Corruption and Underdevelopment in Nepal: A Content Analysis

Abstract

Many studies show that corruption negatively affects public investment, reduces government revenue, misuses public resources, and decreases expenditure and quality of life for the people. It is also considered the leading cause behind the low quality of infrastructure, damaging social, economic, political, and infrastructural development. Similarly, corruption also hinders development because it distorts resources affecting economic growth and service delivery. So, corruption and underdevelopment have a positive correlation. Corruption has been a major driving force behind underdevelopment in many countries. This article is written based on secondary data. The content of news published in newspapers was analyzed during the study. This paper reveals the prevalence of high levels of corruption in the governance system and development activities is the main reason behind the underdevelopment in Nepal.

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98
Dipesh Kumar Ghimire
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Dhaulagiri Journal of Sociology and Anthropology
This work is licensed under the https://creativecommons.org/licenses/by-nc-sa/4.0/©Dipesh Kumar Ghimire
Email:dipesh.ghimire33@gmail.com https://orcid.org/0000-0002-6687-606X
Corruption and Underdevelopment in Nepal: A Content Analysis
Dipesh Kumar Ghimire
Introduction
Corruption has been broadly dened as the misuse
of public oce or authority for private gain. Amuwo
(2005) describes corruption as mismanagement of public
funds for private gain. Similarly, underdevelopment is a
state of dreadful economic condition of the country.
Underdevelopment refers to a weak and vulnerable situation
of the political organization, economic characteristics, and
social institution in the country. Myrdal (1974) argued
that an underdeveloped country has grave deciencies and
weak status of economic, social, and political power.
The World Bank (2017) indicated that Nepal is an
underdeveloped country. It ranks 195th in per capita
GNP out of 216 countries. Its life expectancy also ranks
103rd out of 118 countries. Total 17.4 percent of Nepali
people are multidimensionally poor in 2019 (NPC, 2021).
Similarly, an estimated 31.2 percent of the Nepalese living
closer to poverty is at high risk of falling into the extreme
poverty trap (World Bank Group, 2021). A total of Rs.
92 million rupees of loans in 1973/74 has signicantly
increased to Rs. 843 billion in mid-March of 2018. It has
Article Info
Received: August 6, 2022
Received in revised form: December 17, 2022
Accepted: December 19, 2022
Available online: December 31, 2022
DOI: https://doi.org/10.3126/dsaj.v16i01.50979
shot to Rs. 1.5 trillion in mid-March 2021. The loan has
increased by 776 billion over the last three years which is
a whopping increase of 88.5 percent (MoF, 2021). These
data show Nepal seems to have gradually plunged into the
vicious circle of underdevelopment. In this context, the
main objective of this paper is to explore the scenario of
corruption and its relation to underdevelopment.
The article is divided into six sections. The rst section
is an introduction. The second section describes the
research methods. The third one is about understanding
corruption, development, and underdevelopment, and the
fourth section critically looks at the development of
underdevelopment in Nepal. Similarly, fth is corruption
and development of underdevelopment in Nepal and a
subsequent conclusion has been drawn in the nal section.
Research Methodology
In this study, a qualitative method was chosen as the
research method to collect secondary data from the sources as
well as for data analysis. The content analysis was applied to
collect data and information from the book, journal, annual
Abstract
Many studies show that corruption negatively aects public investment, reduces government revenue, misuses public
resources, and decreases expenditure and quality of life for the people. It is also considered the leading cause behind the
low quality of infrastructure, damaging social, economic, political, and infrastructural development. Similarly, corruption
also hinders development because it distorts resources aecting economic growth and service delivery. So, corruption
and underdevelopment have a positive correlation. Corruption has been a major driving force behind underdevelopment
in many countries. This article is written based on secondary data. The content of news published in newspapers was
analyzed during the study. This paper reveals the prevalence of high levels of corruption in the governance system and
development activities is the main reason behind the underdevelopment in Nepal.
Keywords: corruption, development, economic growth, governance, Nepal, underdevelopment

99
Dhaulagiri Journal of Sociology and Anthropology Vol. 16, 2022, pp. 98-108
report of CIAA, OAG, laws, plans, and policies about
development, corruption, and other relevant sources. The
content of news published in newspapers was also analyzed
during the study. The secondary data were categorized, and
themes were prepared. After that, the data were presented in
descriptive and analytical methods. For the presentation of
data, table, case study, and descriptive methods were used.
For analysis, descriptive and analytical methods were used.
