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Contemporary Research: An Interdisciplinary Academic Journal, 2024, vol. 7 (1): 39-58 39
Full text can be downloaded: https://www.nepjol.info/index.php/craiaj &http://www.craiaj.info/
The Level of Corruption in Democratic Republic of Nepal: An In -
depth Analysis of Root Causes, Governance Impact, and Potential
Solutions
1
Mukti Suvedi
Abstract
This article critically examines the issue of corruption in Nepal's modern democracy,
which poses a significant challenge to the foundational principles of transparency,
accountability, and fair representation. Through an exploration of the root causes, impact
on governance, and potential solutions, the study sheds light on the complexities of
corruption within Nepal's political and administrative systems.
The analysis identifies historical factors, including the lingering effects of past autocratic
regimes and political instability, as contributors to the conducive environment for
corruption. Furthermore, weak institutional frameworks, characterized by insufficient
checks and balances, inadequate enforcement mechanisms, and political patronage
networks, are identified as systemic issues fostering corrupt practices.
The impact of corruption on governance is manifested in the erosion of public trust,
economic consequences leading to resource misallocation, and impaired service delivery
in essential sectors. These consequences collectively contribute to disillusionment among
citizens, hindering the democratic process and perpetuating social inequalities.
This study utilizes qualitative methods to analyze corruption in Nepal's democracy,
identifying root causes and impacts while proposing solutions like strengthening
institutions and fostering transparency. Secondary research study was performed to
abstract potential solutions, emphasizing the need for strengthening democratic
1
Cite this article as: Suvedi, M. (2024). Contemporary Research: An Interdisciplinary Academic Journal,
vol. 7 (1); DOI: https://doi.org/10.3126/craiaj.v7i1.67252
Dr. Mukti Suvedi, peace practitioner, educator, facilitator, works in South Asia
Email: muktisuvedi@gmail.com
Article history: Received on January 1, 2024; Accepted on May 13, 2024; Published on June 25, 2024
Peer reviewed under the authority of CRAIAJ, academic journal of Ghodaghodi Multiple Campus, Kailali,
Nepal, with ISSN 2717-4611 (Print) and ISSN 2717-462X (Online).
© 2024 CRAIAJ, A Star Rated Journal Indexed in Nepjol
Creative Commons Attribution-NonCommercial-NoDerivatives 4.0 International License
Contemporary Research: An Interdisciplinary Academic Journal, 2024, vol. 7 (1): 39-58 39
Full text can be downloaded: https://www.nepjol.info/index.php/craiaj &http://www.craiaj.info/
The Level of Corruption in Democratic Republic of Nepal: An In -
depth Analysis of Root Causes, Governance Impact, and Potential
Solutions1
Mukti Suvedi
Abstract
This article critically examines the issue of corruption in Nepal's modern democracy,
which poses a significant challenge to the foundational principles of transparency,
accountability, and fair representation. Through an exploration of the root causes, impact
on governance, and potential solutions, the study sheds light on the complexities of
corruption within Nepal's political and administrative systems.
The analysis identifies historical factors, including the lingering effects of past autocratic
regimes and political instability, as contributors to the conducive environment for
corruption. Furthermore, weak institutional frameworks, characterized by insufficient
checks and balances, inadequate enforcement mechanisms, and political patronage
networks, are identified as systemic issues fostering corrupt practices.
The impact of corruption on governance is manifested in the erosion of public trust,
economic consequences leading to resource misallocation, and impaired service delivery
in essential sectors. These consequences collectively contribute to disillusionment among
citizens, hindering the democratic process and perpetuating social inequalities.
This study utilizes qualitative methods to analyze corruption in Nepal's democracy,
identifying root causes and impacts while proposing solutions like strengthening
institutions and fostering transparency. Secondary research study was performed to
abstract potential solutions, emphasizing the need for strengthening democratic
1Cite this article as: Suvedi, M. (2024). Contemporary Research: An Interdisciplinary Academic Journal,
vol. 7 (1); DOI: https://doi.org/10.3126/craiaj.v7i1.67252
Dr. Mukti Suvedi, peace practitioner, educator, facilitator, works in South Asia
Email: muktisuvedi@gmail.com
Article history: Received on January 1, 2024; Accepted on May 13, 2024; Published on June 25, 2024
Peer reviewed under the authority of CRAIAJ, academic journal of Ghodaghodi Multiple Campus, Kailali,
Nepal, with ISSN 2717-4611 (Print) and ISSN 2717-462X (Online).
