supports are being managed by INGOs and NGOs focusing at the local level but on the contrary the central government plans and programmes have been channeled through their LAs not via LBs. Also donors and INGOs have been providing supports for petty activities which should have done by the government itself through their own internal resources. It indicates that how badly the Nepal government has become dependent on others. Also judging from the past experience, one can say that most of the supports from donor agencies and INGOs could not even touch a large chunk of the poor and excluded groups.
Lack of co-ordination among the central government ministries, NPC, donors and INGOs working in the field of decentralized local governance is highly prevalent affecting the efficacy of the local development activities. Nepal adopted and operationalized a mere administrative decentralization model for many years. An institutional set up was accordingly created to support this model on a vertical-control basis with strong top- down approach and practices. A centralized planning and budgetary practice still existed in the form of LAs which followed the blueprint approach and set objectives, targets and budget from the central government. All the development policies, plans and activities were vertically integrated and horizontally uncoordinated. Similarly at the district level, there was a lack of required co-ordination and partnership mechanisms among donors, INGOs, government LAs, LBs and the third sector.
Practitioners' of decentralization and local governance strongly argued that Nepal's political parties, which are considered as main change agents, and whole bureaucratic systems have also failed miserably to exercise the constitutional, legal, institutional, fiscal and operational frameworks with regard to the effective functioning of fully decentralized and inclusive state institutions. So far, every government formed have had practiced only cosmetic reforms and defended the centralized state structure. It has felt everywhere that the decentralization has failed to reflect in the life style of every citizen from the centre to the grassroots level.
The overall impacts of all these patchy works on decentralization and local governance of the past have been chronically ineffective which had been adequately reflected in the dramas displayed so far in decentralization process for more than four decades. All such initiatives have maintained a strong control of the political parties leaders controlled by male elite groups and top bureaucrats within themselves instead of promoting
253 decentralization of power and authority to the poor and excluded groups. We can not reverse the past, we can only learn from it.
7.2 Conclusions
After having analyzed and reviewed the whole decentralization processes taken place so far at both macro and micro levels by considering the past Constitutional and legal instruments, policy, institutional and operational frameworks including different roles played by many stakeholders for this, it is hereby concluded that the entire decentralization scheme has been a failed case in Nepal. Nepal has wasted considerable time and massive resources in the name of implementing decentralization schemes since a long time back. Different policies, legal, institutional, financial and operational instruments relating to decentralization were promulgated and enacted without enabling the governments to address the core issues of socio-economic, cultural and political exclusion and deprivation of the people. Nepal's political parties and their leaders, the main change agents, and whole bureaucratic system have also failed miserably to exercise these instruments with regard to the effective functioning of fully decentralized and inclusive state institutions.
So far in Nepal, central level political parties, ministries and the whole bureaucratic systems considered themselves as givers of powers and authorities through de- concentration and delegation and LBs and other actors were considered as passive takers who have no voices, resources and authority. Only some cosmetic works on decentralization have been carried out to show to the donors and others that they have been serious to devolve the powers and authorities to LBs and other actors in Nepal. So far, the LBs, NGOs, CBOs and private sector have not responded anything positive to the initiations undertaken by the central authority as they closed doors for these important actors.
This means, the centralized state institutions have not been able to govern the diverse socio-cultural groups, local development activities could not be successful and sustained without meaningful and effective participation of these poor and socially excluded groups in decentralized local governance, overall goals of decentralization and inclusive governance could not be achieved without a full autonomy to LBs to exercise the political, administrative, market and fiscal powers and authority.
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All these have proved that whatever efforts were made by the state governments in the name of 'decentralization and local governance' to empower the poor and excluded groups till now in Nepal, they were mere convoluted ideas with full of rhetorics. To reinforce these, some of the conclusions emanated from the study on the specific frameworks are given below:
7.2.1 Policy and Legal Frameworks for Decentralized Local Governance
Constitutions, policies, acts and other legal instruments have been promulgated and implemented for devolution of power and authority from the centre to the lower units of government in the country. Different governments formed, however, were never serious to implement these policy and legal instruments for radical changes to empower the poor and marginalized people. They preferred to maintain the ad-hocism and existing status quo as whatever has been going on, all these offered them more power, status, authority, access to and control over the state resources, facilities and opportunities.
It has already been about nine years since LSGA begun its implementation and so far no desired impacts in empowering LBs and local peoples are seen. Even the popularly elected governments could not initiate the decentralized political and administrative process to enable various deserving regions and areas to move ahead as self-sustaining development units. The net result was the development of a culture of shifting the responsibility to others, opportunity grabbing and negativity in overall political climate. The power holder elite groups at the centre used the 'divide and rule' approach through the mechanism of favoritism and nepotism in distributing the state resources leaving the poor and excluded groups in misery and despair all the time.
Lack of co-operation and co-ordination between the LBs and district based government LAs is also affecting the efficiency of local development. This is particularly so due to the fuzzy type of relationship existing between the central level and local level institutions. After several years of efforts to implement the decentralized local governance, there are still confusions as to which government departments or LAs or LBs is responsible to provide what public services to the local people. Still there are overlapping of jurisdictions of central and LBs as their respective responsibilities and accountabilities have not clearly been defined. The peoples have been unable to get the services as mentioned in the policy and legal instruments including the LSGA.
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Until now the state has defended the centralized state structure. It has felt everywhere that the decentralization has failed to reflect in the life style of every citizen from the centre to the grassroots level and there is a total lack of political will and commitment from both the political party leaders and entire bureaucracy.
The resultant impacts of all the patch-works explained above have maintained a strong control and hegemony of the political party leaders highly dominated and controlled by elite groups and top bureaucrats within themselves instead of promoting decentralization of power and authority to the poor and excluded groups living in rural areas. This section as a whole suggests that policy and legal frameworks have remained only in rhetoric than in practice in the context of decentralized local governance.
7.2.2 Policy Framework for Sectoral Devolution
The entire process of sectoral devolution should have been natural and automatic rather than imposed one from the top. It should not have been a mere handing over the physical aspects but the entire LBs and all the key actors should have been ready and capable to accept the entire devolved functions. Reality on the ground shows that the LBs, government LAs and other actors have not been able to take the ownership of the devolved roles and responsibilities. There were many inherent problems on policy, procedures as well as institutional capacity. The central government lacks specific strategy and implementing action plans for sectoral devolution.
While devolving sectoral functions to LBs, it should have been clear that the LBs are units of local government that do not belong to a particular ministry or a department of the government but are independent units managed by the people's representatives elected by the sovereign people. Thus the devolved functions and services should be handed over to the subject-wise sections under the DDCs. For instance, when functions such as agricultural and livestock, primary education and health services are transferred to DDCs, they should be devolved as district agricultural, education and health sections within the DDCs respectively.
Information from the fields on devolved functions on three sectors reveals that the LBs have not been able to implement such activities freely as per the needs and aspirations of the peoples because of too much unnecessary interference from the political parties, very nominal budget available to LBs which lacked technical expertise and skilled human resources.
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For agriculture sector, though LSGA have devolved functions of agriculture and livestock services to DDCs, the organizational structures, staffing, roles and responsibilities, institutional mechanisms, budgetary provisions, accountability and monitoring aspects of DDCs have not been matched in accordance with the devolved roles and responsibilities. However on practical terms, these two DDCs have not been able to take the ownership of district-based agriculture and livestock programmes as per the provisions made in LSGA. Almost all the district-based stakeholders were confused as to how to work together to materialize the implementation of the provisions made in LSGA in this sector. So far, no changes have been made in terms of effective co-ordination and communication at the district level. There were no co-ordination mechanisms developed among DDCs, government LAs and other actors to implement the activities related to the devolution of agriculture and livestock services.
The respective functions, duties, and powers of the VDCs, municipalities and DDCs concerning education sector were also insufficiently separated and defined. For example, while the LSGA has given the VDCs a mandate to supervise and manage the community managed schools, the national guidelines issued by MoES does not provide a framework for the management of these schools by VDCs. In addition, the Education Act envisages management of schools as the responsibility of school management committees not to the VDCs. Since there have been practices of supporting Community Managed Schools managed by SMCs, which was heavily dominated by local high caste groups, directly from the centre and district based government LAs ignoring the LBs, there were no links established among central government, government LAs and LBs for effective co- ordination and implementation of devolved functions. Because of this, it was found that Kavre and Morang districts just acted as a cheque router without any functions of co- ordination and facilitation. Due to this reason, LBs appeared to be indifferent towards issues and problems related to the devolution in education sector. All these have, no doubt, affected negatively not just to the schools but also to all the community. There were many inadequacies in the guidelines on provisions for financial arrangements and accountability of the funds related to the devolved tasks, presence of under funded expenditure assignments, confusing responsibility for human resource management for the devolved functions. Practically, decisions on these subjects and issues would appear to be better placed at VDC level which could co-ordinate linkages vertically with DDC and DEO as well as horizontally with other community schools where the same standards across schools should apply.
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For health sector, there was a need to devolve all health posts, sub-health posts, primary health centers and Ayurvedic pharmacies to LBs and make them responsible and accountable to LBs. However again, the guidelines issued by the MoH have not given a real mandate and incentives to LBs to manage, monitor and follow up of sub-health posts. LBs were just given the task of running the sub-health posts as a sub-ordinate of DHO. There should be improvements in health service delivery, create more transparent and accountable government institutions for necessary actions both at the policy as well as at the implementation levels. It should ensure that the poor and socially excluded groups have better and more secure access to basic health services to strengthen their concerns and ability to hold the government accountable for better service delivery.
In Kavre and Morang districts, it was found that there were no clear-cut provisions for human resources development, job orientations, training and so on for the staffs who are managing the sub-health posts, primary health centres and Ayurvedic pharmacies. There were no adequate financial resources, clear delineation of financial flow mechanisms and the overall co-ordination among different actors to manage the health services at the local level. A significant financial gap existed between what was available and what was being planned which could compromise the health sector's ability to provide equitable, efficient and good quality services under the decentralization scheme. The existing human resource recruitment policy for health staffs has not been positive towards the rural poor. It doesn't promote the criteria for affirmative action measures through lobbying to the concerned ministry and departments such as MoH, MoGA, PSC and so on so that the inclusion of poor and socially excluded groups at all levels of health sector are included.
