Guiding the Federalism Process in South Asia's Newest Democracy

Over a decade ago, and following a lengthy civil war, Nepal’s political parties agreed to change the country’s unitary system of government to a federal system. After years of discord and stasis, the country’s Constituent Assembly successfully passed a new constitution in September 2015, which mandates establishing three equal tiers of government: federal, provincial, and local. Now, the country’s leaders must deliver on those promises of the Constitution.

CIPE and its partner Samriddhi, The Prosperity Foundation, a well-respected Nepali think tank, are working to make sure that federalism is effectively implemented in Nepal, and delivers effective governance for citizens. Local government can make policy decisions more responsive to citizens, decentralization can facilitate entrepreneurship, and pro-growth competition can emerge among provinces. In this way, successful implementation of federalization can underpin the success of democracy in Nepal in the long-term. Therefore, CIPE and Samriddhi are working to guide the process of federalization and devolution of economic policymaking, as well as setting up local civil society organizations that can hold newly-established provincial governments accountable for implementation of promised reforms.