© 2024 CRAIAJ, A Star Rated Journal Indexed in Nepjol
Creative Commons Attribution-NonCommercial-NoDerivatives 4.0 International License
Contemporary Research: An Interdisciplinary Academic Journal, 2024, vol. 7 (1): 39-58 39
Full text can be downloaded: https://www.nepjol.info/index.php/craiaj &http://www.craiaj.info/
The Level of Corruption in Democratic Republic of Nepal: An In -
depth Analysis of Root Causes, Governance Impact, and Potential
Solutions
1
Mukti Suvedi
Abstract
This article critically examines the issue of corruption in Nepal's modern democracy,
which poses a significant challenge to the foundational principles of transparency,
accountability, and fair representation. Through an exploration of the root causes, impact
on governance, and potential solutions, the study sheds light on the complexities of
corruption within Nepal's political and administrative systems.
The analysis identifies historical factors, including the lingering effects of past autocratic
regimes and political instability, as contributors to the conducive environment for
corruption. Furthermore, weak institutional frameworks, characterized by insufficient
checks and balances, inadequate enforcement mechanisms, and political patronage
networks, are identified as systemic issues fostering corrupt practices.
The impact of corruption on governance is manifested in the erosion of public trust,
economic consequences leading to resource misallocation, and impaired service delivery
in essential sectors. These consequences collectively contribute to disillusionment among
citizens, hindering the democratic process and perpetuating social inequalities.
This study utilizes qualitative methods to analyze corruption in Nepal's democracy,
identifying root causes and impacts while proposing solutions like strengthening
institutions and fostering transparency. Secondary research study was performed to
abstract potential solutions, emphasizing the need for strengthening democratic
1
Cite this article as: Suvedi, M. (2024). Contemporary Research: An Interdisciplinary Academic Journal,
vol. 7 (1); DOI: https://doi.org/10.3126/craiaj.v7i1.67252
Dr. Mukti Suvedi, peace practitioner, educator, facilitator, works in South Asia
Email: muktisuvedi@gmail.com
Article history: Received on January 1, 2024; Accepted on May 13, 2024; Published on June 25, 2024
Peer reviewed under the authority of CRAIAJ, academic journal of Ghodaghodi Multiple Campus, Kailali,
Nepal, with ISSN 2717-4611 (Print) and ISSN 2717-462X (Online).
© 2024 CRAIAJ, A Star Rated Journal Indexed in Nepjol
Creative Commons Attribution-NonCommercial-NoDerivatives 4.0 International License
Contemporary Research: An Interdisciplinary Academic Journal, 2024, vol. 7 (1): 39-58 40
Full text can be downloaded: https://www.nepjol.info/index.php/craiaj &http://www.craiaj.info/
institutions, promoting transparency and accountability through robust measures and
enforcement of anti-corruption laws, and fostering citizen engagement. Additionally,
international cooperation is highlighted as a valuable avenue for sharing best practices
and gaining insights from successful anti-corruption efforts in other nations.
In conclusion, the study advocates for a comprehensive, multi-faceted approach to
address corruption in Nepal's democracy. By addressing root causes and fostering a
culture of accountability, the nation can strive towards building a more resilient
democratic system that effectively serves the interests of its people. The article
underscores the importance of sustained efforts and a collective commitment to
combating corruption for Nepal to realize a future where democracy thrives and fulfills
its promises.
Keywords:Causes of Corruption, Corruption, Governance, Nepal
Introduction
Corruption, as a pervasive challenge in modern democracies, continues to
undermine the fundamental tenets of transparency, accountability, and fair representation.
In the context of Nepal, a nation that has undergone a historic transition to republic
democracy in recent decades, the complexities surrounding corruption within its political
and administrative systems demand critical examination. This article seeks to delve into
the challenges and consequences of corruption in Nepal's modern democracy, exploring
its root causes, impact on governance, and potential solutions.
Nepal's historical trajectory, marked by political transitions and changes in
governance structures, has laid the groundwork for the persistence of corruption. The
lingering effects of past autocratic regimes and periods of political instability have
created an environment where corrupt practices can thrive (Shrestha, 2017). Additionally,
the nation's weak institutional framework poses a significant obstacle to effective
democratic governance, characterized by inadequate legal frameworks, insufficient
checks and balances, and a lack of robust enforcement mechanisms (World Bank, 2020).
Political patronage further exacerbates the issue, as the Nepalese political
landscape often witnesses the favoring of loyal supporters with positions and benefits,
contributing to a culture where personal and political interests may supersede public
welfare (Tiwari, 2019).
The impact of corruption on governance is multifaceted. It manifests in the
erosion of public trust in democratic institutions, hindering citizens' confidence in the
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democratic process and fostering disillusionment and apathy (Khanal et al., 2018).