The crux of the problem, according to the respondents, lies with the central government’s decision to channel the funds directly to locally elected community groups such as CFUGs, SMCs and SHPMCs who are given authority to manage key aspects of the local community forestry, education and health services. This shows the ill intention of the central government not wanting to empower the LBs to manage the local affairs and development. The micro-level study from the Devbhumi and Babiyabirta VDCs of Kavre and Morang districts on local peoples' participation and representation in these local groups reveals that these groups have been highly dominated by the locally privileged male caste groups taking all the benefits from these local resources for themselves in the name of the rural poor and excluded groups. Also, these groups have been functioning without any co-ordination, communication and prioritization with the LBs and other local key actors. Therefore, this approach of the government did not provide any locus for the local political institutions and processes where priorities across sectors and stakeholder
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groups can be negotiated. These groups also blurred the accountability linkage between the efficient use of the public funds for local service delivery and the ability to stay in office, a function that the VDCs, Municipalities and DDCs should eventually provide with as a duty bearer to the people. Therefore, the local respondents were of the view that the institutional and financial capacity of the VDCs and DDCs should be strengthened and make them responsible and accountable to manage all these local functions related to agriculture, education, health, forest, drinking water and so on at the local level.
Moreover, major problems with the sectoral devolution, according to the practitioners of the decentralization, lie with the fact that there are no strategies, vision and specific plan of action with no political and financial commitment from the government. Existing prevalence of heavily authoritarian and over-centralized decision-making process of the central government, no fiscal autonomy to LBs to raised required resources locally for public expenditures, lack of institutional capacity of the LBs, lack of transparent and accountable working system of government and LBs, unclear roles of LB federations and associations, ministries, departments and other offices working for decentralization and sectoral devolution have added the salt to the injury.
Like at the central level, there existed no co-ordination and partnership among LBs, government LAs, NGOs and CSOs to work together at the local level as well. There were inadequate efforts and mechanisms to monitor, supervise and control the functioning of the government LAs and LBs. Although, many co-ordination committees and sub- committees were formed, they could not work as expected due to the political and bureaucratic reasons. On the other hand, the NGOs, CBOs and CSOs were also extremely weak, the citizens were generally unorganized and in a poor position to exert pressure on the LBs and the central government agencies for effective sectoral devolution and functioning.
The existing numbers of LBs, which are far too many, have also made the implementation of the sectoral devolution more complicated and difficult. It can therefore be concluded here that it was impossible to achieve the goals of decentralization and inclusive governance without full devolution of political, administrative, market and fiscal powers and authority to the LBs.
This part also suggests that empowering the LBs and local peoples through decentralization of authority and power also remained more rhetoric than practice.
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7.2.3 Fiscal and Operational Frameworks including Capacity Development, Partnership and Co-ordination amongst different Stakeholders.
Analyzing decentralization and local governance would not be complete without dealing with the issues related to the fiscal, organizational and managerial part of LBs. Even if there are required policies, legal, institutional and political environments in place, desired results can not achieve in the absence of fiscal, organizational and managerial capacities of the LBs.
Despite of many years' initiations, still LBs have not been able to generate internal resources needed to perform devolved functions on their own as their internal revenue base is extremely poor and narrow. Information from the field show that the VDCs, Municipalities and DDCs have always been dependent on the grants provided by the centre and no due attention was paid for implementation of fiscal decentralization. Because of this reality, the LBs could not figure out exactly what were the needs and desires of the local peoples while undertaking the local development initiatives.
Like in Panchayat times, the centre of the present 'democratic system' also provided the grants and imposed development plans, programmes and projects from the top making LBs unaccountable to the local people, who elected them, but instead they were made accountable to the central government and were less likely to be careful with their expenditures. From this, one can conclude that the LBs were not able to extend its services mobilizing the internal resources of their own. LBs should therefore be serious in mobilizing and activating to generate more local resources in order to enhance their fiscal capability.
Data from fields has also reinforced that the study districts and VDCs were not financially viable units. They used most of the scarce budget and resources for staff salary, administrative and other unproductive expenses and as a result very nominal budget was available for the local developmental activities.
Decentralization wouldn't be successful unless adequate provisions are made to finance the devolved functions. But even after the enactment of LSGA, the fiscal devolution of power and authority have not taken to the grassroots level and the tendency of keeping these to themselves at the centre has been a mockery of decentralization which continues even today. Still there are no sincere efforts from the major political party leaders and top
260 bureaucrats to narrow down the wide gap persist between urban and rural areas in terms of socio-economic and political empowerment and development.
In order to manage the fiscal requirement of the LBs, there was a need to deepening and widening the resource base as far as possible. There should be a separate fiscal policy and system for urban and rural areas, involve all the stakeholders and get their co-operation in fiscal management, provide special emphasis to build the capacity of LBs and their personnel, put effective follow up and monitoring mechanism in place, pay due attention for local revenue generation, establish effective co-ordination between central and local revenue generation and fiscal decentralization should be based on the nature of works that LBs ought to do, their expenses, standard of services to be provided, possibilities of revenue generation and fiscal balances an so on. In addition, there was an urgent need to review the existing number of LBs based on their capacity to generate internal revenues, devolve the entire power and authority as per the principle of fiscal decentralization and autonomy to LBs to manage their overall business by themselves, define and design the criteria for LB finance and composition of revenues. LBs should seek other alternative means such as mobilizing the NGOs, CSOs and private sector as there was no involvement of such third sector in government functions for service delivery. Only then, the LBs could function as viable units financially for undertaking the development activities.
On the capacity building part of LBs, all activities related to this were initiated and imposed from the centre not the other way round. Many respondents thus believed that had the central government given emphasis to promote the bottom-up approach to build their capacity, LBs capacity would have been developed and functioned reasonably well. In such a situation, the central government should have only monitored, supervised and facilitated the whole process of decentralization which never has happened in the country.
Moreover, the capacity building programmes for LBs were not linked to the national programmes of decentralization with the transfer of power, authority, functions and resources to LBs, the community and the LB associations and federations. They were not involved right from the beginning of the capacity development plan formulation, implementation and monitoring processes throughout. No determination and willingness were shown from the entire bureaucracy and political party leaders to empower the local peoples, LBs, NGOs and CBOs through their capacity and human resources development initiatives.
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The situation on the ground was that there were no mutual trusts, contacts and positive attitudes among the government LAs, LBs, NGOs, CSOs and private sector. Because of this grim situation, there was a lack of co-ordination and co-operation amongst them. The LSGA had provided space for NGOs, CBOs, CSOs and non-public institutions for local development but there were no clear policies, strategies and plans for involving these non-state actors in local development planning, programming processes and implementation. The private sector was principally recognized as an active partner but its roles were not clearly articulated at the operational level and there were no linkages of these non-state actors with the LBs planning and programming system.
In terms of partnership and co-ordination amongst different stakeholders, there was a lack of strategic thinking as well as no clarity on the roles and responsibilities of the central government, government LAs, LBs, NGOs and CSOs. Lack of clarity was also impeding the development of a mutually co-ordinated and co-operative environment of defining their inter-relationship for promoting decentralized local governance and empowerment. Centralized mindset of the political leaders and top bureaucrats, weak internal governance within the political parties and their leaders and absence of the elected representatives of LBs for more than a half decade have constrained LBs ability to sustain their power and authority provided by policy, institutional and legal instruments. The roles and responsibilities related to the capacity building assigned to the central government and the line agencies by LSGA have not been operationalized. Poor co- ordination and consultations among levels of governments, NGOs and CSOs in the service provisions and administration thereof and lack of forums for co-operation and clearance of disputes were seen at all levels ranging from central to the community levels.
Sound co-ordination, co-operation and partnership strongly call for a process of policy making participated in by all concerned actors which accept their common roles and responsibilities to empower the grassroots people, co-operate people by listening to their views and respond them the way they would want. It is the task of the central government together with LBs to initiate the participation of such actors in their respective areas which is a basic requirement of the inclusive governance. Co-ordination, co-operation and participation of local communities, NGOs and CBOs in designing policies, strategies and implementing them may yield in more equality in access to the political, social and economic resources horizontally and vertically which in turn may pave the way for effective peoples' participation and inclusive governance.
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The fiscal and operational frameworks for capacity development, financial resources mobilization of LBs in promoting partnership and co-ordination amongst different actors as illustrated above thus have remained only in rhetoric than in practice.
7.2.4 Institutional Framework for Inclusive, meaningful Peoples' Participation and Representation in State Institutions.
In terms of present structure of the state, there are a total of 41,014 LBs divided under 14 zones. The total number of LBs particularly the VDCs is far too many and is institutionally extremely weak. Almost all of them were not economically viable to run and manage (the requirement of financial resources to manage the salary and other expenses of 3,913 VDC secretaries can be cited one such example here) the development activities. They needed more administrative cost (unproductive expenditures) that means less scared funds available for the development activities. The potential of collecting taxes and revenues for LBs was thus limited because of the poor economic and narrow physical areas and as a result, almost all the LBs have no potential to develop into economically viable units. The poor, vulnerable and socially excluded groups have very less representation to these institutions.
As per the existing provision of LSGA, DDC functions as a higher-tier and VDCs and municipalities combined together as lower-tier of LBs and DDC has been perceived as a core element of decentralization scheme in the country. They are units of local government entrusted for the purpose of local development. But on the other hand, the same LSGA made DDCs very fragile as they could be dissolved by the central government at any time and their accountability to the people was also not directly established either as there were no provisions for direct elections for the DDC executive and council. In terms of their roles, these three bodies have equal status. In view of this, it was not clear as to what impact the DDC will have on the two lower bodies in terms of directions, policies and control as DDCs need the greater amount of roles and responsibilities. In the context of the lack of agency for monitoring, evaluating, guiding and assisting the excessive number of VDCs, it would perhaps be appropriate to provide these responsibilities to DDCs and there appeared a need for co-ordination with the municipality as well.
From the above, it can be concluded that the present structure of LBs has posed a great difficulty in operationalizing and implementation of decentralization scheme effectively.