Understanding Corruption, Development and
Underdevelopment
Scholars (e.g., Amuwo, 2005; Obayelu, 2007) dene
corruption as the exploitation and misuse of entrusted
power, public position, and resources for private gain.
Klitgaard et al. (2000) argued that corruption is an illegal
activity. According to Transparency International (2020),
corruption is the abuse of entrusted power for private gain
and benets. Ogundiya (2009) characterized corruption as
moral decay and abuse of public oce in the return for
private gain. In the meantime, Salisu (2002) describes
corruption as the mismanagement of public funds for
private gain. Gupta (1995) contributed to the debate on
corruption and examines how lower-level ocials execute
their duties. He nds that conventional distinction between
private and public inapplicable to an Indian context.
Gupta (2012, p.80) denes corruption as ‘activities that
may be illegal, violate societal norms or meet with moral
disapproval and invocation of right behavior’. Similarly,
corruption serves as a site for debates promoted by
conicting systems of moral and ethical behavior’. The
term 'development' is used by sociologists to explain
industrialization, economic growth, high level of income,
quality health and education facilities, and high standard
lifestyle. Todaro and Smith (2011) argue that development
has been understood as achieving sustainable rates of
growth of income per capita to enable the nation to expand
its output faster than the population growth. Chamber
(1997) gives more emphasis on "good change" in society.
Sen (1999) examined that development means standing
against inequality and injustice to allow freedom.
Rist (2007) argues that development means increasing
consumption and economy in the society. Chang (2009)
focuses on material progress in society. Myers (1999)
considered development as a positive change in the whole
of human life materially, socially, and spiritually. So, we
can say that those countries that have not yet achieved
these objectives are said to have 'underdevelopment’.
Myrdal (1974) argued that underdeveloped countries
are very weak in economic, infrastructural, and social
development. The underdeveloped countries are not able to
utilize the resources for the benet of the nations. Rodney
(1973) argued that underdevelopment is the lack of skill
and capacity, greater freedom, creativity, self-discipline,
responsibility, and material well-being. While reviewing
the literature related to development, it can be dened as a
process that creates progress, growth, positive change, or
addition of economic, social, physical, environmental, and
demographic components.
While reviewing the literature we can identify the
few basic characteristics of underdeveloped countries.
Underdeveloped countries have low economic growth,
low level of capital for investment and high level of
unemployment ratio (Rotberg, 2004). The economy is
completely based on production of raw materials and does
not have a manufacturing industry. Similarly, there is no
quality education or health-care facilities. There is famine
and malnutrition and poor conditions of communication,
transportation facilities and other infrastructure as well
(Rist, 2007).
There are many theories that emerged to identify
the causes of underdevelopment, one of the inuential
perspectives is the modernist approach. It believes that
underdeveloped countries need to follow the development
approaches and strategies of the highly industrialized
countries before they can develop (Rostow, 1960). In
contrast, the dependency school of thought always sees
that the exploitation of the underdeveloped countries by the
core developed countries and unequal exchanges between
core and periphery countries were the main reasons for the
underdevelopment (Amin, 1976). He further argued that
rich countries are responsible for the underdevelopment of
third world countries.
These both schools of thought have their own
strengths and weaknesses. In the meantime, there is a
new school of thought which claims that corruption
leads to underdevelopment. Awojobi (2014) assesses the
relationship between corruption and development and nds
out that corruption remains the core barrier to development
of a society. Nageri et al. (2013) also view that corruption
is the misery of development in the third world. Tanzi and
Hamid (1997) found that corruption impacts negatively on
public investment, reduces government revenue, decreases
expenditure on operations and maintenance and reduces
the quality of life.
According to Uneke (2010), corruption is damaging
to social, political, and economic development. Shleifer
and Vishny (1993) empathized that corruption hinders
development because it makes resources ineective.
Mauro (2006) identied that corruption decreases private
investment, misuses the public resources, and alters the
structure of government expenditure and it also aects
economic growth and development badly. Lawal and Tobi
(2006) assert that corruption causes a serious development
challenge in the third world.
Bamidele (2013) argues that corruption is the main
cause of underdevelopment. He further adds that corruption
is one of the indicators of state failure, accompanies
neopatrimonialism and helps to bring states to failure.
Falola’s (2005) study shows that corruption is the main
responsible factor for Nigeria’s underdevelopment in all
sectors. While analyzing the literature it is understood

100
Dipesh Kumar Ghimire
that corruption is an important factor in promoting
underdevelopment in a country.