Moreover, corruption has far-reaching economic implications, diverting resources away
from essential public services and infrastructure projects, thereby impeding economic
development and perpetuating poverty (Transparency International, 2021). Additionally,
corrupt practices in the public sector compromise the delivery of vital services, such as
healthcare, education, and infrastructure, directly affecting the well-being of citizens and
perpetuating a cycle of underdevelopment (World Bank, 2018).
To address these challenges, potential solutions must be explored. Strengthening
democratic institutions is imperative, requiring a focus on enhancing their independence
and ensuring adequate resources and capacities to perform effectively (United Nations
Development Programme, 2022). The promotion of transparency and accountability
through the enforcement of anti-corruption laws and the establishment of independent
oversight bodies is crucial (Khanal et al., 2018). Citizen engagement, facilitated by public
awareness campaigns, civic education, and the promotion of a culture of accountability,
can act as a powerful check on corruption (Treisman, 2000). Furthermore, international
cooperation, involving collaboration with organizations and the sharing of best practices,
can contribute to a more comprehensive approach in tackling corruption (World Bank,
2021).
Literature Review
Corruption in democratic systems is a global concern that has garnered significant
attention from scholars and policymakers alike. This literature review aims to provide an
overview of existing research on corruption in democratic contexts, with a specific focus
on Nepal. By examining key theories, concepts, and findings from previous studies, this
review seeks to identify gaps in the literature that the current research endeavors to
address.
Theoretical frameworks on corruption in democracies
Principal-agent theory
Principal-agent theory has been frequently employed to understand corruption
within democratic systems (Rose-Ackerman, 1999). In the democratic context of Nepal,
this theory suggests that the relationship between citizens (principals) and elected
representatives or bureaucrats (agents) may be marred by information asymmetry and
moral hazard, contributing to corrupt practices (Debbane, 2006).
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Cultural and Social Capital Perspectives: Research has also explored cultural and
social capital perspectives to elucidate the role of societal norms and networks in
fostering or mitigating corruption (Sobel, 2005). In Nepal, societal expectations and
networks may influence the prevalence of corruption, as has been observed in other
South Asian contexts (Treisman, 2007).
Root causes of corruption in Nepal's democracy
Historical legacy and political transition
The historical legacy of autocratic rule and political transitions in Nepal has
created an environment conducive to corruption (Shrestha, 2017). Political instability and
changes in governance structures may have left lasting effects that contribute to the
challenges faced in curbing corruption within the democratic framework.
Weak institutional framework
The effectiveness of democratic institutions in Nepal is hindered by weak legal
frameworks, insufficient checks and balances, and inadequate enforcement mechanisms
(World Bank, 2020). The literature suggests that addressing these institutional
shortcomings is crucial for combating corruption.
Political patronage networks
Political patronage, a recurring theme in Nepalese politics, involves the exchange
of political support for positions and benefits (Tiwari, 2019). The existence of these
networks may contribute to a culture where corruption thrives, as officials prioritize
personal and political interests over public welfare.
Governance impact of corruption in Nepal
Erosion of public trust
Corruption erodes public trust in democratic institutions, leading to
disillusionment and apathy (Khanal et al., 2018). Understanding the impact on citizen
perceptions is essential for assessing the health of Nepal's democratic system.
Economic consequences
Corruption diverts resources away from essential public services and
infrastructure projects, hindering economic development and perpetuating poverty
(Transparency International, 2021). This misallocation of funds has far-reaching
economic implications for the nation.
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Impaired service delivery
Corruption in the public sector compromises the delivery of essential services,
impacting healthcare, education, and infrastructure (World Bank, 2018). This directly
affects the well-being of citizens and perpetuates a cycle of underdevelopment.
Potential solutions and gaps in the literature
Strengthening institutions
Research emphasizes the importance of strengthening democratic institutions in
Nepal (United Nations Development Programme, 2022). Addressing the gaps in the
literature, this study aims to provide nuanced insights into the specific institutional
reforms required for effective anti-corruption measures.
Promoting transparency and accountability
Previous literature suggests the need for robust transparency measures and
accountability mechanisms (Khanal et al., 2018). The current research seeks to contribute
by examining the practical implementation of these measures within the Nepalese
context.
Citizen engagement
While citizen engagement is recognized as a potential solution (Treisman, 2000),
the gaps in the literature may include specific strategies for empowering citizens in the
Nepalese democratic process. This study aims to explore and propose concrete methods
for fostering citizen participation.
International cooperation
Collaboration with international organizations is highlighted as beneficial (World
Bank, 2021). However, the gaps in the literature may involve a deeper exploration of the
specific challenges and opportunities associated with international cooperation in Nepal's
context.