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Because of this, many problems were seen at the district and VDC level which are as summarised follows: i) Since there are far too many numbers of LBs, it has been too expensive to run them administratively and financially. There was a need of huge resources to train and build their capacity. Hence there was a huge dependency of these LBs on central government grants as there was no implementation of effective fiscal decentralization and they can not generate required resources on their own. Because of these, LBs have not been able to grow as economically and institutionally viable units. ii) The expenditure on the facilities or allowances of the representatives being very high, the meager revenues collected was spent on unproductive overhead expenses rather than on subjects of popular interests and development activities. iii) There was a lack of financial incentives to motivate the competent and dedicated leaders for a full time work in LBs. Because of this, it was very difficult to attract qualified personnel to work and manage the LBs. There was a mis-match between work responsibilities and resources. It was difficult to manage expenses incurred and maintain fiscal discipline thus failed to deliver basic services to the people as a free and an autonomous body, and; iv) There were considerable diversities in the context in which LBs operate particularly the size and territory of the LBs, size of the population, natural resource base, organizational and fiscal capacity. It was thus questionable whether the uniform approach adopted by the central authority for implementing decentralization scheme was appropriate in relation to the functioning of the existing diversified LBs.
Decentralization, local governance and their effective implementation are directly linked with the domain of autonomy of the LBs. But the centre till now opted for administrative de-concentration in the name of devolution to show to donors, INGOs and others to show that they are committed for total administrative, financial and political decentralization of power to the lower units of government. This has excluded the poor and vulnerable groups from the state and non-state institutions. The continued domination of a few privileged castes and classes ever since Nepal's geographical unification by force in 1769 and due to the lack of enthusiasm of the upper caste and class groups to change the state structures, the Nepali state has all along been status quo-bound and remained highly exploitative. That was why the country witnessed a decade long violent conflict which has ultimately brought up the issue of the urgent need for the restructuring of the present state in fore front and the Constituent Assemble has now already approved the decision for the federal structure. Federalism has now, in fact, become the talk of the country and
264 many Scholars, Political Leaders and Activists, Civil Society and Janajati Leaders, Human Rights Activists, Academia and so on have engaged in hot discussions on this and have floated different models of federalism.
In light of the above, this researcher thinks that the debate on whether decentralization is 'good or bad' is simply unproductive as decentralization is a political reality and there is a need to decentralize or devolve the power and authority from the centre to lower units of governments such as districts, Ilakas and villages whether we have a federal or unitary system of governance.
In this connection, federalism is also a concept of devolution of power and decision- making authority from the centre to different layers of governments such as the states or provinces and local levels. It is not true that we do not need decentralization once we have federal system of governance. Decentralization is equally important and applicable to devolve power and authority from centre to state or provinces to VDCs, communities as well as household level.
Federalism is a political structure that should accommodate the heterogeneous socio- cultural and linguistic groups like ours by bringing the governments and development closer to the peoples and reduces the central elites' control over it. The new federal system of governance should be able to change both the structure and culture of the basic norms of every day life of the Nepalese people which didn't happen after 1990's political change. It only made a slight change in state restructure (moved from autocratic Panchayat to more democratic system) but many things such as peoples' perceptions and behaviors and working cultures remained the same. So far, it is evident that the discussions and debates on 'federal structures and restructuring of the present state' have focused only about the relationship between centre and provincial or state governments as to how many states or provinces are being created under what basis, what are the roles and responsibilities of the centre and federal provinces or states and no discussions and debates whatsoever have taken place to devolve powers and authorities below than these. While it may not be possible right now to chart out detailed powers and authorities to lower units (VDC, municipality and DDC levels) in the Constitution but if the new Constitution in question would not include the provisions to devolve true power and authority to empower 4,046 VDCs, Municipalities and DDCs, the new Constitution will bound to fail. This would ensure social inclusion, equity, governance and justice so as to empower the poor, vulnerable and socially excluded groups for their socio-economic, cultural and political advancement. The new
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structures should also promote the role of CSOs and private sector in local development as ignoring non-state institutions can undermine any efforts to reform local governance and development. This part would therefore be extremely important and crucial if the centre wants to devolve real powers, authorities and responsibilities to the lower level of governance. Without these, creating new Nepal will be hollow and remain as a distant dream. If the Political Leaders and Activists, CA members, Civil Society and Janajati Leaders, Human Rights Activists, Academia and so forth are not serious about it before it is too late, the new Nepal that we envisioned would not be different from that of Rana, Panchayat and the so-called democratic era after 1990 where most of the poor and marginalized sections of the society were ignored and excluded.
The centre has therefore to strengthen the LBs even under the federal system and there is a need for the Constitutional guarantee to empower the LBs. It must be stressed here that before carving the federal states or provinces, the government must decide the fate of the LBs and we can learnt many things from Nepal's past experiences of implementing the decentralization schemes as explained in this study.
If Nepal really wants to ensure social equity and justice so as to empower the poor and excluded groups for their full socio-economic, cultural and political advancement, the entire system of governance should be inclusive and participatory which is not possible from the present state structures. It is therefore the need of the hour that the Nepali state institutions must be restructured and re-organize the functions of central and local governments, re-orient the mindset of government officials and political leaders, focusing on equitable development and improving the credibility of LBs, NGOs, CBOs and CSOs.
7.2.5 Roles, Responsibilities and supports of different Stakeholders
Different stakeholders such as the government ministries and departments, political parties, LBs, CSOs, NGOs, associations and federations of LBs, donor agencies and INGOs have been working to implement the decentralization schemes since a long time back in Nepal. However, the major political party leaders and central bureaucracy have never been serious to devolve power and authority to LBs to make them strong and viable units for undertaking the local development initiatives.
So far, the central government ministries have not been committed to empower the LBs as demanded by the LBs and their associations and federations. They have never been
266 keen to relinquish the control over jobs and funds that they enjoy under the existing highly centralized administrative structure.
The respective ministries such as the ministries of education and health have prepared guidelines to decentralize schools and health posts to the community by ignoring the roles that LBs can play for better co-ordination and facilitation. It was evident from the study districts and VDCs that the central government ignored the DDCs and VDCs for managing the community forests, schools and health posts at the local level Also, LSGA has given some powers to the LBs but LSGR cut off the same power by deputing the staffs to the government LAs directly from their respective ministries and department making them totally accountable to their line ministries and departments not to the LBs..
It has also been a concurrent fact that all the development plans and programmes were made hastily on an 'ad hoc' basis excluding the poor and marginalized groups while the benefits of decentralization were grabbed by the local dominant groups. All these plans were supply based and there was a total lacking of information and data required for effective plans and programmes for LBs. There were no horizontal communication, co- ordination and accountability for all plans and programmes with extremely weak monitoring system. All these factors eroded the credibility of the local institutions for delivering the goods and services to the local people.
In addition, almost all the NGOs, CBOs and CSOs were captured by elite groups and the leaders of political parties who wanted the LBs to be fulfilling their party interests. They treated LBs as recruitment centers for their political cadres and never thought to develop as viable units for local development. Since our society has been poverty ridden, power facilitates the fulfillment of the needs and aspirations of the elite groups. That was why, once they tested the fruits of the power and prestige, they would never give them up. That was why no due attention has been paid to mobilize NGOs, CBOs and private sector for local development.
On donors' side, many donor agencies and INGOs have been providing supports on decentralization and local governance since a long time back. However during the Panchayat period, the feudal state sought to build its power and continue its role as source of patronage by channeling the benefits of donor and INGO funded development programmes to the rural poor through its elite staffed government machineries. Their supports had intensified further after the 1990 peoples' popular movement but the impacts of such supports have not been positive as originally thought and expected.
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Most of the donors and INGOs programmes have channeled through NGOs and CSOs that focused at local level but the central level government plans and programmes were channeled through their LAs not via LBs. Also there is no co-ordination and co-operation between them. It was interesting to note that the donors have also provided supports for petty activities which should have done by the government itself through their own internal resources. It showed as to how badly the Nepal government has become dependent on others. Because of this, the tendency and mentality of government officials have become very dependent. Also the donors and INGOs have provided space and channeled funds only to those selected NGOs and CSOs who were supportive of their policy objectives and working approaches. From the past experience, one can say that most of the supports from donors and INGOs couldn't even touch a large chunk of the poor and excluded groups as they do not have any knowledge and skills to prepare project proposals and reports to convince them for the support. They also lacked required linkages with the government policy and decision-makers as well as the donor agencies since the high dominant groups were the main gate keepers of these donor agencies.
At present, different donors programmes and projects were scattered which have unable to provide the resultant effects for better implementation of decentralization schemes. As more donor supports were concentrated at the local level than the national level, it was extremely important that if they were serious in supporting and promoting decentralization schemes, they needed to support and engage themselves vigorously with the central government. The lessons learnt from different programmes and projects of donors and INGOs at all levels should also be disseminated widely to attract the attention of the political leaders, policy makers and government bureaucrats.
At the central level, there was no co-ordination among government ministries, NPC, donors and INGOs to the desired extent working in the fields of decentralization and local governance. It would have been better if there were only a one-entry channel so that there would be effective co-ordination and monitoring amongst their different programmes and projects. Other ministries think that the subject of decentralization and local governance should not be the subject of MoLD per se. It was strongly felt that it would have yielded better results, effective implementation and better co-ordination for decentralized local governance if this was placed under the powerful body as a separate entity rather than under the MoLD.
At the district level, some forms of co-ordination mechanisms existed but understandably they differed with each other greatly. Each and every INGOs and donor agencies have
268 their own co-ordination systems in place. Some adopted committee system for decision making while others linked it to LBs. However, there was a need to have a strong co- ordination mechanism for all donors' programmes at both the central and local levels for improved co-ordination and communication to avoid conflicting advices, programme duplication and waste of scarce resources. Donors and INGOs have been very important partners in the decentralization process and measures needed to be taken to improve the co-ordination efforts to provide efficient and effective assistance and support for better impacts. Nepal government as well as the donor agencies and INGOs should be fully aware and clear as to what each side has to do in order to make the partnership of working for decentralization effective and productive.
