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Nepal's Road to Federalism NEPAL’S ROAD TO FEDERALISM From the Perspective of Grassroots Democracy Damodar Adhikari NEPAL’S ROAD TO FEDERALISM From the Perspective of Grassroots Democracy Damodar Adhikari Copyright © 2020 author All rights reserved. Credit must be provided to the author and source of the book when the content is quoted. No part of this book may be reproduced in any form by any electronic or mechanical means (including photocopying, recording, or information storage and retrieval) without permission in writing from the author. Bibliographical reference 1. Nepal 2. Decentralization 3. Federalism Case Studies 4. Federalism 5. Social Capital 6. Grassroots Democracy 7. Participation 8. Democratic Governance 9. Maoist Insurgency 10. Multi-level Governance 11. Participatory Planning. Suggested citation Adhikari, D. (2020). Nepal’s Road to Federalism: From the Perspective of Grassroots Democracy. RTI International, NC. Author's contact address E-mail: [email protected] Skype: damodar_adhikari ISBN: 978-9937-0-6543-6 Published by Research Triangle Institute, Kathmandu, Nepal. RTI International is a registered trademark and a trade name of Research Triangle Institute. 3040 East Cornwallis Road, PO Box 12194 Research Triangle Park, NC 27709-2194, USA URL: www.rti.org RTI International is an independent, nonprofit research institute dedicated to improving the human condition. We combine scientific rigor and technical expertise in social and laboratory sciences, engineering, and international development to deliver solutions to the critical needs of clients worldwide. Published and printed in Kathmandu, Nepal. i Author’s note The book, which is in your hand, is the product of a long academic journey from doctoral to post-doctoral research work. My previous book ‘Towards Local Democracy in Nepal: Power and Participation in District Development Planning in Nepal’ was published by the SPRING Centre, University of Dortmund (now Technical University of Dortmund, Germany) in 2006 on behalf of their international university network. For some time, I have intended to update the politico-administrative context of the book and add a few chapters on federalism. However, when I started working on it with the guidance of Prof. Dr. Karsten Zimmermann, Head of the Department and Dean of the Faculty at the TU, Dortmund, I realized that updating the older book, published in 2006, is not easy. Some of its chapters are no longer relevant in the dynamic political and administrative context of Nepal as it exists today. I discussed these concerns with Dr. Zimmerman and decided to write a different book. I must mention that some parts of the current book, especially the theoretical discourse related to decentralization and democratic governance, are updated and included from the previous work. Other chapters are entirely new. The result is a more up to date and inclusive account of the federal experience and the way forward for the country. The book aims to support policy makers, development workers, researchers and the general public in understanding the new federal structures, multi-level governance and their functions, and cooperative relationship with reference to contemporary literatures and the experience of other federal countries. I sincerely believe that the book will contribute to enhancing the conceptual understanding and key elements of federalism together with useful insights from the case studies presented in the book. It is my hope that the book will help government officials and other stakeholders to lead the experiment in federalism in the desired direction and implement it effectively. It is also expected that the book will contribute to institutionalize the federal system in favor of fostering grassroots democracy, strengthening and utilizing the social capital of Nepal, improving service delivery, and harmonizing the relationship among different levels of governments in the long run. Completing the book could not have been possible without the guidance, support and inspiration of several scholars from Nepal and abroad. I cannot name everyone individually here due to the sheer number of people who helped me. I, therefore, would like to acknowledge their contributions collectively. A number of colleagues and officials working at different levels of the government contributed by sharing their observations, experiences and learning. They also emphasized the need for such a book for the federal process to be successful in Nepal. I am indebted to all of them. I am immensely grateful to my mentor and professor Dr. Karsten Zimmermann for his academic guidance and support during and after my stay in the TU Dortmund, Germany. He generously reviewed the manuscript and provided invaluable comments before I could finalize the book. I would also like to acknowledge the support of German Academic ii Exchange Service (DAAD) for carrying out extensive research for this book. I would like to appreciate the contribution of my colleague Mr. Prahlad Ghimire for his enthusiastic support to give final shape of the book. Finally, I would like to thank Dr. BP Giri for his editorial advice and support during the preparation of the manuscript of the book. I am equally indebted to Dr. Eric M. Johnson, Director of Research, Governance and Economic Development Division and my supervisor at Research Triangle Institute (RTI) and Dr. Richard Reithinger, Vice President of Global Health Division, RTI for their encouragement, support and guidance throughout the research period. Finally, I am grateful to Mr. Paul Weisenfeld, Executive Vice President and Dr. E. Wayne Holden, President, RTI International for providing me a Professional Development Award (PDA) and sabbatical leave to carry out the research and writing for this book. I feel very proud and honored to be a staff member of RTI International for 13 years (2006-2019) in my career in different capacities. Damodar Adhikari, PhD Kathmandu, Nepal iii Foreword Damodar Adhikari’s book, Nepal’s Road to Federalism: From the Perspective of Grassroots Democracy, is both timely and necessary. RTI International was pleased to support it, and to have Damodar as an employee for the past 13 years. This book reflects the core mission of RTI: to improve the human condition by turning knowledge into practice. Damodar’s book provides knowledge that is well researched and carefully presented, from within Nepal, and in analysis of case studies from abroad. It then applies that knowledge and makes recommendations for practice. This is what RTI is all about. It is my hope that policy makers, development partners, donors, researchers, practitioners, and local leaders will read it, and use it to improve the human condition in Nepal. As Damodar notes, Nepal has made progress in fighting poverty and improving lives, despite periods of conflict, political uncertainty, and cataclysmic natural disasters. It now has enshrined and embarked on a promising, devolved political structure that gives more power to local areas and better reflects Nepal’s economic, geographic, and ethnic diversity. In some ways, these changes came 'overnight,' as Damodar notes – and are in need of careful consideration, roll-out, and continued study. In other ways, they are more than 100 years in the making and reflect deep Nepalese cultural and political histories. I am confident that this book will aid in the recent and longer journey and should be the touchstone for further research and analysis along the way. Congratulations to Damodar, and all the best wishes to him and the Nepalese people from their RTI family. We look forward to continued work and progress in Nepal. Eric Johnson, PhD Director of Research, RTI International v Preface Scholars working in the field of democratic governance see a world-wide trend towards decentralization and hopes are great that decentralization and devolution will help solve a range of societal problems, such as democratic deficit, lack of efficient and effective public service delivery and unbalanced regional development. Depending on the implementation and the overall institutional design of the system, decentralization may offer a lot of benefits but at the same time weaken the coordination of public policy across different levels of government. In fact, seen from a functional perspective, the modernization of the state often takes shape in the form of regionalization, decentralization or administrative de-concentration. But decentralization has taken place in different forms in different societies and it happens rarely that empowerment of subnational or local levels goes hand in hand with administrative decentralization (i.e. strengthening the administrative or financial capacity of local governments). In many cases, decentralization is not accompanied by adequate financing. Decentralization may enhance the political or administrative autonomy of local governments but is often driven by austerity measures in the post-crisis consolidation stage. As countries as diverse as Germany, Canada or Brazil demonstrate, there seems to be no optimal design of federal systems and decentralization schemes. The outcome and purpose often depend on the political and cultural history of the state under reform. And of course, size matters as well. In this context, some scholars point to the virtues of asymmetric decentralization as an alternative. Asymmetric treatment of subnational governments may help countries to avoid conflicts that may arise when fiscal equalization or regional development policies are at stake. This, in turn, may provoke resistance
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