The existing literature provides a valuable foundation for understanding
corruption in democratic systems, particularly in the context of Nepal. This literature
review identifies key theoretical frameworks, root causes, governance impacts, and
potential solutions discussed in previous research. However, gaps persist, particularly in
the specific application of solutions within Nepal's democratic framework. This study
aims to address these gaps by offering a comprehensive analysis of corruption in Nepal,
contributing to both academic discourse and policy recommendations for combating
corruption in democratic systems.
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Theoretical Framework
The study on corruption in the Democratic Republic of Nepal is guided by a
comprehensive theoretical framework that draws on various key concepts and ideas
within political science, sociology, and public administration. This theoretical foundation
aims to provide a structured lens through which to analyze the root causes, governance
impact, and potential solutions to corruption within Nepal's democratic context.
Principal-agent theory
The Principal-Agent theory serves as a foundational framework to understand the
dynamics of corruption in democratic systems (Rose-Ackerman, 1999). In the Nepalese
context, citizens act as principals, delegating authority to elected representatives or
bureaucrats who function as agents. This theoretical perspective allows us to explore how
information asymmetry, moral hazard, and the delegation of power contribute to corrupt
practices within the democratic framework of Nepal.
Cultural and social capital perspectives
Complementing the Principal-Agent theory, the study incorporates cultural and
social capital perspectives. By drawing on concepts from sociology, particularly the
works of James S. Coleman and Pierre Bourdieu, the analysis considers how societal
norms, values, and social networks influence corruption (Coleman, 1988; Bourdieu,
1986). The examination of cultural and social capital seeks to uncover the informal
structures that either foster or mitigate corrupt behavior within Nepalese society.
Historical institutionalism
To dissect the root causes of corruption, the study employs Historical
Institutionalism, which posits that historical legacies shape the functioning of
contemporary institutions (Thelen, 1999). In Nepal, historical factors, including
autocratic rule and political transitions, are examined to understand how past events
contribute to the current challenges in curtailing corruption within democratic structures.
Institutional analysis and development (IAD) framework
The Institutional Analysis and Development (IAD) framework, developed by
Elinor Ostrom, guides the exploration of institutional weaknesses contributing to
corruption (Ostrom, 2005). This framework helps in assessing the effectiveness of
democratic institutions in Nepal by examining legal frameworks, checks and balances,
and enforcement mechanisms.
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Social contract theory
The study integrates Social Contract theory to analyze the erosion of public trust
in democratic institutions (Rousseau, 1762). It explores how corruption undermines the
implicit social contract between citizens and the state, leading to disillusionment and
apathy among the public.
Policy feedback theory
To understand the governance impact of corruption, the study applies the Policy
Feedback theory, which posits that policies shape subsequent political and social
dynamics (Pierson, 1993). In the Nepalese context, the misallocation of resources due to
corruption has feedback effects on economic development, public service delivery, and
citizen well-being.
Network analysis
Examining political patronage networks and their influence on corruption, the
study employs concepts from Network Analysis (Scott, 2017). This allows for a nuanced
exploration of how relationships among political actors contribute to corrupt practices.
Institutional strengthening model
In proposing potential solutions, the study adopts an Institutional Strengthening
Model (Andrews, Pritchett, & Woolcock, 2017). This model guides the analysis of
strategies to enhance the capacity, independence, and effectiveness of democratic
institutions in Nepal as a means to combat corruption.
Transparency and accountability framework
Drawing on the concepts of transparency and accountability, the study employs a
framework that assesses the enforcement of anti-corruption laws, the establishment of
oversight bodies, and measures to promote open government (Khanal et al., 2018).
Citizen participation model
To explore citizen engagement as a solution, the study incorporates a Citizen
Participation Model. This model draws on concepts of civic education, public awareness
campaigns, and the promotion of a culture of accountability to empower citizens as active
participants in the democratic process.
This theoretical framework integrates diverse concepts and ideas to
comprehensively analyze corruption in Nepal's democratic context. By employing these
theoretical perspectives, the study aims to uncover the multifaceted nature of corruption,
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providing a foundation for informed policy recommendations and contributing to the
broader academic discourse on corruption within democratic systems.
Research Methodology
The research design for the study on corruption in the Democratic Republic of
Nepal primarily relies on secondary research methods, which encompass literature
reviews, reading news articles, and analyzing published cases of corruption in Nepali
media. This approach aims to draw insights from existing information and documented
cases. The study analysis existing research on corruption, particularly in the Nepali
context. Literature reviews provide an overview of key theories, concepts, and findings
from previous studies, identifying gaps in the literature that the current research aims to
address.