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Annex: A
Names and Details of Different Respondents for the Study
I. VDC and District Level, Kavre District
Officials of Government Agencies, Social Activists, Social Workers, Teachers, Laborers, Students, Women Activists, NGO and CBO Activists, Political Leaders and Activists
S No Name Position Institution 1 Ambika Kandel Teacher and Woman Janabhawan Primary School Activist 2 Anil K Thakur Former LDO DDC, Kavre 3 Badri Nath Pathak Teacher Ajad HS School 4 Bharat Prasad Sapkota Political Activist Devbhumi Baluwa VDC 5 Bhakta Kumari Lama Student Leader Devbhumi Baluwa VDC 6 Binod Singh LDO DDC, Kavre 7 Buddi Lal Kami Chief CPN (M), VDC Level Committee 8 Buddi Maya Lama Political Worker Devbhumi Baluwa VDC 9 Chandra Lal Danuwar Social Worker Devbhumi Baluwa VDC 10 Chyouku Lama Janajati Activist Nepal Tamang Ghedung, Kavre 11 Deepak Acharya In-Charge Ilaka Aurbedik Health Centre, Devbhumi Baluwa VDC 12 Devi Prasad Sharma Technical Assistant District Agricultural Development Office, Kavre 13 Fatik Bahadur K.C. School Supervisor District Education Office, Kavre 14 Ganesh Prasad Ghimire Accounts Officer District Education Office, Kavre 15 Gopal Danuwar Political Activist Devbhumi Baluwa VDC 16 Govinda Prasad Paudel Teacher Bhuvabeshor Primary School 17 Griba Nath Kharel Former Chairperson Devbhumi Baluwa VDC 18 Hari Bhakta Khoju Civil Society Activist Rural Community Development Group, Dhulikhel 19 Hemant Kumar Singh School Supervisor District Education Office, Kavre 20 Huyendra Rana Magar Social Worker and Namobuddha Community Radio Journalist Radio, Kavre
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21 Ishor Prasad Rijal Chief District Agricultural Development Office, Kavre 22 Jagat Prasad Neupane Former Chairperson of Devbhumi Baluwa VDC VDC and Chairperson of VDC for Nepali Congress 23 Janardhan Acharya Former Vice- Devbhumi Baluwa VDC chairperson 24 Janardhan Neupane Planning and Statistics District Health Office, Officer Kavre 25 Jit Bahadur Danuwar Political Activist Devbhumi Baluwa VDC 26 Jit Ram Lama Janajati and Civil NGO Federation, Dhulikhel Society Activist 27 Kali Danuwar Health Worker VDC Sub-health Post 28 Kamala Danuwar Woman Activist Devbhumi Baluwa VDC 29 Kaman S Lama Former MP United Peoples' Front 30 Kanchha Ram Tamang Former Vice- DDC, Kavre Chairperson 31 Kedar Prasad Sapkota Social Worker Devbhumi Baluwa VDC 32 Kedar Nath Ghimire Teacher Mahangkal High School 33 Krishna Bahadur Ale In-Charge VDC Sub-health Post 34 Krishna Bahadur Danuwar Social Worker Devbhumi Baluwa VDC 35 Laxmi Danuwar Woman Activist Devbhumi Baluwa VDC 36 Madhav Prasad Kharel Social Worker Devbhumi Baluwa VDC 37 Maina Danuwar Woman Activist Devbhumi Baluwa VDC 38 Maiya Shiv Bhakti Political Worker Devbhumi Baluwa VDC 39 Maiya Timilsena Health Worker VDC Sub-health Post 40 Manik Lama Political Activist CPN (Maoist) 41 Mohan Kharel Office Assistant Devbhumi Baluwa VDC 42 Mukund Keshari Pokharel School Supervisor District Education Office, Kavre 43 Narahari Shah Political Activist Devbhumi Baluwa VDC 44 Nira Shakya Former District District Education Office, Education Officer Kavre 45 Om Bahadur Danuwar Social Worker Devbhumi Baluwa VDC 46 Palsang Lama Former Vice- DDC, Kavre Chairperson 47 Pasang Dolmo Tamang Woman Activist and Kavre Journalist 48 Prabhuram Bhandari Political Activist Devbhumi Baluwa VDC 49 Prahlad Prasad Timilsena Teacher Ajad Higher S School 50 Prem Bahadur Khatri Programme Officer DDC, Kavre 51 Purna Bahadur Danuwar Social Worker Devbhumi Baluwa VDC 52 Purna Kumar Shrestha Social Worker Devbhumi Baluwa VDC 53 Rajkumar Kharel Social Worker Devbhumi Baluwa VDC
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54 Ram Bahadur Danuwar Ward Chairperson – 6 Devbhumi Baluwa VDC 55 Ram Devi Shrestha Health Worker VDC Sub-health Post 56 Ram Krishna Pudasaini Accounts Officer DDC, Kavre 57 Ram Krishna Thapa Political Activist Devbhumi Baluwa VDC 58 Rishi Kant Ghimire Programme Officer DDC, Kavre 59 Kamala Nepali Farmer Devbhumi Baluwa VDC 60 Sanu Kancha Lama Political Activist Devbhumi Baluwa VDC 61 Shankha Buddha Lama Chairperson NGO Federation, Kavre 62 Shantiram Paudel Section Officer District Education Office, Kavre 63 Shreekanta Ghimire Planning Assistant District Agricultural Development Office, Kavre 64 Shyam Gopal Gautam Teacher Narayan Primary School 65 Sudarshan Acharya Social Worker Devbhumi Baluwa VDC 66 Sudarshan Lamichane Assistant Officer District Health Office, Kavre 67 Sundar Kumar Shakya District Education District Education Office, Officer Kavre 68 Suni Lama Woman Activist Rural Women Welfare Centre, Kavre 69 Surendra Prasad Chief District Health Office, Chaurasiya Kavre 70 Surya Bahadur Danuwar Political Activist Devbhumi Baluwa VDC 71 Surya Dong (Lal Dhoj) Political Activist and CPN (Maoist) CA member 72 Tanka Prasad Adhikary Former Secretary Devbhumi Baluwa VDC 73 Tara Banjara Assistant Accounts DDC, Kavre Officer 74 Thamu Narayan Bhandari Secretary Devbhumi Baluwa VDC 75 Shiv Prasad Neupane Chairperson CPN (UML), VDC Level Committee 76 Usha Hamal School Supervisor District Education Office, Kavre 77 Yaduman Shah Former Chairperson DDC, Kavre
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II. VDC and District Level, Morang District
Officials of Government Agencies, Social Activists, Social Workers, Teachers, Laborers, Students, Women Activists, NGO and CBO Activists, Political Leaders and Activists
S No Name Position Institution 1 Arunraj Adhikary Political Activist Morang District 2 Arjun Niraula District Education District Education Officer Office, Morang 3 Baburam Pokharel School Supervisor District Education Office, Morang 4 Basant Raj Aryal Planning Officer District Agricultural Office, Morang 5 Betka Murmu Social Worker Babiyabirta VDC 6 Bhanu Yangden Chief (Under Secretary) District Public Health Office, Morang 7 Bhola Nath Ghimire Secretary Babiyabirta VDC 8 Binod Shrestha Political Activist Morang District 9 Bisan Murmu Social Worker Babiyabirta VDC 10 Dev Raj Chaudhary Chairperson NEFIN's District Co- ordination Council, Morang 11 Dibya Raj Kattel Accounts Officer District Education Office, Morang 12 Dilip Mardi Social Worker/Janajati Babiyabirta VDC Activist 13 Durga Devi Marandi Woman Activist Babiyabirta VDC 14 Francis Kisku Social Worker Babiyabirta VDC 15 Ganesh Mandal Janajati Activist Babiyabirta VDC 16 Ganesh Prasad Dahal Senior Planning and DDC, Morang Monitoring Officer 17 Ghanashyam Shrestha Accounts Officer District Public Health Office, Morang 18 Sabita Harijan Women Activist Babiyabirta VDC 19 Hemjul Soren Social Worker and Nepal Santhal Adibasi Janajati Activist Utthan Sangha, Morang 20 Jhamak Bhhatarai Programme Officer DDC, Morang 21 Jhanduram Hemrom Laborer/Farmer Babiyabirta VDC 22 Jugal Tudu Political Worker Babiyabirta VDC 23 Khadga Bahadur Basnet Former DDC President DDC, Morang 24 Kishor Kumar Baral Accounts Officer DDC, Morang 25 Krishna Prasad Dahal Section Officer District Education Office, Morang 26 Lakhan Hasda General Secretary and Nepal Santhal Adibasi
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Civil Society Activist Utthan Sangha, Morang 27 Laxman Santhal Former Chairperson and Nepal Santhal Adibasi Social Worker Utthan Sangha, Morang 28 Laxmi Dhimal Officer Local Development Fund, DDC, Morang 29 Lukhi Ram Hasda Chairperson Nepal Santhal Adibasi Utthan Sangha, Morang 30 Madhav Prasad Dhungel Section Officer District Agricultural Office, Morang 31 Mahanta Hemrom Student Activist Babiyabirta VDC 32 Mahendra Khadka Information Officer DDC, Morang 33 Mangal Soren Office Assistant Babiyabirta VDC 34 Manoj Baske Senior Janajati Activist Nepal Santhal Adibasi Utthan Sangha, Morang 35 Mohammad Wasil Miya Veterinary Officer District Public Health Office, Morang 36 Mohan Paudel School Supervisor District Education Office, Morang 37 Mohan Bahadur Thapa Chief (Senior District Agricultural Agricultural Office, Morang Development Officer) 38 Nirmala Marandi Woman Activist and Nepal Santhal Adibasi REFLECT Facilitator Utthan Sangha, Morang 39 Parbati Murmu Woman Activist and Nepal Santhal Adibasi Social Mobilizer Utthan Sangha, Morang 40 Parta Ram Dhimal Political Worker Babiyabirta VDC 41 Pawan Biswakarma Social Worker Babiyabirta VDC 42 Pitamber Wasti Planning Officer DDC, Morang 43 Prem Chapagain LDO DDC, Morang 44 Rabi Lal Tudu Social Mobilizer Nepal Santhal Adibasi Utthan Sangha, Morang 45 Rajesh Hasda Student Activist Babiyabirta VDC 46 Ramesh Chandra Paudel Former Mayor Biratnagar Municipality 47 Ram Prasad Siwakoti Planning Officer District Agricultural Office, Morang 48 Sabita Hasda Woman Activist and Nepal Santhal Adibasi Group Mobilizer Utthan Sangha, Morang 49 Saligram Dahal Assistant Accounts DDC, Morang Officer 50 Sanjay Hasda Student Activist Babiyabirta VDC 51 Saroj Gautam Programme Officer DDC, Morang 52 Shiv Narayan Khawas Social Worker Babiyabirta VDC 53 Sitaram Dhakal Under-Secretary District Public Health (Administration) Office, Morang 54 Sonu Marandi Woman/Student Activist Babiyabirta VDC
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55 Suman Rajbanshi Political Activist Babiyabirta VDC 56 Suni Lal Soren Janajati Activist Babiyabirta VDC 57 Suresh Paudel Local Leader Babiyabirta VDC 58 Surya Narayan Hasda Former General Nepal Santhal Adibasi Secretary and Teacher Utthan Sangha, Morang 59 Susila Ram Laborer/Farmer Babiyabirta VDC 60 Tek Raj Koirala Public Health District Public Health Supervisor Office, Morang 61 Tilak Ram Paudel Executive Officer Biratnagar Municipality
