Corruption in Nepal - Effects, Causes and Remedies

Corruption in Nepal - Effects, Causes, and Remedies

Corruption has been the "tea-talk" of every Nepalese for a long time. Recent scandals like COVID-19 test kits that involved government and Nepal Army is the hot topic of discussion during this political and COVID-19 crisis. Before this, there was another high profile corruption case that involved Chudamani Sharma (Suspended Director General of Inland Revenue). It's been more than three years since the case was filed against Chudamani Sharma. The case is still sub-judice at the court. And, another high profile international case involving Airbus has not been brought to closure, no action has been taken for the Airbus scandal, although there are documents and statements which clearly show "payment" that was made classifies as a bribe. Most of us and our government don't care about these cases once the limelight is gone. Though they seem hot and popular topics for a few weeks, they are forgotten easily. 

In the past, corruption occurred when people wanted to do illegal things but now, it occurs to do legal things on time without interruption. Most of the corruption topics or cases start like a wildfire at the beginning but cools down eventually. Will these high profile cases become a paragon for anti-corruption or will these cases become just another case like other thousand of cases after news sensationalism is over? The latter scenario looks more likely in present Nepal. 

Corruption in Nepal - Effects, Causes and Remedies
Source: Ekantipur

We have been accustomed to corruption as it is visible in public services, tax office, contracts, exercising rights, NGO, INGO, Religious institutions or even obtaining civil documents and every other sector that exists. It has become a part of everyday life. 

Corruption is one of the major if not the principal reason for Nepal's underdevelopment. Like other developing nations, Nepal is in the turmoil caused by corruption. Misuse of power and authority leads to moral decay which is more dangerous than corruption itself. Corruption reduces competitiveness and increases cost and construction time, lowers the quality, and decreases the benefits significantly from any project. For example, Expensive Elections: a huge amount of money is invested by political parties during the election to buy voters or to please their supporters. Where do you think this money comes from? Along with the black money, it is collected from the businessperson who funds the political parties willingly or unwillingly in return for a favor. This investment's return is very high and easily accessible after the election from contracts, mishandling of funds, theft, extortion, and so on. 

Voter casting vote in a ballot - Corruption Nepal

Politics has been the most profitable business in Nepal's context for many years. Sectors like Judicial system, Police, Public service, Tax administration, Custom administration, Public Procurement, Legislation, Civil Society, and, Natural resources department, etc. are other high-profit sectors for corruption [1]. 

In simple terms, corruption can be defined as a form of dishonesty and criminal offense involving a person or organization who misuses power/position for personal benefit. Based on the scale of corruption, it can be generalized into three categories: Petty, Grand, and Systematic Corruption. 

Petty corruption: Like its name, it occurs on a small scale usually at the end of public service. For example, in places or offices where public officials meet public directly like License office, police stations, and so on. You get the idea. 

Grand corruption: Abuse of high-level power for the benefit of few at the expense of many which harm individuals and society and go unpunished. Stealing from public budgets for schools, roads, and hospitals, etc. are a few examples. 

Systematic corruption: The whole system is corrupted and it is considered a way of life. All the corrupters follow common informal norms and rules of corruption. It is more than a few individuals or few bad apples in a tree, it is the whole tree that's gone bad. For instance, this happens when everyone benefits from corruption, the whole ministry or department (officials, ministries, and politicians) is involved. 

Types/Methods of Corruption

Different ways in which corruption occurs- Methods of corruption

Generally, these are considered as corruption (this is not the extensive list). 

A brief definition of well-known methods of corruption are: 

i. Bribery: The most common way of corruption is bribery, where a fixed amount or percentage or any other favor is exchanged for personal gain to do illegal things by the people in authority. It is known as "Ghush" in Nepali and very well known term throughout the nation.

ii. Embezzlement: Generally, it's a theft of public resources entrusted by public officials/employees. Misuse of power to control, influence, and manipulate the public. 

iii. Favoritism/Cronyism/Nepotism: Academic qualifications, training background, working discipline, work experience, the integrity of character, and other such attributes are neglected in these corruption methods.

Favoritism is the broader term which means favoring someone just because of likes and dislikes. It can be seen in the hiring process, awarding of contracts, and many other places (almost everywhere). Simply, you prefer someone, not for their work or qualifications but of some feature or likes and dislikes. 

Cronyism is a subset of favoritism which means favoring or referring to partiality towards friends and associates. "What matters is who you know, not what you know ", this statement clearly defines cronyism. 

Nepotism is another subset, a more specific and narrower form of favoritism. This is favoring your family members and the picture below explains this term perfectly.