Analysis of news articles and published corruption cases in Nepali media serves
as a valuable source of information. Examining these cases sheds light on real -life
instances of corruption, offering practical insights into the dynamics and manifestations
of corrupt practices in the country.
The research includes key informant interviews with individuals who have
witnessed corruption cases in specific contexts. These interviews focus on firsthand
experiences related to corruption, with a particular emphasis on cases such as the Sudan
corruption case at the police force and the Omni Health case during COVID.
By employing secondary research methods, the study leverages existing data and
information to comprehensively analyze corruption in Nepal. This approach facilitates a
nuanced understanding of the multifaceted nature of corruption, drawing on real-world
examples and documented evidence to inform policy recommendations.
Discussion and Findings
The literature review provides insights into corruption within democratic systems,
focusing on Nepal, revealing key theoretical frameworks such as Principal-Agent Theory
and Cultural and Social Capital Perspectives to understand its dynamics. Root causes,
including historical legacies and weak institutional frameworks, are identified, along with
governance impacts such as erosion of public trust and economic consequences. The
study highlights gaps in the literature, particularly in the application of solutions within
Nepal's context, guiding the study to offer a comprehensive discussion, analysis and
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contribute to both academic discourse and policy recommendations for combating
corruption in democratic systems in Nepal.
The research findings underscore the deep-rooted nature of corruption in the
Democratic Republic of Nepal, which can be traced back to historical factors that have
shaped the country's political landscape. The legacy of past autocratic regimes emerges
as a significant contributor to the prevalence of corruption in Nepal. Under autocratic
rule, a culture of impunity was fostered, wherein those in power could engage in corrupt
practices without fear of accountability. Moreover, the concentration of power in the
hands of a select few, coupled with limited checks and balances, created an environment
ripe for corruption to flourish unchecked.
The findings suggest that the historical context of autocratic rule has left enduring
legacies that continue to influence Nepal's governance structures and contribute to the
persistence of corrupt practices. The lack of accountability mechanisms and the
dominance of a select elite further exacerbate the problem, perpetuating a cycle of
corruption that undermines the country's democratic principles.
Political instability, a pervasive historical factor in Nepal, has significantly
contributed to the challenges faced in curbing corruption within the country. Periods of
political turmoil and frequent transitions of power have disrupted governance structures,
impeding the establishment of robust anti-corruption mechanisms. The inherent
instability has provided fertile ground for corrupt practices to persist, undermining efforts
to promote transparency and accountability within the democratic framework.
The research findings indicate that weak institutional frameworks further
exacerbate the issue of corruption in Nepal. The effectiveness of democratic institutions
has been hindered by a historical legacy characterized by inadequate legal frameworks,
insufficient checks and balances, and a lack of robust enforcement mechanisms. These
institutional weaknesses have created an environment where corrupt practices can thrive
unchecked, impeding the development of a resilient and transparent democratic system.
In essence, the root causes of corruption in Nepal are deeply embedded in the
country's historical journey, marked by autocratic rule, political instability, and weak
institutional frameworks. Addressing these historical factors is crucial for implementing
effective anti-corruption measures and fostering a culture of transparency and
accountability within Nepal's democratic framework.
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The discussion highlights the interconnected nature of historical factors and their
impact on contemporary corruption in Nepal. It underscores the need for comprehensive
reforms aimed at strengthening governance structures, enhancing legal frameworks, and
bolstering enforcement mechanisms to effectively combat corruption and promote good
governance in the country. Addressing these root causes is essential for building a more
resilient and transparent democratic system in Nepal.
Nepal grapples with a persistent struggle against corruption, receiving a 'D' in the
World Economics Corruption grade and securing the 110th position among 180 countries
and territories in the Corruption Perceptions Index (CPI) by Transparency International.
Despite a marginal uptick in CPI, Nepal's corruption rank averaged 124.6 from 2004 to
2022, oscillating between an all-time high of 154 in 2011 and a record low of 90 in 2004.
This incremental progress, however, falls short of meeting the populace's aspirations for
a low-corruption environment.