III. Representatives of Central Level Government Officials, Political Party Leaders and Activists, Decentralization and Local Governance Experts, NGOs, CSOs, Human Rights Organizations, INGOs and Donor Community
III (a) Central Level Government Officials
S No Name Position Institution 1 Bishnu N Sharma Joint Secretary MoLD 2 Bishnu Gautam Joint Secretary MoLD 3 Chabindra Parajuli Section Officer NPC 4 Chaitanya Subba Former Hon'ble Member NPC 5 Dinesh Prasad Thapalia Under Secretary/Chief MoLD/Kathmandu Executive Officer Municipality 6 Dharmaraj Belbase Section Officer MoLD 7 Dhurba Dahal Under Secretary MoLD 8 Ganga Dutta Awasti Joint Secretary MoLD 9 Govind Prasad Dahal Local Governance LDTA Expert 10 Hari Prasad Rimal Joint Secretary MoLD 11 Hem Sharma Paudel Under Secretary/Former MoLD/Bhaktapur Executive Officer Municipality 12 Ishor Dahal Section Officer Local Bodies Fiscal Commission, MoLD 13 Jagadish Chandra Vice-Chairperson NPC Pokharel 14 Jitpal Kirant Vice-Chairperson NFDIN 15 Krishna Hari Banskota Joint Secretary MoF 16 Khem Raj Nepal Former Secretary MoLD 18 Lal Bahadur Karki Section Officer MoLD 19 Lok Bahadur Thapa Member Secretary NFDIN Magar 20 Mahesh Prasad Dahal Under Secretary MoLD 21 Mukunda Pokharel Accounts Officer MoLD
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22 Narayan Prasad Thebe Administrative Officer NFDIN 23 Nayan Bahadur Khadka Acting Executive LDTA Director 24 Padma Raj Regmi Joint Secretary MoLD 25 Ramakanta Gauro Former Hon'ble Member NPC 26 Sant Bahadur Gurung Former Vice- NFDIN Chairperson 27 Som Lal Subedi Joint Secretary MoLD 28 Shashi Shekhar Shrestha Under Secretary NPC 29 Tamla Ukyab Former Member NFDIN Secretary and Decentralization Expert 30 Uddhav Koirala Local Governance LDTA Expert/Senior Trainer 31 Yub Raj Pandey Secretary MoLD
III (b) Central Level Political Leaders and Human Rights Activists
S No Name Position Institution 1 Anil Kumar Jha Central Leader Sadbhawana Party 2 Bijay Subba Former MP CPN (UML) 3 Bidur Prasad Paudel Central Member NC (Democratic) 4 Bishwa Pratap Shah Central Member Sadbhawana Party (Ananda Devi) 5 Daman Nath Dhungana Constitutional Expert/Senior Lawyer 6 Fatik Thapa Former MP CPN (UML) 7 Hanumani Mandal Political Activist Sadbhawana Party (Ananda Devi) 8 Jeevan Shrestha Member NC 9 Jit Bir Lama Central Member United Leftist Front 10 Jog Mehar Shrestha Central Member RPP 11 Kamal Thapa Central Leader RPP 12 Keshab Nepal Central Member United Peoples' Front 13 Krishna Gopal Shrestha Central Member CPN (UML) 14 Lila Mani Pokharal Vice-chair United Peoples' Front 15 Malla K Sundar Human Rights Activists/ National Coalitions Former MP Against Racial Discrimination 16 Minendra Rijal Central Member NC 17 Narahari Acharya Central Member NC 18 Narayan Khadka Central Member NC 19 Padma Ratna Tuladhar Human Rights NEFIN Activists/Advisor 20 Pari Thapa Central Member United Peoples' Front
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21 Prakash Chandra Lohani Vice-Chairperson Nepal Janashakti Party 22 Prem Suwal Central Member NWPP 23 Ram Krishna Bhattarai Central Member Nepal Janashakti Party 24 Ram Chandra Paudel General Secretary NC 25 Rakam Chemjong Central Member CPN (UML) 26 Rajendra Prasad Pandey Former MP CPN (UML) 27 Sarita Giri Central Member Sadbhawana Party (Ananda Devi) 28 Shanker Pokharel Central Member CPN (UML) 29 Shovakar Parajuli Secretary NC 30 Sunil Kumar Bhandari Central Member NC
III (c) Central Level Civil Society Leaders, Activists, Local Governance And Decentralization Experts, INGOs and Donor Community
S No Name Position Institution 1 Amrit Yonzon Tamang Development Civil SAGUN Society Activist/Trainer 2 Arjun Rai Member ADDC/N 3 Ashok Byaju Vice-chairperson MuAN 4 Bekha Ratna Shakya Vice President Decentralization Assistance Society 5 Bidur Mainali Local Governance MuAN Expert/General Secretary 6 Bihari Krishna Shrestha Decentralization Freelancer Expert/Former Bureaucrat 7 Bijay Singh Danuwar Local Governance and Freelancer Community Forest Expert 8 Bimal Tandukar Programme Co- Enable State Programme, ordinator, Good DFID Governance Programme 9 Binod Kumar Bhattarai Local Governance Freelancer Expert 10 Binod Chapagain Monitoring and Livelihood Forestry Evaluation Expert Programme, DFID 11 Bishnu Puri Decentralization and DFDP Local Governance Expert 12 C K Lal Civil Society Freelancer Activist/Journalist 13 Damodhar Prasad Decentralization and Freelancer Adhikary Local Governance Expert
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14 Dandi Ram Biswakarma Development Expert SDC Nepal 15 Dormani Paudel Decentralization and MuAN Local Governance Expert/Chairperson 16 Durga Prasad Paudel Decentralization and Freelancer Local Governance Expert 17 Dwarika N Dhungel Decentralization and IIDS Local Governance Expert 18 Ganesh Yonjan Development SAGUN/ Freelancer Expert/Janajati Leader 19 Hikmat Bista Devolution and Local DASU Danida Governance Expert 20 Hiramani Ghimire Local Governance DFID Nepal Expert 21 Keshav Man Shakya Local Governance SNV Nepal Expert 22 Krishna Man Pradhan Decentralization and RDF Local Governance Expert/Chairperson 23 Krishna Prasad Sapkota Chairperson ADDC/N 24 Krishna Lal Sapkota President Decentralization Assistance Society 25 Lal Kumar KC Member ADDC/N 26 Madhav Prasad Paudel Local Governance ADDCN Expert/Member 27 Mahin Limbu Chairperson NAVIN 28 Mukti Prasad Kafle Decentralization and RAP Local Governance Expert 29 Mukta S Lama Anthropologist and SAGUN Local Governance Expert 30 Mukti Rijal Decentralization and IGD Local Governance Expert 31 Nani Ram Subedi Trainer and Planning ICIMOD Expert 32 Pasang Sherpa Janajati Activists/ NEFIN Chairperson 33 Prem Sharma Rural Development TU Expert 34 Pradeep Thapalia Local Governance NAVIN Expert/Executive Director
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35 Rabindra Man Shakya Former Secretary and Freelancer Decentralization/Local Governance Expert 36 Raghav Raj Regmi Decentralization and Freelancer Local Governance Expert 37 Ram Krishna Pokharel Decentralization and DLGSP/PDDP Local Governance Expert 38 Ram Bahadur Chettri Financial Analyst GTZ/UDLE 39 Rameshor Phuyal Local Governance Kathmandu District Expert/Former Vice- Development Committee Chairperson 40 Rishi R Lumsali Local Governance ADDC/N Expert and Vice-chair 41 Sakeet B Thakur Decentralization and Freelancer/Jagriti Nepal Local Governance Expert 42 Sanjay Adhikary Local Governance Water Aid Nepal Expert 43 Sanu Shrestha Former Chairperson Kathmandu District Development Committee 44 Santosh Bisht Local Governance DFID/ESP Nepal Expert 45 Saroj Nepal Executive Director NAVIN 46 Shova Basnet Executive Director SAMANTA 47 Sumitra Manandhar Geographer and Local National Coalitions Gurung Governance Expert Against Racial Discrimination 48 Surendra Bir Singh Decentralization and IGD Thapa Local Governance Expert 49 Surendra Pathak Executive Secretary MuAN 50 Surya Prasad Shrestha Decentralization and ADB Nepal Local Governance Expert 51 Tulsi Narayan Shrestha Decentralization Expert TU
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ANNEX: B
Questionnaire for Household Survey and Village Development Committee Level Representatives (both former and present), Government Officials, Social Workers and Activists, Teachers, Students, Women Activists, Political Workers, NGO and CBO Activists of Devbhumi Baluwa and Babiyabirta VDCs of Kavre and Morang Districts32
I. Household, Family Descriptions and Other General Information Q No Questions Response Category and Codes 01 Name of the respondent: 02 Sex: Male - 1, Female – 2 03 Age: 04 Caste : Brahmin - 1, Chhetri - 2, Ethnic groups - 4, Dalit – 4 05 VDC and Ward Number of the respondent: 06 Position held: 07 What is the size of your land holding? Bigha – 1, Ropani – 2 08 Are you the head of your household? Yes – 1, No – 2 09 If no, who is the head of your household? 10 How far have you studied? 11 What are the major occupations of your household? II. Household Participation in Local Bodies (LBs) 12 How many times have you served in the VDC and what was
the position held and for how long? 13 Are there any other members of your household who Yes – 1, No – 2 occupied a position in the DDC and municipality? If yes, provide details of the position held, since when, how
it was secured (either by election or nomination) and the sex. 14 Were you or any other member of your household a member Yes – 1, No – 2 of local bodies in the past? If yes, provide details 15 What were the factors that encouraged you or other family
members to take part in the local bodies? 16 Were there any other members of your family a MP? Yes – 1, No – 2 If yes, provide details. III. Participation in the Local NGOs and CBOs 17 Are you a member of any organizations other than local Yes – 1, No – 2 bodies at present? If yes, provide details of the position held, since when, how
it was secured (either by election or nomination) and the sex. 18 Had you or any members of your household resigned or withdrawn from attending any local organizations Yes – 1, No – 2 voluntarily in the past? IV. VDC's Capacity to Undertake the Given Roles and Responsibilities 19 Could you please state the level of adequacy of the human, material and financial resources for the VDC and assess these resources in terms of adequacy? Please give reasons for your assessment. Adequacy level Reasons Resources More than adequate - 1, Adequate - 2, Inadequate - 3 Human Material
32 The questionnaire was prepared in Nepali language and administered accordingly in the fields. However, for the purpose of this dissertation, it has also been translated into English.