Debates on Development and Underdevelopment
in Nepal
Underdevelopment in Nepal has a long history
whose roots lie in the continuous and uneven process of
peripheralization. Mishra (1987) emphasizes the socio-
political relation of Nepal with British India as the reason
for this. And he believes that unequal status between India
and Nepal in the Sugauli Treaty of 1816 and the Friendship
Treaty of 1950 led to the underdevelopment in Nepal.
Bhattarai (2003) also argues that Nepal’s underdevelopment
is essentially a problem in the transition of a pre-capitalist
society, hybridized under its retrograde internal social
structure, but increasingly mediated by exogenous capitalist/
imperialist interests. Blakie, et al. (1979) explained the
domestic causes of underdevelopment in Nepal. During
both the Rana and Panchayat regimes, the government
bureaucracy was concerned with maintaining internal
security and to appropriate the surplus produced by farmers
and others in the form of taxes, and prots made by traders,
to maintain the state apparatus and the continued control of
the ruling classes.
Nepal is land-locked between two big economic
powers China and India. Panday (2009) considers the
status of land-locked Nepal as a constraint to development.
Nepal has suered from higher border prices of imports
and exports of goods due to transportation costs. However,
Luitel (2009) disagrees with it. She argued that other land-
locked countries like Switzerland, Austria etc. have got
compensating advantages but Nepal still yet to get any
such kind of advantages. In the meantime, other scholars
(Pathak, 2017; Panday, 2011) assign foreign aid to the
growing dependency of Nepal.
While studying various literatures on the
underdevelopment of Nepal, two conclusions can be
reached. The rst reason is external factors. According to
this perspective underdevelopment of countries is typically
the historical product of past and continuing socio-economic,
political, and other unequal relations between satellite and the
metropolitan countries. From the various empirical evidence,
it seems that the unequal business and market relations also
aect the underdevelopment of Nepal. The second one is
the internal factors like modernization, geography, and land-
lockedness that account equally for the underdevelopment
of a country. Similarly, corruption is one of the biggest
problems in Nepal today. However, there is inadequacy of
research on the negative impact of corruption on the country's
development.
Corruption and Underdevelopment in Nepal
Various studies (e.g., Bajracharya, et al. 2019; Dahal
et al. 2000, and Panday, 2018) show that the high level of
corruption is a major factor for underdevelopment of Nepal.
Dahal et al. (2000) have argued that rampant corruption
played an important role in the underdevelopment of
Nepal. Dahal (1998) also argued that rent seeking politics,
corrupt bureaucracy and smuggling have jeopardized the
economic progress and development of Nepal. Bajracharya,
et al. (2019) argue that there is political involvement even
in simple procurement decisions, resulting in the misuse
and diversion of public funds for unauthorized purposes.
Because of corruption, project implementation has
suered, and desired goals have not been achieved. The
cycle of development has been hindered by the high level
of corruption in Nepal. Corruption always erodes trust,
weakens democracy, hampers economic development, and
further exacerbates inequality, poverty, social division, and
the environmental crisis.
The Nepali bureaucracy, politicians, and the business
sector are most engaged in corruption. It is really a big
challenge to the development of modern Nepal (Ghimire,
2018a; Upadhaya, 2003). No work speeds up without bribes
and corruption in public service delivery and development
works. Corrupt activities have adverse impacts on the
development activities as well as economic growth of the
country (Subedi, 2005).
The studies show that underdevelopment is a by-
product of corruption (Rose-Ackerman, 1999). In Nepal,
funds that are allocated to the development of the country
are mismanaged by political and public ocials. Since
the establishment of republican system in Nepal in
2006, corruption has constituted a major hindrance to
development in the country (Ghimire, 2018b). For the past
15 years budget allocations for infrastructure development
have not yielded any positive achievement. The points
stated below make clear on the level of increasing
corruption in Nepal.
Increasing the case led by CIAA in Special Court
Data show that the number of cases on corruption led
in the court by Commission for the Investigation of Abuse
of Authority (CIAA) by investigating the complaints have
been increasing. The increasing number of cases led by
the CIAA in the Special Court clearly shows the increasing
trend of corruption in the country. CIAA had led 144 cases
of corruption in the Special Court in the scal year 2015/016
which increased to 441 in the scal year 2019/020 (Figure 1).