The normative phenomenon of rising corruption perception poses a severe
challenge, leading to diminishing trust across all state apparatuses, including the
legislative, judiciary, and executive branches. This erosion of trust prompts people to feel
less secure, fostering aggression against state machinery. The consequential brain drain,
loss of population dividend, and a distraction in private sector investment further
exacerbate the economy's descent towards the bottom of the pyramid. The enduring cost
of such pervasive distrust can only be alleviated through concerted efforts by all state
organs.Corruption in Nepal spans various dimensions, encompassing abuse of public
power for private benefit, bribery, fraud, embezzlement, nepotism, and favoritism. This
multifaceted challenge inflicts severe repercussions on public life. Poor public service
delivery disproportionately affects the grassroots, diverting government funds to
ostentatious but low-return projects and sidelining crucial infrastructure initiatives. The
economic toll of corruption is staggering, with estimates by the World Economic Forum
suggesting a global cost of at least $2.6 trillion, equivalent to 5% of the global GDP.
Social costs, environmental degradation, and political instability further compound the
adverse effects of corruption.
To combat corruption, the state must enact regulations and authorizations that
streamline government permits, licenses, certificates, and tax clearances essential for
business activities. Simplifying these processes reduces opportunities for corruption and
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ensures citizens face fewer hurdles in various aspects of life. User-friendly technologies
and online payment systems in tax administration can enhance transparency, while a
merit-based recruitment and promotion system improves the quality of bureaucracy.
Well-paid civil servants, a robust penal system, and institutional controls in the hands of
effective supervisors and auditors are vital for combating corruption.
The path forward demands a revaluation of bureaucracy quality, with an emphasis
on merit-based recruitment and transparent promotion systems. Adequate compensation
for civil servants, a robust penal system, and institutional controls are essential pillars in
the fight against corruption. The quality of bureaucracy plays a pivotal role, as evidenced
by research from 35 developing countries indicating a correlation between corruption
levels and recruitment practices. Politically motivated hiring, patronage, nepotism, and
the absence of clear rules on promotions contribute to bureaucratic shortcomings.
The battle against corruption in Nepal necessitates multifaceted strategies,
regulatory reforms, and a commitment to ethical conduct at all levels of governance.
Addressing corruption is imperative not only for the country's economic and social well-
being but also for fostering trust in democratic institutions and ensuring sustainable
development.
In recent months, Nepal has been ensnared in a high-profile corruption case that
has implicated high-ranking politicians, former ministers, senior bureaucrats, human
rights activists, and intermediaries, exposing the deep-seated corruption within the
country's ruling bureaucracy and political circles (KII, 2023). This scandal revolves
around fraudulent activities wherein Nepali citizens were falsely identified as Bhutanese
refugees, and extensive bribes were collected in exchange for promises of resettlement in
the United States and other countries.
The origins of this corruption scheme can be traced back to the 1990s when
Bhutanese of Nepali origin were expelled from Bhutan and resettled as refugees in
eastern Nepal. After failed negotiations for repatriation, over 100,000 refugees were
resettled in various countries, creating a precedent that contributed to the current
fraudulent activities. The exposed scheme has led to serious allegations, with more than
100 people accusing officials of soliciting payments for guaranteed resettlement in the
United States. Victims claim to have paid over USD $2 million in bribes, with estimates
suggesting that over 13,000 people were sent abroad fraudulently through this scam (KII,
2023).
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The Nepalese authorities have initiated legal action against 33 individuals,
charging them with fraud, organized crime, and even treason. However, public
skepticism persists, fearing that high-profile perpetrators might escape punishment due to
their influence over investigations and the judiciary. Media reports also implicate other
prominent political figures, further exacerbating public suspicion (Kantipur, 2023).
This scandal exemplifies the multifaceted nature of kleptocracy, involving
systemic transnational corruption that compromises national institutions and endangers
the rule of law (Anonymous, 2023). Recent instances, such as attempts to interfere with
criminal investigations and pressure the central bank governor, underscore the alarming
developments in Nepal where powerful political actors brazenly manipulate the system
for personal gain (Kantipur, 2023).
The corruption case, commonly known as the Sudan scam, involved the purchase
of sub-standard armored personnel carriers (APCs) for Nepali UN peacekeepers in the
Darfur region. The top cops were found guilty of the offense by a division bench of then
Chief Justice Sushila Karki and Justice Biswombhar Prasad Shrestha. Despite the court's
guilty verdict, Nepal Police faced criticism for not arresting the former chiefs and
providing them with personal security officers, guards, and other facilities.
The Sudan scam, which unfolded since 2011, saw Rs 310 million embezzled out
of the total Rs 445 million allocated for APC procurement. The Commission for
Investigation of Abuse of Authorities took more than a year and a half to prepare the
case, accusing the three former police chiefs and two dozen police officials of
embezzling millions of rupees. The United Nations Mission in Darfur (UNMID) declared
the Nepali mission "defunct" for procuring substandard APCs from the Czech Republic,
which were used in World War II. The Sudan scam stands as one of the largest
corruption cases in Nepal. The police officials who surrendered within two months of
their conviction are eligible for a 20 percent exemption from punishment (The
Kathmandu Post, 2017).