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Financial 20 The following are the roles and responsibilities of the Village Council which are supposed to be undertaken by VDC. Which among the following roles and responsibilities are performed by your VDC? Assess the performance level on a ranking scale. Level of Roles and Responsibilities of Village Council Performance performance Always - 1, Highly satisfactory - 1 Sometimes - 2, Never - 3, Satisfactory - 2 Don’t know – 4 Unsatisfactory – 3 Don’t know – 4 To pass the budgets, plans and programmes submitted by
VDC. To approve the resolutions relating to the levying and collecting of taxes, charges and levies as proposed by VDC. To adopt the resolutions relating to the raising of loans or selling or disposing or transferring of immovable properties proposed by VDC To take actions against the irregularities within VDC if any. To grant approval, as required, on such number of positions, remuneration, allowances and other facilities of the employees proposed by VDC. To evaluate the administrative functions, provide necessary directions and guidance to VDC. To evaluate the development and construction works to be carried out by VDC and give necessary directions and guidelines. To approve the by-laws of VDC if any. To undertake any other activities related to VDC. V. VDC's Compliance with the Government Laws, Rules, Regulations and Acts to ensure Accountability 22 Do you know about decentralization related Laws, Rules, Regulations and Acts including the LSGA and the Yes - 1, No - 2, Don’t know – 3 authorities provided by these legal instruments? If yes, please provide details. 23 In your opinion, to what extent your VDC has been following LSGA and other government Rules and Laws Always - 1, Sometimes – 2, Never – 3 related with decentralization of power and authority? If sometimes or never, give reasons. 24 Have you got sufficient human resources to undertake the roles and responsibilities given by LSGA? Also please mention about the advantages and disadvantages of this Act. 25 Has your VDC developed code of conduct or manual for its Yes - 1, No - 2, Don’t know – 3 office bearers? If yes, are the above rules ever been applied and how Yes - 1, No - 2, Don’t know – 3 successfully? Please give examples of such use. 26 Can you please assess the roles of the following VDC officials in terms of how do they comply with their decisions
or commitments. [Response code: Always, Sometimes and Rarely] Compliance to decisions VDC Council's decisions/ Participation in VDC Officials Confirmation to made earlier Instruction VDC Council LSGA meetings Chairperson (former) Vice-chairperson(former) Ward chairperson (former)
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Members (former) Secretary (present) 27 How often are VDC decisions implemented in Always – 1, Sometimes – 2, Never – 3 general? Please give reasons 28 Has the VDC established any punishment mechanisms for those members who perform against Yes - 1, No - 2, Don’t know – 3 the VDC mandates or decisions? If yes, state details of such mechanisms 29 Has your VDC developed job description/code of Yes - 1, No - 2, Don’t know – 3 conduct or ToR for all VDC officials? If yes, please give details 30 What is the system adopted by the VDC to implement job description/code of conduct or ToR Yes - 1, No - 2, Don’t know – 3 for the officials? If yes, what types of system are being adopted? If no, please explain the reason of why job descriptions are not prepared? 31 To whom VDC is accountable and responsible? 32 Has the VDC adapted any policy to make village people participate in development programmes Yes - 1, No - 2, Don’t know – 3 formulation, planning, implementation, monitoring and evaluation? If yes, what types of system being adopted? 33 How often do you and the local people are making timely payment of their dues and taxes to VDC as Always – 1, Sometimes – 2, Never – 3 required by LSGA and other appropriate laws of the country? 34 Have you noticed any conflicts among different Acts, Rules, Regulations and Directives issued by Yes - 1, No - 2, Don’t know – 3 the government on decentralization with other sectoral Acts? VI. Functioning of VDC to Ensure Transparency 35 To what extent the VDC has been transparent on the following activities or programmes? Subjects/particulars Response/Evaluation Fully - 1, Partially - 2, Never -3, Don't know – 4 Estimation of annual plans, programmes and budget planning of the VDC Approval of annual programmes and budget Distribution of VDC's funds and resources Provide natural disaster funds to the affected VDC households Provide lease out contracts for utilization of VDC funds and resources Appoint contractors to build the physical infrastructures and maintenance of VDC Formation of user or community or consumer groups to manage local resources and conduct development activities 36 To whom does the VDC summit its annual progress
report? 37 Have the elected members of VDC made their Yes – 1, No - 2, Don’t know – 3 individual property public? 38 How frequent are the meetings of village council
and VDC supposed to take place and how often have
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they been held practically? 39 How frequently do the VDC members attend these Regularly - 1, Sometimes – 2, Never – 3 meetings? 40 Who initiates discussions in the VDC meeting? 41 Who participates in the decision-making of the VDC
meeting? 42 Who makes the final decision in the VDC meeting? 43 How decisions are mostly made in your VDC? 44 Who records minutes of meetings in the VDC
meeting? 45 Who keeps the minutes of meetings of the VDC
meeting? 46 How often VDC minutes of meetings are circulated Always - 1, Sometimes - 2, Never – 3, Don’t know – 4 among members? Do people know what is decided in the VDC Yes - 1, No – 2 47 meetings? If yes, how are they circulated or informed of the
decisions? 48 How often do you find written something in the minute book when these were not decided at the Always – 1, Sometimes – 2, Never – 3 meeting or these were decided differently? 49 How often are the officials of the government line Always - 1, Sometimes - 2, Never – 3, Don’t know – 4 agencies invited at the VDC meetings? 50 How often the officials of the donor agencies and Always - 1, Sometimes - 2, Never – 3, Don’t know – 4 NGOs are invited at the VDC meetings? VII. Financial Situation of VDC 51 Do you know the annual budget of your VDC? Yes - 1, No – 2 If yes, what are the sources of funding? 52 Do you know how much your VDC spends annually Yes - 1, No - 2, Not sure – 3 or monthly? 53 Do you know the sources of income of your VDC? Yes - 1, No - 2, Not sure – 3 54 What is the financial situation of your VDC? How adequately is your VDC resourced for the effective Strong – 1, Average - 2, Weak – 3, Don’t know – 4 the public service delivery? 55 In your opinion, how far VDC’s activities have been Highly effective - 1, Effective – 2, Ineffective – 3 effective to strengthen the financial base of VDC. Don’t know – 4 Please give reasons for your answers. 56 If you were to rank the performance of your VDC in terms of meeting peoples’ expectations, how would Performance rank Excellent - 1, Good - 2, Fair - 3, Poor – 4 you grade it? Please give reasons for your answers. 57 In order to make the work performance of the VDC more effective, please identify the internal and
external hurdles/constrains or problems that you have faced so far. 58 Who is accountable and responsible for the financial
management of VDC? Has the VDC prepared the job description of Yes – 1, No - 2, Don’t know – 3 59 accounts and fund management staff? If no, what are the reasons of not preparing it? Could you please access the performance of your
60 VDC on the following activities? Assessment rate Activities Excellent - 1, Good – 2, Average - 3, Weak - 4, Don't Know – 5 Service delivery to the members of local NGOs,
CBOs and CSOs situated within VDC.
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Service delivery to the VDC people Quality of services being provided to local NGOs
and VDC peoples How far you and public are aware of the following 61 VDC related government policies, directives, Fully- 1, Partially - 2, Don't know – 3 guidelines, and rules and regulations? LSG Act LSG Regulation Directives from MoLD and DDC Respective sectoral government Acts for Agriculture
Education and Health sectors How far the policies, regulations and directives Highly helpful - 1, Helpful – 2, Not helpful - 3 62 given below have been helpful to achieve your Don’t know – 4 VDC's objectives? LSG Act LSG Regulation Directives from MoLD and DDC Respective sectoral government Acts for Agriculture
Education and Health sectors 63 Could you please provide comments and suggestions with regard to the services being provided by village level Government Agencies? 64 Could you also please provide comments or suggestions with regards to village level NGOs and CBOs for better co-ordination and effective partnership for empowerment of local people and their development? 65 What would you like to suggest for further improvements of VDC’s financial base for its overall development? VIII. Co-ordination, Co-operation and Partnership among VDC, Government Agencies, NGOs and CBOs for Sustainability of VDC Plans, Programmes and Projects 66 Have you (Government LAs, NGOs and CBOs) participated in the following activities carried out by Yes – 1, No - 2, don’t know -3 VDC in the last five years? Village council meeting Training or orientation programmes of VDC Formulation of VDC annual plans and programmes Meetings to resolve local disputes and conflicts if any. Attending VDC meetings Making decision regarding selection of development plans, programmes or activities Contributing to make financial decisions Decision regarding selection of members of user groups, community organizations, consumer groups etc Monitoring and supervision of development
programmes/projects of VDC 67 Have your NGOs and CBOs conducted any programmes or projects in financial partnership with Yes - 1, No - 2, don’t know -3 the VDC? If yes, please provide details. 68 How has your NGO or CBO benefited from the
financial partnership with the VDC?
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69 How was it possible to launch financial partnership among your NGO or CBO, government agencies and VDC? 70 What changes in NGOs or CBOs activities were brought about by the financial partnership programmes between your NGO or CBO and VDC? 71 In your opinion, to what extent is the VDC aware of Quite aware - 1, Fairly aware - 2, Not aware - 3, don’t know - 4 activities of the NGO or CBO and government agencies based in your VDC? 72 What do you think about VDC and government agencies views and perceptions towards local NGOs Good - 1, Bad- 2, Worse - 3 and CBOs? 73 Is there any co-ordination and partnership mechanisms exist among your NGO, CBO, Yes - 1, No - 2, don’t know -3 government agencies and VDC for better functioning? 74 If yes, what are the mechanisms for co-ordination among VDC, DDC, NGOs, CBOs, Committees and donor agencies? And, how do you assess the Highly satisfactory - 1, Satisfactory – 2, Unsatisfactory – 3 functioning of these mechanisms? IX. Devolution of Power and Authority to VDC to Promote Peoples' Participation and Equitable Service Delivery 75 Is the central government able to over-ride the decisions taken by VDC in accordance with the wishes of their own electorate? 76 To what extent does the central government suspend or intervene in the affairs of the VDC for partisan political reasons? 77 What degree of autonomy do the VDC enjoy in relation to the central government both Constitutionally and in practice? 78 Do the central government intervene significantly in elections at the lower levels? 79 What powers or authority do the VDC have in relation to revenue raising, spending and recruitment and development of staff? 80 How independent is VDC from the centre and DDC and how far a VDC has the powers and resources to carry out their responsibilities? 81 How well a VDC is organised to decide and implement policy effectively? 82 How far a VDC is subject to free and fair election to the criteria of openness, accountability and responsiveness in their operation? 83 How extensive are the co-operation, co-ordination and partnership among VDC, government agencies, NGOs, CBOs and local communities in the formation and implementation of policies and their monitoring and follow ups in delivering the public services? 84 How representative is VDC of the population, which it serves? 85 How accountable are NGOs, CBOs, CFUGs, SMCs, SHPMCs to their members, and how free are they from corruption and other mal-practices?