Figure 1: The trend of case led by CIAA in special court in
ve years
Source: CIAA, Annual Reports

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Dhaulagiri Journal of Sociology and Anthropology Vol. 16, 2022, pp. 98-108
The Special Court made decisions partially or fully
in accordance with the demands of CIAA. The CIAA has
had considerable success in the cases it has led in Special
Courts. According to the decisions, the conviction rate has
increased by more than 60 percent each year (Table 1).
Table 1:Conviction rate in accordance with the decision of
the Special Court
S.N. Fiscal Year Decision
number
Convic-
tion Rate
Percent
1 2015/16 59 52 88.14
2 2016/17 98 74 80
3 2017/18 279 167 60
4 2018/19 174 118 67.82
5 2019/20 197 167 84.8
Source: CIAA annual report of FY 2019/20
We see the high success rate at the Special Court
if we see the number of verdicts. The success rate was
60 percent in 2017/18 which was the lowest while the
maximum was seen in 2015/16 at 88.14 percent. From this
it is seen that CIAA has been thoroughly investigating and
getting success in the cases led at the Special Court.
Increasing Arrears
The arrears persisting in the economic system helps
understand the nancial irregularities and malpractices
in the governance system. The arrears indicate nancial
mismanagement in public institutions. While all the
arrears do not indicate corruption, the increasing arrears
have negative impacts on good governance. According
to a report published by the Oce of the Auditor General,
there is a huge arrears amount (Table 2).
Table 2:Arrears amount in the local government in the last
5 years (in thousand)
Ye ar Tota l
amount of
Audited
Arrears gures
To be
recover
To be
regular-
ize
Unsettled
advances
Tota l
2020 5171640 174068 203905 332635 710607
2019 5160920 320352 292542 450486 1063380
2018 4687910 172594 333507 442053 948154
2017 1295449 404389 244032 240138 888559
2016 1043238 43362 193382 251044 487788
Source: Annual reports of Oce of the Auditor General
The table 2 gives a clear picture of the increasing
arrears in Nepal. Looking at the data from 2016 to 2020,
it seems that the arrears have been increasing annually.
A large portion of arrears must be recovered. The arrears
which must be recovered can be considered corruption.
Malpractices in Construction
Physical infrastructure development is taken as the
backbone of development of a country. The quality
physical infrastructure development helps improve the
Ministry/Department Incomplete
contract
Incomplete
contracts
with no
extension
of time.
Contract
amount (in
10 million)
Mobilization
(20%) (in 10
million)
Performance
bond (5%) (in
10 million)
e Ministry of Physical Infrastructure and
Transportation/ Road Department
906 623 2076 415 104
Ministry of Urban Development/ Department of
Urban Development and Building Construction
442 171 693 139 35
Ministry of Energy, Water Resources and
Irrigation/ Department of Water Resources and
Irrigation
235 94 1866 373 93
Ministry of Federal Aairs and General
Administration/ Department of Local
Infrastructure
97 75 660 132 33
Ministry of Energy, Water Resources and
Irrigation/ Nepal Electricity Authority
91 45 3843 769 192
Ministry of Culture, Tourism and Civil Aviation 37 6 727 145 36
Ministry of Communication and Information
Technology
23 8 1546 309 77
Ministry of Water Supply/ Department of Water
Supply and Sewerage Management
17 10 390 78 20
Tota l 1848 1032 11801 2360 590
Table 3: The discontinued development projects
Source: CIAA, 2019

102
Dipesh Kumar Ghimire
development status of the country, increase in economic
activities, and prepare the basis for easy transportation
as well as proper service delivery. However, there seems
to have extensive malpractices and mismanagement in
physical infrastructure development works in Nepal.
The expenditure modality in every public sector in Nepal
has contributed to a misuse of huge amounts of money. The
trend of taking 20 percent of project mobilization amount of
contract and not commencing the works has been increasing
in the public oces. According to the data of CIAA, a huge
amount has been misused as a mobilization amount from
big contracts in various ministries and departments (Table
3).
Studying the documents and descriptions provided
by the related oces to the CIAA, 1848 contracts with
contract amount of 1.18 trillion rupees are incomplete
within the contract deadline. Among them, 1032 (55.84%)
contracts were found to have not extended the contract
time. The contractor receives a 20% mobilization amount
after signing the contract. The government of Nepal has
provided 236 billion rupees as mobilization amount to the
contractors. Time extension has not been done for these
1032 projects and the contracts do not have bank guarantee
for the already paid mobilization amount as well. Similarly,
the contract amount is of concern for those contracts for
which time has been extended without bank guarantee.