Prachanda and his family involved in government - Example of Nepotism
Source: Facebook (NepalNews) To the rightful owner

Koirala and Gandhi family of Nepal and Indian Congress respectively are other prime examples of Nepotism.


Corruption in Nepal is limpid and it is considered one of the most corrupted nations in the world, as it lies at 113th spot out of 180 countries. According to Transparency International (global watchdog based in Berlin anti-corruption organization), Nepal received a score of 34 out of 100 in Corruption Index - 2019. Transparency International uses World Bank data, the World Economic Forum, and other institutions for evaluation. Whereas, countries like New Zealand, Denmark, Sweden, and Finland lie ahead of the pack with a score closer to 100 [2]. 

Corruption has been a pervasive issue throughout the nation and has hit the political, economical, social, and environmental development of Nepal. Inflation, secretiveness to trade, and underdevelopment are visible outcomes of corruption. To control the abuse of power and corruption, there are agencies like CIAA (Commission for the Investigation of Abuse of Authority), NVC (National Vigilance Center), DMLI (Department of Money Laundering Investigation) and Transparency International, Nepal but real output or visible action is non-existent from these organizations [3]. These institutions are often accused of legitimating corrupt officials by entrusting them with the very corruption initiatives designed to investigate them. 

Suspended Director General of Inland Revenue Department, Chudamani Sharma in police custody
Source: Kathmandu Post
Corruption is widely practiced and has become a part of daily life. Work against corruption is only limited to paper and only those who have no political connection are punished. This type of practice is more dangerous than corruption itself and can threaten the existence of the nation. Thousands of corruption cases are filed but they get lost and remain only as a file. It appears that the Anti-corruption agency is only for those people with no political backing and high profile officers/bureaucrats (big fish) walk freely. 

What's more precarious: it has become a part of our life which has been accepted publicly as the corrupt officials and politicians walk freely. In Nepal, every sector is affected by corruption and some of the ministries are considered gold mines for corruption [4]. Defense, Home, and Finance Ministry are considered as gold mines and for a few upcoming years, there's a high possibility that the Health Ministry will be added to the list. When people in politics and government officials are involved in corruption and leave unscathed, other people are encouraged to do so and they follow their lead without hesitation. This has been the sad reality of Nepal. 
For every elite benefiting from extraction there is a non-elite who would love to replace him - Why nations fail ( Daron and Robinson )
Even the youths have fallen to this long ongoing tradition of corruption. Politicians, Ministers, and Government officials who were supposed to be a role model for the upcoming generation have failed miserably, portraying their respective field as easy cash earning field. Most of the youths today perceive civil service/politics as a place to earn money safely with no hassle rather than a place to serve people [5]. Many believe this route of corruption is the easiest and safest way. Like a child who carries his/her parent’s gene, youths today are carrying corruption as a hereditary trait. This might be the deadliest trait for any nation and lethal for a developing nation like Nepal. 

Causes of Corruption in Nepal

"Corruption is a symptom of deep-seated and fundamental economic, political, and institutional weakness and shortcoming in a country. " 

The multiparty system in Nepal has contributed to the bloom of corruption. Before the multiparty system, there were few elites hence, the corruption rate was low. Now there are "many elites" in Nepal who came to power declaring to serve people, instead, they have become rulers. Neither nation nor citizens have benefited from this multi-party system till now. Corruption causes many problems but corruption itself is a manifestation of various conditions. It’s an effect of deep-rooted causes which gives birth to corruption [6]. 

Expensive election, economic disparity, political instability, educational inequality, and social security are considered to be the main reasons behind burgeoning corruption. 

Other potential causes are:

10 Causes of Corruption - Nepal Corruption

Attempting to engineer prosperity without confronting the root cause of the problems- politics and extractive institutions that keep the in place- is unlikely to bear fruit. - Why Nations Fail ( Dario and Robinson ) 

Possible Remedies

Corruption is one of the most serious obstacles for democracy and economic development. Nation collapses when corruption turns into a culturally accepted practice. 

New Zealand, Denmark, Finland & Sweden are considered as least corrupt nations in the world. This has been possible due to various reasons like involving the public in this fight as well as transparency mechanisms such as disclosure of information and integrity system. Government openness, civic activism, and social trust are also visible in these countries. Another important factor is the Accountability mechanism where citizens could monitor their politicians and hold them accountable for their actions and decisions. For example, in Denmark, there is a code of conduct specially designed for public servants. The experience these countries have acquired in terms of legislation, public procurement codes, information, technology, literacy, and controlled procedures is valuable but it is just a technical element in much complex process of change depends on economic development [7]. 

By involving stakeholders and by changing public attitudes that consider personal loyalties more important than formal rules and morals this achievement was possible. This required political will, shared responsibility and hard work among leaders, opposition, civil society, and citizens with information exchange mechanisms [8]. 