In late January 2020, a Nepali student in Wuhan, China, became the first Covid-
19 case in South Asia. Nepal, the seventh country globally to confirm the virus, faced
predicted devastating economic impacts. The government, particularly the Ministry of
Health and Population (MoHP), took insufficient steps to procure essential medical
equipment despite warnings. The response included a belated public bidding process
initiated by the Department of Health Service (DoHS) two weeks after the first case. The
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bureaucratic delay exacerbated as Covid-19 cases surged and a nationwide lockdown was
imposed in March (The Kathmandu Post, 2020).
The principal manifestations of corruption encompass bribery, embezzlement,
fraud, extortion, favoritism, and nepotism. These terms, while at times overlapping and
interchangeable, help delineate the fundamental characteristics of corruption (Amundsen,
2000). Bribery, as a form of corruption, involves the exchange of payment, fixed sums,
percentages, or favors in money or kind, usually directed towards state officials who
wield the authority to make contracts or distribute benefits to individuals and entities
(Amundsen, 2000). Synonymous terms such as kickbacks, gratuities, baksheesh,
sweeteners, pay-offs, speed and grease money represent the various facets of bribery,
reflecting corruption from the public's perspective. These payments grease the wheels of
bureaucracy, enabling corporations to secure political favors, evade taxation, manipulate
environmental regulations, and establish protected markets or monopolies.
Embezzlement, another manifestation of corruption, entails the theft of public
resources by public officials or employees of private firms. Although some argue that
embezzlement may not strictly be considered corruption from a legal standpoint, it
represents a transaction where individuals, typically state agents, exceed legal limits to
secure personal benefits, diverging from the prescribed law and regulation to gain bribes
(Amundsen, 2000). Embezzlement in Nepal is a significant mode of economic
accumulation, as political leaders and administrative bureaucrats amass wealth through
this method, often linking political elites with various businesses, media, and educational
ventures.
Fraud, categorized as a serious crime, involves dishonesty, swindling, or cheating.
In the context of corruption, this includes practices such as providing unnecessary loans,
issuing licenses for substandard medicines, approving bills without proper supervision,
and promoting less qualified individuals based on political favoritism (Amundsen, 2000).
The intertwining of dirty politics with the interests of national and international entities
contributes to the selection and promotion of politically corrupt individuals in vital posts
within Nepal.
Extortion, as a corrupt practice, encompasses the extraction of money and
resources through coercion, violence, or the threat of force. Rulers create an atmosphere
of insecurity, harassing and intimidating citizens, private businesses, and public officials,
compelling them to pay protection money to avoid further harassment. The political
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conflict in Nepal has exacerbated extortion, with rulers exploiting the situation to extract
resources through concealed threats.
Favoritism is a mechanism of power abuse that involves the biased distribution of
state resources based on personal preferences, favoring family, friends, relatives, and
other trusted entities. In the political sphere, this manifests in the appointment of
individuals who have access to state resources, enabling them to provide preferential
treatment to certain people. In Nepal, where the Prime Minister holds the constitutional
rights to appoint high-ranking positions, favoritism is pervasive and can extend to several
hundred positions within ministries, diplomatic organizations, and other agencies.
Nepotism, a specialized form of favoritism, occurs when an office holder prefers
family members for political, economic, and public positions. Political leaders often
nominate their family members to various public councils, committees, and security
positions, facilitating the transfer of public power to private wealth. This practice
contributes to the consolidation of power within certain families, clans, or social
subgroups, emphasizing the correlation between public positions and corrupt or
extractive practices.
Recommendation
Policy reforms
Based on the findings of the research, policymakers in Nepal should prioritize
implementing comprehensive policy reforms aimed at addressing the root causes of
corruption. This includes enacting legislation to strengthen governance structures,
enhance legal frameworks, and establish robust anti-corruption mechanisms.
Institutional strengthening
Efforts should be directed towards strengthening democratic institutions in Nepal
by investing in capacity-building initiatives, improving checks and balances, and
enhancing enforcement mechanisms. This could involve providing training for civil
servants, judiciary officials, and law enforcement agencies to effectively combat
corruption.
Transparency and accountability
Promoting transparency and accountability within the government is essential for
combating corruption. Measures such as establishing mechanisms for public oversight,
enhancing access to information, and ensuring transparency in government procurement
processes can help reduce opportunities for corrupt practices.
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Political stability
Addressing political instability is crucial for curbing corruption in Nepal. Efforts
should be made to foster political stability through dialogue, consensus-building, and
strengthening democratic governance structures. This could involve promoting inclusive
political processes, respecting the rule of law, and ensuring peaceful transitions of power.