Upadhyaya and Ghimire (2017) found out that the
political nexus is the main reason for not completing the
contract on time. Each contractor has a connection with one
big political party or its leader. They are involved in politics
from the party and provide donations to the party as well. In
return, the contractors are protected from the party in even
the criminal acts. Several contractors have been elected as
the peoples’ representatives in federal, provincial, and local
levels. Not only the political party but also the voters have
been bought with money. While they are in the government,
there is no possibility of the contractors getting punished.
Many of the contractors have provided advantages to the
powerful politicians and have been getting their protection.
A Terrible Picture of Corruption
The trend of politicizing corrupt activities have a
long history in Nepal. The big scandals of corruption
come into publicity but remain uninvestigated. There is
involvement of political parties, state mechanisms, and
other stakeholders for this. Majority of big corruption
scandals that came into publicity in Nepal for the last 15
years have remained uninvestigated.
After the People’s Movement of 2006 to 2021, a total
of 31 corruption cases involving more than a billion rupees
each came into publicity. It does not include corruption
scandals of less than one billion rupees. This data shows
that corruption and economic mismanagement are
increasing alarmingly in Nepal. However, no investigation
was carried out in most of these cases (Table 4).
Table 4: Corruption scandals in the last one decade
involving more than a billion rupees each.
S.N. Case Tentative
Amount
1NCell scandal 37 billion
2Swiss Bank scandal 52 billion
3Tax settlement commission
scandal
21 billion
4Nepal Telecom 4G procurement
scandal
11 billion
5Chaudhary Group getting tax
exempt scandal
7 billion
6Widebody plane procurement
scandal
4.35 billion
7Budhigandaki hydro project
scandal
9 billion
8Illegitimate property of Lokman
Singh Karki scandal
5 billion
9Bhrikutimandap land lease
scandal
5 billion
10 Money distributed to the party
cadres
5 billion
11 Corruption in Maoist
cantonment scandal
4 billion
12 Loot in manpower companies 4 billion
13 Madhya Pahadi Lokmarga
scandal
3.2 billion
14 Land purchasing case in Nepal
Oil Corporation
3 billion
15 Upper Tamakoshi illegal
verication scandal
3 billion
17 Irregularities in land purchase
and building construction in
Nepal Red Cross Society
3 billion
18 Corruption in Chandragiri Cable
Car agreement
2.8 billion
19 Corruption in Hulaki Highway 2.5 billion
20 Pappu Construction scandal 2.5 billion
21 Corruption and irregularities
in Melamchi Drinking Water
Project
3 billion
22 Corruption during Sugaratna
Kansakar's tenure in NAC
1.8 billion
23 Illegitimate property of former
Chief of Nepal Army Rajendra
Chhetri
1.5 billion
24 Corruption in driving license
printing press
1.5 billion

103
Dhaulagiri Journal of Sociology and Anthropology Vol. 16, 2022, pp. 98-108
25 irty-eight quintal gold
smuggling
1.5 billion
26 Himalayan Airlines approval and
tax-exempt scandal
1.4 billion
27 False VAT bill scandal 10 billion
28 Illegal fees in medical college 3 billion
29 Corruption in import of low-
quality chemical fertilizers
1.53 billion
30 Lalita Niwas scandal 13 billion
31 Loss of Revenue in Department
of Mines and Geology
1.24 billion
Tota l 223.82
billion
Source: Content Analysis of National Newspapers
The information provided in Table 4 is based on the
news published in the national daily newspapers in Nepal
for 15 years. Most of the cases of corruption that have
been published by the national newspaper but not been
investigated and proceeded for action by the responsible
government bodies in the last decade are covered in
the table which add up to more than 223.82 billion
rupees. Questions have been raised on whether there is
involvement and/or direct participation of political party
leaders in those scandals.
Nepal is leaking huge amounts of money due to such
corrupt activities. As a result, there seems to be a lack of
resources required for economic growth and development.
The high level of economic irregularities and corruption
have directly aected the development of the country.
Silence of CIAA
CIAA stands as a constitutional body for corruption
control in Nepal. This institution has the right to proactively
investigate cases of corruption and le the cases. However,
CIAA has not been able to fulll its constitutional
responsibility. CIAA remained void of ocials from
October 2006 to May 2013. During this period, the
political parties did not appoint ocials in the CIAA. Due
to this, CIAA was not able to make a case against the big
corruption scandals and investigate the involved. After
May 2013 too, the political parties appointed the ocials
in CIAA in their favor to fulll their own vested interests.