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86 How open and systematic are the procedures for public consultation on government policy and legislation? 87 How far do women, ethnic groups and Dalits participate and represent in political life and public offices at the VDC level? 88 How equal is access for all social groups to public office, and how fairly are they represented within it? 89 How accessible and reliable are public services for those who need them, especially the poor and marginalized groups of the society? 90 How far are the public services subject to performance targets and standards, and to systematic auditing and evaluation? 91 How far are service users and user groups including poor and vulnerable groups involved in the planning, provision and evaluation of public services? 92 How effectively are the basic necessities such as education, health, shelter, food, clean drinking water etc of local people are fulfilled? 93 Which of the following services are being provided by private Individuals or agencies in your VDC for the people? Sectors Private sector service providers Yes - 1, No - 2, Don’t know - 3 Agriculture
Education
Health
94 What is the frequency of the service provided by the above local service providers in these three sectors? Also please mention the effectiveness of such services provided.
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Frequency of Service use Sectors Private sector service received effectiveness code Always - 1, service Very effective - Sometimes - 2 providers 1 Effective - 2 Never – 3 Not effective- 3 Agriculture
Education
Health
Date of the interview: ______
Thank you very much for your patience, support, time and co-operation
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ANNEX: C
Checklist for Focused Group Discussions (FGDs) for VDCs
1) Could you please compare the local services provided during the Village Panchayat of Panchayat Era with the present VDC under the multi-party system? Which one is better and why?
2) In your villages, are the local services related with health, education, community forest and others easily available? If no, please give reasons.
3) Do you know about the locally elected groups in managing SHPs, schools and community forests etc at the local level? How do the villagers elect them? Do they represent the whole VDC populations and work for them impartially?
4) Do you know how your VDC's development planning process takes place? Can you participate in local development activities of your villages? If yes, how often? If no, please give reasons.
5) How inclusive is your VDC of the whole VDC populations? Do you think your VDC has required human, materials and financial resources to carry out its roles and responsibilities? Please give reasons for your answers.
6) How easy has it been to get the local services from the present VDCs when it had elected representatives and when is being managed by the centrally appointed government employee?
7) Are you aware about the existence of village level political parties in your villages? If yes, do they provide equal opportunity to all the villagers to participate in them and how inclusive are they?
8) Do you know anything about the decentralization and Local Self Governance Act (LSGA) 1999? If yes, how did you know about it?
9) Has the present act (LSGA) given enough authorities to VDC to generate local resources for VDC level development?
10) What were the main reasons that decentralization was not satisfactorily implemented during the Panchyat Era? Do you think it has been implemented effectively and efficiently during the present multiparty system?
11) Are you aware of any NGOs or CBOs implementing projects/programmes in your VDC? If yes, do you know their sources of funding and have they been inclusive and working transparently?
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12) How do you perceive the roles of local NGOs and CBOs in promoting local development of your villages? Have you seen mutual co-operation and co- ordination among your VDC, NGOs and CBOs in undertaking local development activities? Please provide details.
13) What are your impressions about openness of the society after 1990 and how do you comment about the political leadership after 1990? Are they adequately responsive to the people?
14) Are you aware of any donor supported projects being implemented in your VDC? If yes, are the local peoples involved in this? If yes, please state how? If no, please give reasons. Are you happy with the project running in your community supported by foreign agency? If yes or no, give some reasons.
15) Any suggestions for promotion of inclusive and participatory state institutions for heterogeneous socio-cultural and linguistic groups?
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ANNEX: D
Check List for Officials of District Development Committees (both former Elected Representatives and present ones), Government LAs, Political Leaders and Activists, NGO and CSO Activists and Donors Agencies of Kavre and Morang Districts33
I. Participation in Local Bodies (LBs) 1 Apart from you, were there any other members of your household occupied the position in the DDC, Municipality or VDC? If yes, please provide details of the position held, elected or nominated, for how long and sex 2 What were the factors that encouraged you or other family members to take part in LBs? 3 Were there any other members of your family an MP? If yes, please provide details. II. Participation in Local NGOs, CBOs and CSOs (Local Organizations) 4 Are you member of any NGOs, CBOs or CSOs other than LBs at present? If yes, please provide the details 5 Apart from you, is any other member of your household occupying a position in an NGO or CBO or CSO? If yes, please provide details of the position held, since when, how it was secured (either by election or nomination) and the sex. 6 If you are occupying any positions in any other organizations, how did you happen to be in that position? 7 Had you or any members of your household resigned or withdrawn from attending any local organizations voluntarily in the past? If yes, please provide the details 8 Had you or any member of your household been dismissed/removed from any local organizations in the past? If yes, please provide the details III. Capacities of LBs to Undertake the Given Roles and Responsibilities 9 Please assess the level of adequacy of human, material and financial resources of the DDC. 10 Has your DDC developed code of conduct or manual for the office bearers? If yes, are these code of conducts or manuals ever been applied? If so how successfully? Please give examples of such use. 11 Do you know the annual budget, income and expenditure of your DDC or Municipality or VDC? 12 Do you know the sources of revenue of your DDC or Municipality or VDC? 13 What is the present financial condition/situation of your DDC or Municipality or VDC?
14 What powers or authority do the LBs have in relation to revenue raising, spending and recruitment and development of staff? Please provide details. 15 Could you rate the financial strengths and weaknesses of your DDC or Municipality or VDC?
16 What percentage of the DDC expenditure is made up by the DDC itself and the central government? 17 What percentage of the DDC income comes from the central government? 18 To what extent is the distribution of the funds from the central to DDC based on clear and fair selection? 19 Who approves the DDC budget? 20 Is DDC free to decide to use its funds and making expenditures? If yes, who delegated this authority to DDC? If no, please give reasons 21 Does DDC need to submit its accounts, final account reports, bills and vouchers to MoLD for auditing? 22 Does DDC have authority to sale its fixed properties, such as building, land etc.?
If no, give reasons 23 Who makes the decision for auctioning DDC's fixed properties like buildings and land?
33 The questionnaire was prepared in Nepali language and administered accordingly in fields. However, for the purpose of this dissertation, it has also been translated into English.
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24 Can DDC in its own initiative solicit financial assistance/grants from external donors? If no, please provide the name of the organization that can give approval to DDC to receive financial assistance/ Grants from external donors and the mechanism established for this purpose. 25 Who is responsible for financial management of DDC? 26 Has DDC prepared job description or ToR for its staff who manages the funds and accounts? If no, give reasons 27 Has DDC created an Accounts Committee as prescribed by LSGA,? If yes, please give its composition and major functions. If no, please give reasons. IV. LBs Compliance with the Government Laws, Rules, Regulations and Acts to ensure Accountability 28 How much do you know about the government Laws, Rules, Regulations and Acts including LSGA and other directives relating to LBs? 29 How far have these Acts, rules, regulations, and directives been helpful in achieving DDC’s objectives? 30 In your opinion, to what extent your DDC has been following LSGA and other government rules, regulations and Laws? If sometimes or never, please give reasons. 31 Have you got sufficient resources (human, material and financial) to undertake the responsibilities/ authority entrusted by LSGA? Also please mention about the advantages and disadvantages of this Act. 32 State the extent to which you and local people are making timely payment of their dues and taxes to LBs as required by LSGA and other appropriate laws of the country. 33 Is the general public aware of the provisions of LSGA for the empowerment of LBs and local development? 34 In your opinion, to what extent is the DDC capable to implement the authorities and responsibilities given by LSGA in agriculture, education and health sectors? 35 Please give your views on any conflicts you have noticed between the Acts, Rules, Regulations and Directives and other sectoral Acts. V. Functioning of DDC to Ensure Transparency 36 Has your DDC developed job description/code of conduct or ToR for all DDC officials? 37 What is the system adopted by the DDC to implement job description for the officials? If yes, what types of system being adopted? If no, explain the reason of why job description do not have prepared? 38 To whom DDC is accountable and responsible? 39 Has the DDC adapted any policy or system to make district people participate in planning, implementation, monitoring and evaluation of development activities in the district? If yes, what types of systems are being adopted? 40 To whom does the DDC summit its annual progress report? 41 Have the DDC members made their individual property public? 42 How frequent are the meetings of district council and DDC supposed to take place and how often have they been held in practice? 43 How frequently do the DDC members attend these meetings? 44 Who initiates discussions in the DDC meeting? 45 Who participates in the decision-making of the DDC meeting? 46 Who makes the final decision in the DDC meeting? 47 How decisions are mostly made in your DDC? 48 Generally, how often are DDC decisions implemented? Give reasons. 49 Has the DDC established any punishment mechanisms for those members who perform against the DDC mandates or decisions? If yes, state details of such mechanisms 50 Who records minutes of meetings in the DDC meeting? 51 Who keeps the minutes of meetings of the DDC meeting? 52 How often DDC minutes of meetings are circulated among members? 53 Do the common people know what is decided in the DDC meetings? If yes, how are they informed of the decisions? 54 How often do you find written something in the minute book when these were not decided at the meeting or these were decided differently?