Public awareness and participation
Increasing public awareness about the detrimental effects of corruption and
fostering civic engagement are important steps in combating corruption. Initiatives such
as public education campaigns, civic empowerment programs, and community-based
anti-corruption initiatives can help mobilize citizens to hold government officials
accountable and demand transparency.
Continued research and monitoring
Continued research and monitoring are essential for evaluating the effectiveness
of anti-corruption measures and identifying emerging challenges. Regular assessments of
corruption trends, public perceptions, and institutional performance can inform evidence-
based policy-making and guide efforts to combat corruption effectively.
Emergency response reform
The case study of Nepal's response to the COVID-19 pandemic underscores the
urgent need for reform in emergency response mechanisms. The government, particularly
the Ministry of Health and Population (MoHP), should prioritize the establishment of
efficient procurement processes for essential medical equipment and supplies. This
includes proactive planning, timely procurement, and transparent allocation of resources
to ensure preparedness for future health crises.
Accountability in emergency spending
To prevent corruption in emergency spending, mechanisms for oversight and
accountability must be strengthened. Transparent procurement processes, independent
audits, and regular monitoring of emergency funds allocation are essential to prevent
mismanagement and ensure that resources are allocated efficiently and effectively to
address urgent needs during crises.
Combating specific forms of corruption
Given the multifaceted nature of corruption in Nepal, targeted strategies are
needed to address specific manifestations such as bribery, embezzlement, fraud,
extortion, favoritism, and nepotism. This could involve implementing stricter penalties
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for corrupt practices, enhancing whistleblower protection mechanisms, and conducting
thorough investigations into allegations of corruption.
Anti-corruption education
Increasing public awareness about the detrimental effects of corruption and
promoting ethical behavior are critical components of any anti-corruption strategy.
Educational campaigns aimed at raising awareness about the various forms of corruption,
their impact on society, and ways to report corrupt activities can empower citizens to
hold government officials accountable and contribute to a culture of integrity and
transparency.
International support and collaboration
International support and collaboration are crucial for strengthening anti-
corruption efforts in Nepal. Continued engagement with international partners, such as
the United Nations Office on Drugs and Crime (UNODC) and the World Bank, can
provide technical assistance, capacity-building initiatives, and financial resources to
support anti-corruption initiatives and promote good governance practices in Nepal.
Legal and institutional reforms
In addition to reviewing existing laws, Nepal should prioritize the implementation
of electronic procurement systems to minimize opportunities for corruption in public
contracting. Introducing measures such as mandatory disclosure of beneficial ownership
information for companies bidding on government contracts can enhance transparency
and deter corrupt practices.
Mitigating political patronage
Implementing strict regulations on political financing and introducing measures to
enhance transparency in campaign finance are essential steps to reduce the influence of
money in politics. Strengthening oversight mechanisms to monitor political party
finances and imposing penalties for non-compliance can help mitigate the risk of
corruption in the political sphere.
Empowering civil society
Supporting civil society organizations (CSOs) through capacity-building
initiatives and providing funding for anti-corruption advocacy and awareness-raising
campaigns can amplify the voices of citizens in the fight against corruption. Creating
platforms for dialogue between CSOs, government officials, and the private sector can
facilitate collaboration and knowledge-sharing on anti-corruption efforts.
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Conclusion
Corruption in Nepal takes various forms, including bribery, embezzlement, fraud,
nepotism, and favoritism. These practices have severe repercussions on public life,
affecting service delivery, diverting funds to low-return projects, and imposing a
staggering economic toll. Recent high-profile corruption cases, such as the fraudulent
resettlement scheme and the Sudan scam, underscore the multifaceted nature of
corruption, involving systemic transnational corruption and compromising national
institutions.
To combat corruption effectively, Nepal needs multifaceted strategies, regulatory
reforms, and a commitment to ethical conduct at all governance levels.
Recommendations include strengthening democratic institutions, legal and institutional
reforms, minimizing political patronage networks, promoting citizen engagement,
enhancing transparency measures, and fostering international cooperation. Capacity
building for public officials, whistleblower protection, leveraging technology, and
establishing a robust monitoring system are essential components of a comprehensive
anti-corruption strategy.
Overcoming challenges in implementation requires developing a roadmap,
establishing independent oversight bodies, fostering inclusivity, and addressing potential
issues in international cooperation through diplomatic dialogue. By adopting these
measures, Nepal can significantly advance its anti-corruption agenda, build a more
transparent democratic system, and restore public trust in state institutions.
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