They have restrained the political corruption cases from
being within the premises of investigation. As a result,
Nepal has been facing the bitter situation of corruption
cases being publicized but remaining uninvestigated.
Several corruption cases which came into publicity
have been investigated by the parliamentary committees
and other special committees. They have resolved the
cases as corruption and have sent recommendations to
the CIAA for further investigation. Similarly, some of the
cases have been complained with proof. However, many
of these scandals have not been investigated by the CIAA.
There seems to be involvement of political leaders in the
cases which have not been investigated (Table 5).
Table 5 above gives information on some of the
complaints to the CIAA which were not investigated.
The trend of leaving several scandals uninvestigated
has been increasing. While the major corruption cases
remain uninvestigated, on the one hand a large portion
of national resources are being misused and impunity
has been institutionalized on the other hand. Everyday
cases of corruption are being made public with evidence.
However, investigations and ling of cases have not been
done in such scandals. On the one hand, this has increased
exploitation and misuse of public money and resources,
and on the other hand, it has made the construction work of
poor quality. Nepal is not able to make a signicant leap in
development because of the corruption (Ghimire, 2018b),
The same actors have been involved in the corruption
cases one after the other due to impunity. However, no
action has been carried out against the corrupt ocials and
politicians. While a big portion of national resources which
would otherwise be used for socio-economic and physical
development causes is being misused, it has negative
impacts on the development process of the country. The
few developments which have been commenced are
S.N. Case Description Irregulari-
ties amount
Status
1Irregularity of Cha-
melia hydro project
Parliament's Public Account Committee (PAC) had
given direction to CIAA for investigation of irreg-
ularities in Chamelia Hydropower Project on 3
December 2014. e cost for concrete work in the
tunnel was 14100 rupees per cubic meter while the
bill was made of 41500 rupees per cubic meter. e
meeting of executive committee in chairmanship of
the then Minister for Energy Radha Gyawali had ap-
proved a variation of 1 billion, 93 million and 800
thousand rupees.
550 million
rupees
e investigation
did not commence.
Table 5:Some complaints of corruption in CIAA which have not been investigated.

104
Dipesh Kumar Ghimire
2Taragaun
Development
Committee
The share executing committee decreased the 30
percent government share of Taragau Regency
Hotels Limited to 9 percent. Similarly, more than
100 ropani of land of the hotel was sold illegally.
The parliament's international relation committee
had investigated on this case in chairmanship of
the then member of parliament Agni Sapkota. The
committee had concluded of irregularities in the
case.
180 million
rupees
No investigation
was done.
3 Shivaraj Shrestha
Scandal
A huge amount of money was illegally taken abroad
due to a decision made by the Deputy Governor of
Nepal Rastra Bank, Shivaraj Shrestha. A committee
was formed by the Government to investigate this
case. Shrestha was suspected of being involved
in money laundering activity and the committee
recommended the government in February 2020 to
take action on this case.
1.92 billion
rupees
e cabinet
decided that he
did not need to be
punished.
4 Land of Nepal Trust e land in Durbarmarg under the ownership of
Nepal Trust was given to amsherku Trekking for
building construction and giving the building in
rent. e agreement was made in a lower amount
than it was supposed to be made.
4.86 billion
rupees
e CIAA did not
take any action
against this case.
5Land purchasing
scandal in Nepal Oil
Corporation
e Auditor General, Public Procurement
Monitoring Oce, and parliamentarian committees
claimed on the irregularities in purchasing land by
the Nepal Oil Corporation.
100 million
rupees
CIAA did not take
any action against
the complaint.
6Gokul Baskota
Scandal
e audio proof of Gokul Baskota asking commission
on procurement of security printing press came into
publicity.
700 million Gokul Baskota
resigned from
minister post, but
CIAA did not take
any action against
him.
7Wide body purchase
scandal
e PAC had investigated the procurement of
wide body by the NAC, found irregularities and
recommended for CIAA to take action against NAC.
e news of Airbus Company in France oering 349
thousand Euros as commission to NAC came into
publicity. e parliament's committee prepared a
report and in January 2019, recommended CIAA for
investigating and taking action against NAC.
4 billion 355
million 600
thousand
CIAA neither
investigated nor
asked questions.
8Ganesh apa
Scandal
e then chairman of ANFA, Ganesh apa was
convicted of corruption and complaint was registered
in 2014 to CIAA and Parliament's PAC.
580 million CIAA did not
take any action.
To save him from
parliamentary
investigation, his
brother Kamal
apa gave him a
seat of proportional
member of
parliament.