Nepal has to come up with its strategy, circle to development, and good governance to combat corruption because circumstances are very different from those developed nations in terms of economical, social, cultural, and environmental aspects. Nevertheless, valuable knowledge and ideas can be generated just by studying the strategies of these nations and can be applied with little modifications in Nepal. 

"Outcome for the citizens of the developing world depends greatly on the actions and determination of political leaders and critical political leadership decisions" 

Handcuff with a key

Property investigation of all citizens, ex and present government officials and politicians should be the first step, followed by strict action when found guilty, in this fight against corruption. For this, Nepal needs a strong leader who not only preaches against corruption from the podium but fights it as well. Looking at the current situation and current politicians (ruling and opposition included), it looks highly unlikely. Most of them are either involved in some scandal or some form of corruption. This type of leadership requires accountability, responsibility, dignity, self-respect, and morality which seems non-existent in most of the politicians. These values and attitudes are only heard during speeches especially at the time of election to fool voters. 

Fight against corruption should be based on the development process itself. As Irene Hors said "Almost all politicians owe their careers and status to corruption and few of them, if any, will take a stand against it, either for fear of upsetting their careers or the political status quo" [9]. Leadership credibility can increase only by punishing well-known corrupts, showing Accountability, encouraging merit-based human resource management, and, simplification of the all governmental/non-governmental process. 

Legal framework criminalizing a wide range of corruption-related abuses and an independent and efficient judiciary should be practiced. There should be protection and reward for the whistleblowers. Corrupts should be confronted and publicly put to shame. Freedom of the press and effective oversight bodies along with strengthened police and law courts are required to weaken corruption. 

Only formulating strict rules and regulations won't change a thing unless proper action is taken. We have rules and regulations, Anti-corruption bodies but the outcome is missing. There is even a trend of modifying rules if it's not suitable and beneficial for you or your associates. And the rule has been adjusted to benefit the people in power. Rules and regulations can mitigate the effects but it's won't tackle the root cause. 

Educating and involving stakeholders from the grassroots level is the long term solution against corruption. The reawakening of values, morals, ethics, and change of attitude towards corruption is required to tackle the root cause for any significant progress. 

Jhole Baad” and blind followers of political parties and person has crippled Nepal in all sectors. When people (especially youth) put their role model/leader/party in front of the nation knowingly or unknowingly, “Jhole Baad” occurs and the nation starts to die. Instead of questioning their leaders which helps in the regulation, they abide by the order which promotes inappropriate and illegal activities. Unless this culture of “Jhole Baad” ends, Nepal will continue to suffer not only in the field of corruption but in every other sector. 

But, there has been  a glimpse of hope as Politically unaffiliated  youths are on streets demanding accountability from government. (Source: WSO)

Political literacy and knowledge about rights and responsibilities is another contributing factor. The general perception is " Why do we need to bother, they are stealing from the government, not from us", this is very common amongst people but they fail to realize that this or any other government is run/made by the people and their money, paid in the form of tax. This fight will be much stronger when they realize it's their money that corrupters are stealing. More aware people are, more questions they start to ask and that's how corruption downturns. 

Transparency increases the effectiveness of the system. If the system and process are transparent with less complication, then more people will have access to information and related data which will raise consciousness. Lack of transparency has contributed greatly to increase corruption. Thanks to Social Media and Press, things are starting to change as the speed of information exchange has increased drastically. The role of the Press can not be ignored in democracy and it is very efficient in controlling corruption. However, this is just a starting point and there's a long way to go to make the system transparent. 

Whether it’s Rs. 100 or Rs. 1 billion, it’s still corruption if it’s obtained/given illegally. The amount is not an indicator that classifies corruption. 

Wrong can never be right, no matter the scale or size. 

Expensive elections and the influence of funding for the political parties should be reduced. This requires good integrity systems and strong-willed citizens to overcome corruption. If the role and action of top leadership are exemplary, others will be less tempted to walk the path towards corruption and lower ranks would follow the leader in the fight against corruption. Unless the definition of politics is changed from money generation sphere to people serving sphere and attitude of politicians changes from wealth accumulation to social service, any positive change looks highly unlikely. 

“Both bribe receiver and bribe offerer are enemies of the nation” 

- Prithivi Naryan Shah

What do you think ? How can we stop corruption in Nepal ? Will this vicious cycle end ? Let me know what you think. 

Thank you for your visit. I hope everything was clear, if not please do not hesitate to contact me for suggestions or queries regarding this topic. Honest feedback is highly appreciated. You can contact me via “ “. Thanks again.

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