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55 How often are the officials of district based government LAs, NGOs, CBOs, CSOs, donors and INGOs invited at the DDC meetings? 56 Are there any restrictions on public access to the official information, reports, budget reviews etc? If yes, please give examples of such restrictions 57 To what extent is information on government activities honest, reliable, timely and relevant? 58 Do the district level political parties have equal access to the media? 59 Are the journalists able to report freely and form independent associations? 60 What mechanisms exist for the local people to formally take up the matters of grievances against LBs officials? 61 What roles do the media play in airing the public grievances? VI. Co-ordination and Partnership among DDC, Government LAs, NGOs and CBOs for Sustainability of DDC Plans, Programmes and Projects 62 Have you (Government LAs, NGOs and CBOs) participated in and development activities carried out by DDCs in the last five years? 63 Have your NGOs and CBOs conducted programmes in financial partnership with the DDC? If yes, please provide details. 64 How has your NGO or CBO benefited from the financial partnership with the DDC? 65 How was it possible to launch financial partnership between your NGO or CBO, government LAs and DDC? 66 What changes in NGOs or CBOs activities were brought about by the financial partnership programmes among NGO or CBO, government LAs and the DDC? 67 In your opinion, to what extent is the DDC aware of NGO or CBO and government LAs activities? 68 Are there any co-ordination, co-operation and partnership mechanisms exist among your NGO, CBO, government LAs and DDC for better functioning? If yes, what are the mechanisms for co-ordination, co-operation and partnership among government LAs, DDC, NGOs, CBOs, Committees and donor agencies? And, how do you assess the functioning of these mechanisms? 69 What do you think about LBs and government LAs views and perceptions towards local NGOs, CBOs and CSOs working in district? 70 In your view, how far has the DDC been able to meet the local people’s expectations for local development and empowering them? Please provide reasons for your answers. 71 Are there any comments and suggestions with regard to co-operation, co-ordination and partnership among LBs, government LAs, NGOs, CBOs, CSOs and donors working in your district? VII. DDC’s Working Relationship with VDC and Municipality and Effectiveness of Programmes or Projects 72 Are there any programmes or projects implemented in partnership among DDC, Municipality and VDC during the last five years? If yes, please provide the details on programme, sector, investment, time period and other organizations involved. 73 In your opinion, how effective have been the programmes/project activities of your DDC to strengthen relationships with VDC and Municipality? Please give reasons 74 What are the internal and external constraints and problems of your DDC that, if solved, would improve its performance further. VIII. Devolution of Power and Authority to LBs to Promote Peoples' Participation for Effective and Equitable Service Delivery 75 How independent are the LBs of government from the centre, and how far do they have the powers and resources to carry out their responsibilities? 76 How well are these bodies of government organised to decide and implement policy effectively? 77 Is the central government able to over-ride the decisions taken by DDC in accordance with the wishes of their own electorate? 78 To what extent does the central government suspend or intervene in the affairs of the DDC for partisan political reasons? 79 What degree of autonomy do the DDC enjoy in relation to the central government both Constitutionally and in practice? 80 Does the central government intervene significantly in elections at the local levels? 81 How far are these levels of government subject to free and fair electoral authorisation, and to the criteria of openness, accountability and responsiveness in their operation?
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82 How extensive is the co-operation and co-ordination of government at the local level with relevant partners, Associations and communities in the formation and implementation of decentralization plans and policies? 83 How representative are the LBs of the population, which it serves? 84 How effective and equal is the protection of the freedoms of movement, expression, association and assembly? 85 How open and systematic are the procedures for public consultation on government policy and legislation? 86 How far do women, ethnic groups and Dalits participate in political life and public offices at the local level? 87 How equal is access for all social groups to public office, and how fairly are they represented within it? 88 How adequately is government resourced for the effective public service delivery? 89 How effective is the partnership among LBs, government LAs, NGOs, CBOs and private sector in the delivery of public services? 90 How accessible and reliable are public services for those who need them, especially the poor and marginalized groups of the society?
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ANNEX: E
CHECK LIST - KEY INFORMANT INTERVIEW Representatives of Central Level Government Officials, Political Party Leaders and Activists, Decentralization and Local Governance Experts, NGOs, CSOs, Human Rights Organizations, INGOs and Donor Community
I. Policy and Legal Framework 1) How far the government policy and strategy on decentralization provide the needs and regulatory framework for the local bodies (LBs) and government line agencies? 2) How independent are the LBs from the centre and how far do they have the powers and resources (human, material and financial) to carry out their responsibilities envisaged in Local Self Governance Act (LSGA)? 3) How well are these bodies organized to decide and implement government policy and plans on decentralized local governance effectively? 4) Are you aware about different Laws, Acts and Regulations related to decentralization schemes in the country? 5) Are the government rules, regulations and procedures related to decentralization contributing to increase the autonomy of the LBs? 6) How transparent, accountable and responsive are the functioning of LBs? 7) How open and systematic are the procedures for public consultations on government policy and legislation formulation and implementation? 8) How accessible and reliable are the public services for those who really need them especially the poor and marginalized groups of the society? 9) How far are service users and user groups including poor and vulnerable groups involved in the planning, provisioning and evaluation of public services being provided? 10) Please give your views on any conflicts you have noticed among different Acts, Rules, Regulations, Directives and other sectoral Acts of the government.
II. Institutional (structural) Framework 1) What are your views and perceptions about the existing number of LBs and whole state structure? How representative are the LBs and other state institutions of the population which they serve? 2) Has the present LB's structure of ‘two-tier system’ been effective for devolution of power and resources to the LBs so as to ensure the greater participation of the local people in overall development process? 3) How are the donors and INGOs helping government to create the institutional framework for promoting the decentralization in the country?
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III. Fiscal Framework 1) What is your view on present development planning, implementation and monitoring process and how different stakeholders are involved in this whole process? 2) What do you think about the existing financial situation of LBs in Nepal? 3) Are the LBs capable of performing the power and authority given by LSGA on fiscal and budgetary matters? Do they have capability to generate required internal resources on their own? Are they authorized to acquire the financial resources from other sources to execute their mandates effectively after the LSGA? 4) Do the LBs have a long term strategy or plans to increase their revenue base? Do they have fiscal monitoring and evaluation mechanism in place? 5) In your view, how can the central authority strengthen the LBs present financial status?
IV. Operational and Implementation Frameworks
1) Are the LBs capable of managing the financial and human resources in line with the development plans, projects or programmes and perform the sectoral functions as envisaged in LSGA? 2) What is the mechanism among LBs, government LAs, NGOs, CBOs, CSOs, INGOs and donors to share and disseminate the information on decentralization and local governance? 3) Do you think that the implementation process of development plans, projects/programmes and service delivery has improved post LSGA? Please give examples. 4) What are the mechanisms to maintain the transparency and accountability in the functioning of LB's for local development? 5) Is there any training or orientation provided to the office bearers and officials of LBs on projects or programmes implementation and management? To what degree the public is involved during projects or programmes implementation process? 6) How do the central agencies/ministries, government LAs, NGOs, CBOs, donors and INGOs assist the LBs during projects or programmes implementation? Do you feel there are changes in the type of assistance given to LBs after the LSGA? 7) Are the LBs capable of performing the power and authority given by LSGA on fiscal and budgetary matters? Do they have capability to generate the internal resources? Are they authorized to acquire the financial resources from other sources to execute their mandates effectively after the LSGA? 8) Do the LBs have a long term strategy or plans to increase their revenue base? Do the LBs have fiscal monitoring and evaluation mechanism in place? 9) How has the LSGA affected their respective roles and responsibilities as people’s representative?
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10) What was the degree of the involvement of locally elected representatives in planning, implementation and monitoring of the development plans and programmes of the villages and districts pre and post the LSGA? 11) To what extent are they able to respond to peoples needs for service delivery pre and post LSGA? 12) Have there been any changes in the projects or programmes monitoring and evaluation system post LSGA? Please give examples. 13) Does the central government have any mechanism to check directly with the people whether the goods and services have been delivered to the local people effectively and efficiently? 14) How should the progress of decentralization and local governance be monitored in the country? 15) How should the results of donor support and progress of decentralization and local governance optimally be disseminated?
V. Linkages, Coordination, Communication and Partnership Frameworks
1) Are there any coordination mechanisms among the government LAs, NGOs, CBOs, donors, INGOs and the LBs at the local level? Are there any consultations among them while prioritizing development plans, projects or programmes? 2) How extensive is the co-operation and partnership among LBs, government LAs, NGOs, CBOs, private sector and the local communities in the formation and implementation of government plans and policies on decentralized local governance to empower the people and to undertake local development activities? 3) How are the linkages maintained for projects or programmes progress reporting pre and post LSGA? 4) Has the participation of the grassroots NGOs, CBOs, CSOs and private sectors increased to the local development process after promulgation of LSGA? 5) How are the donors, INGOs and other development agencies helping government to promote the decentralization in the country? 6) In your view, is there any match or mismatch of the government policies and strategies on decentralization and local governance with that of donors and INGOs? 7) How can, you think, the donors support the government’s decentralization plans and Processes more efficiently and effectively? 8) Have the government plans and policy to implement the decentralization schemes been successful so far and are there any specific spaces for donor communities and INGOs to join hands for the promotion of decentralization processes? 9) Has the decision making process of central government changed after LSGA regarding the local development and service delivery at the local level? 10) Have you noticed any changes or improvements in plans, policies or programmes implementation or administration pre and post LSGA.
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VI. Social Inclusion and Diversity Framework 1) Are there any guidelines set out by the central government for the plans and programmes targeted specifically to the poor and marginalized or disadvantaged groups? 2) To what extent are development plans and programmes targeted at the marginalized and disadvantaged groups at the local level? Do you think more social inclusion and diversity sensitive decisions have been made after LSGA's implementation? 3) Do you feel that the poor, marginalized and disadvantaged groups have become more active at the local level after the LSGA? Could you please give some examples? 4) How far do women, ethnic groups and Dalits participate in political life and public offices at the local level? 5) How free are the NGOs, CBOs and CSOs to organize and represent their members’ interests? How accountable are the NGOs and CSOs to their members, and how free are they from corruption?
VII. Any other comments/suggestion for implementation of Decentralization Schemes in Nepal
1) What do you think is required to make the decentralization process more effective in respect to i) better decision making, ii) promote social inclusion and peoples' participation, and iii) better delivery of goods and services to maintain transparency, accountability and sustainable local development? 2) What do you see as the key capabilities to implement the decentralization process more effective at the local level in reference to: i) civil service and whole bureaucracy and ii) inclusive and representative political parties and leadership. 3) What do you think is required further to make the decentralization and local governance a reality? 4) Any other comments or suggestions to make decentralization and local governance process a success in Nepal?
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