105
Dhaulagiri Journal of Sociology and Anthropology Vol. 16, 2022, pp. 98-108
9 Omni Scandal e MoHP made an agreement with Omni
Business Corporate International in March 2020 for
purchasing health equipment focused on COVID
19. e Parliament's Public Accounts Committee
established that there had been irregularities in the
purchase.
950 million
rupees
Some people were
questioned by the
CIAA but did not
investigate further.
10 e former Chief of
Army Sta, Rajendra
Khatri Scandal
A complaint was made to the CIAA regarding the
investigation of property of a former Chief of Army
Sta, Rajendra Khatri. ough CIAA do not have
right to investigate against Nepal Army stas, the
law does not restrict CIAA to investigate on corrup-
tion case of retired stas.
150 million
rupees
e CIAA did not
commence any in-
vestigation on this
case.
11 Track Bed Tender
Scandal of Train De-
partment
e Train Department had given notice for tender
for construction of track bed in Jhapa to Sunsari
railway track section. According to the conditions
specied, only limited contractors could participate
in the bidding process. e contract amount was 34
billion rupees. e complaint was made that this led
to a tremendous loss to the national treasury.
10 billion
rupees
CIAA did not do
any investigation
on this complaint.
12 Chase Air Scandal Hongkong Rana Magar was appointed as the chair-
man of NAC in 1998. He made an agreement with
Chase Air to rent a Boeing 757. e Chase Air had
neither an oce nor a Boeing with it.
Irregulari-
ties of 100
million ru-
pees
CIAA did not carry
out any investiga-
tion.
13 China Southwest
Scandal
e joint government of Nepali Congress and CPN
(UML) had appointed B K Man Singh as an execu-
tive chairman of NAC in 1998. In his tenure NAC
had made an agreement with Chinese Southwest
Airlines without tendering.
Irregulari-
ties of 220
million ru-
pees
CIAA did not do
any investigating.
14 Ncell Scandal Telia Company of Sweden sold its 80 percent share in
Ncell to Axiata Company on 11 April 2016. ough
the transaction was carried out by the international
company, the company being in Nepal has to follow
Nepal's taxation rule. But the company did not pay
the tax.
32 billion It was stated in the
54th report of e
Auditor Gener-
al's Oce. But no
action was com-
menced based on
the report.
15 Allowance of Maoist
Cadres Scandal
e then CPN Maoist party had taken allowance
for 19602 cadres staying in the camp aer the party
came into the peace process. Later, 2432 cadres were
not found.
4 billion
rupees
Not even a prelim-
inary investigation
was carried out
into the complaint.
of low quality. This has been developing the state of
underdevelopment in Nepal.
Increasing impunity has slowed down investigation
and prosecution of corruption cases. Impunity means
exemption or escape from punishment and nes. It is
common in those countries that lack rule of law and the
low probability of being prosecuted. (Avakian, 2018).
Impunity causes corruption and nancial irregularities,
and it also promotes monopoly, and it plays a negative role
on economic growth and development (Tum, 2001).
High level of Corruption in Nepal
Dierent studies and research show that the level
of corruption in the country is awful. The corruption
perception index (CPI) is used for analyzing the state
and physiognomies of corruption in Nepal. Transparency
International had been publishing the corruption perception
index since the early 1990s but it started publishing the
data related to Nepal only in 2004. It was measured in 10
from 2004 to 2011 and in 100 from 2012 to 2020. The data
shows that corruption is high from 2004 to 2011 (Table 6).
Table 6: CPI rank of Nepal
Ye a r Rank Score
2004 90 2.8
2005 117 2.5
Source: Content Analysis, 2021

106
Dipesh Kumar Ghimire
2006 121 2.5
2007 131 2.5
2008 121 2.7
2009 143 2.3
2010 146 2.2
2011 154 2.2
2012 139 27
2013 116 31
2014 126 29
2015 130 27
2016 131 29
2017 122 31
2018 124 31
2019 113 34
2020 117 33
2021 117 33
Source: Transparency International
The table above indicates how corruption has increased
in Nepal over the years. Not only through CPI index, have
other studies also testied to high prevalence of corruption
in Nepal.
The global corruption barometer of Transparency
International is a global report that tries to shed light on the
magnitude of corruption in Nepal. According to the 2011
survey, about 62.8 percent people alleged that corruption
has been increasing in Nepal (TI, 2011). This increased
to 72 percent in 2013. According to the global corruption
barometer, the politicians of Nepal are the most corrupt. In
this, more than 90 percent of people alleged that politicians
of Nepal are most corrupt. After this 85 percent was for
public entities and ocials, 80 percent for police and 79
percent for parliament are corrupt respectively. The other
entities where people experience the events of corruption
are revenue oce, land revenue oce, courts, and tax
administration regulation oces (TI, 2013).
If we analyze the Transparency International’s corruption
perception index (CPI) between 2004 and 2020, Nepal is
always at the bottom of TI’s CPI rankings which indicates
that the increased high-level of corruption in Nepal leads to
lower investment drive and slippery economic growth.
Corruption has greatly contributed to the
underdevelopment and failure of good governance in
Nepal. Nepal is not able to properly implement the policies
which promote good governance. It has failed to facilitate
the development and success of democratic processes
due to the prevalent existence of high level’s political
corruption and grassroots levels bureaucratic corruption.
Accountability is generally very weak in Nepal. Corruption
seems to be one of the obstacles to the development and it
also promotes the development of underdevelopment in
Nepal.
Conclusion
High levels of corruption aect development by
slowing down economic growth and development. The
corruption, irregularities and rent-seeking behavior are
rooted in the Nepalese politics and public administration,
which has jeopardized the economic growth and promoted
underdevelopment in the country. Corruption has led
to weakening productivity and lowering economic
growth. Similarly, impunity has negatively aected the
development process of a country.
There is weak policy and legal provision for
controlling corruption in Nepal. The weak anti-corruption
law and implementation status are major challenges to
development activities. Corruption control seems to be
weak, which is a constraint to investment and economic
growth. The corruption has also discouraged investment
leading to the direct impact on the quality, cost, and timely
completion of the infrastructure development in Nepal.
This situation is directly contributing to the development
of underdevelopment in Nepal.
While the high-level politicians, bureaucrats and
other ocials are not being prosecuted for corruption
and nancial crimes encouraging others to engage in
corrupt acts. If this massive amount of money would
have been channeled for the development of the country,
Nepal would not have to face the problems of bad roads,
poverty, poor/no drinking water supply, and high level of
unemployment. Huge amounts of money that could be used
to infrastructural development are stolen by the politicians
and bureaucrats; businessmen who send this money to
developed countries for safe keeping at the expense of
the country's development. The scandals stated above
show that the corruption and development in Nepal are
closely related. The corruption has reduced the potential
for economic growth.
In development thinking, high levels of corruption
are seen primarily as a challenge to the ecient delivery
of outcomes such as health, income growth, education,
infrastructure, and a thriving private sector. Failures of
governance and corruption do present such challenges.
It is believed that corruption is the major problem of
development. A country is poor and underdeveloped
because it is corrupt and that it is corrupt because of slow-
changing institutions which is a way of avoiding the moral
responsibility to act. Poor, historically rooted institutions
necessarily have led to underdevelopment in Nepal. The
study clearly shows that corruption leads to distorting
economic growth, expanding inequality and divisions in
a society which has harmful eects on economic growth
and development. As said by Coates and Quest (2005)
corruption is the main cause of underdevelopment and
corruption also harmful impacts of economic development
of Nepal.

107
Dhaulagiri Journal of Sociology and Anthropology Vol. 16, 2022, pp. 98-108
Declarations
Ethics Approval and Consent to Participate
I declare that this research has been conducted ethically.
Consent for Publication
Not applicable.
Availability of Data
The secondary data was collected by the author. In this
paper, qualitative data was presented as required for the
thematic issues. The rest of the data were not presented or
shared due to data condentiality and integrity.
Competing Interests
There is no competing interest with any individual or
agency.
Funding
No funding.
Acknowledgements
This article is part of my PhD dissertation. I am grateful to
my PhD supervisor Associate Professor Tikaram Gautam,
PhD for academic guidance and supervision and Prof.
Madhusudan Subedi for providing feedback on the rst
draft of this article.
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Dipesh Kumar Ghimire (https://orcid.org/0000-0002-
6687-606X) is an Assistant Professor in the Central
Department of Sociology at Tribhuvan University,
Nepal. DKG’s research interests are in anti-corruption,
governance, social exclusion, economic development,
and democracy. DKG got his MPhil in Sociology from
Tribhuvan University. DKG has published 5 books and
more than one and half dozen research articles in various
journals.
Email:dipesh.ghimire33@gmail.com; dipesh.ghimire@
cdso.tu.edu.np.