Abstract
Nepal evolved in the area of Intergovernmental relations (IGR, following the 2015 federalism transition from a unitary system to a federalized governance model comprising federal, provincial, and local levels. This change aimed to eliminate longstanding inequalities and enhance local empowerment. However, challenges persist in coordinating IGR, including issues with power sharing, jurisdiction conflicts, and ineffective dispute resolution mechanisms, which hinder governance. The study focuses on analyzing IGR dynamics, examining institutional frameworks, resource distribution, and policy implementation. It also aims to outline legal provisions for IGR regulation, exploring the roles of the National Natural Resources and Fiscal Commission and the Intergovernmental Fiscal Arrangement Act. The research highlights inefficiencies due to poorly defined coordination processes and emphasizes the need for mutual accountability, effective communication, and fiscal federalization. Despite progressive goals of inclusivity, challenges such as fiscal imbalance and capacity limitations threaten good governance. Utilizing qualitative methods and secondary data, contributing valuable insights into the complexities of Nepal’s federalism and IGR challenges post-Constitution.
Keywords: Intergovernmental relations, Coordination, cooperation, federalism, Constitution.
1. Introduction
Talking about inter-governmental relations, we must refer to chapters 5 and 20 of the Nepal constitution. The state structure and division of power have been referred to in Chapter 5 of the Constitution. According to Article 56 of the constitution, the Federal Democratic Republic of Nepal is of federal, provincial, and local three-tier the system of governance. Federal, provincial, and local are the three levels of government will exercise their state power as per the law and constitution of the Country. The constitution itself has defined the state power as executive, legislative, and judiciary power. Additionally, article 59 of the constitution regarding the exercise of financial authority particularly states that federal, provincial, and local tiers of government can exercise law-making authority, budget-making, policy-making, developmental work choice, and implementation within their jurisdiction. Yet again, chapter 20 of the constitution has been entirely allocated to coordination and interrelation among federal, provincial, and local tiers of government. Articles 231 to 237 are particularly dedicated to coordination and interrelation between federal, provincial, and local government provisions and arrangements. This is the crux of the Intergovernmental relations at the federal, provincial, and local levels in Nepal. (Constitution of Nepal, 2015). Nepal’s application of federalism, instituted in the Constitution of Nepal (2015), was a complete break from the past and aimed at decentralizing power and enhancing local autonomy. The federal system of the three tiers–federal, provincial, and local–is designed to deliver an inclusive and participatory system of governance that reverses historical marginalization and promotes balanced development.
This paper analyzes Nepal’s federal interrelation and coordination mechanisms and their effectiveness in governance implementation. The paper critically examines institutional arrangements, legal laws, and practical challenges in offering a functional intergovernmental system. Furthermore, the paper identifies loopholes in existing mechanisms and offers policy recommendations to improve Nepal’s federal coordination.
2. Objective of the study:
Intergovernmental relations (IGR) in Nepal, stemming from the 2015 federalism shift, focus on cooperation among federal, provincial, and local governments. While aimed at reducing inequalities and promoting inclusive governance, challenges such as jurisdiction conflicts and ineffective dispute mechanisms hinder effective governance. The study analyzes IGR dynamics, including coordination mechanisms and resource distribution, proposing reforms to strengthen federalism. It emphasizes the role of the National Natural Resources and Fiscal Commission and addresses issues of fiscal decentralization, service delivery, and citizen involvement for improved governance.
3. Methodology of the Study
This study employs a qualitative design to explore intergovernmental relations (IGR) in Nepal, specifically informal interactions among federal, provincial, and local governments. Data were collected through secondary means complemented by a scan of policy reports, constitutional provisions, and legislative structures. Thematic analysis was used to ascertain patterns and challenges of IGR, informed by a theoretical framework drawn from decentralization and federalism literature.
4. Theoretical Framework
Intergovernmental relations in federal regimes are informed by varied theoretical paradigms explaining the power-sharing, coordination, and governance relationship. The examination of Nepal’s federal, provincial, and local interrelations can be accounted for by cooperative federalism, competitive federalism, fiscal federalism, and institutionalism. These theories provide explanations on how Nepal’s federalism operates, referring to both structural design and implementation problems.
4.1. Cooperative Federalism:
Cooperative federalism is concerned with coordination among different tiers of government for effective governance. In this case, all government tiers work with one another rather than in silos. This is echoed by the Nepal Constitution (2015), which insists on coordination between federal, provincial, and local governments (Part 20, Article 231). The constitution envisions a system where the tasks of governance are shared yet interdependent and require cooperation to formulate policies and provide services (Adhikari, 2019). However, Nepal’s cooperative federalism is undermined by jurisdictional authority ambiguities, institutionally weak mechanisms, and political rivalries that hinder effective cooperation (Sharma, 2020).
5. Legal mandate: Interrelation and Coordination
5.1. Legislative Coordination:
The Constitution of Nepal (2015) provides the base for coordinating between governments by way of various legal provisions setting roles, responsibilities, and mechanisms of interaction among federal, provincial, and local governments. However, the implementation of these provisions of the law has been hampered by overlapping jurisdictions, vague directions on how it should operate, and political intervention. The Constitution of Nepal itself recognizes that coordination and cooperation between governments at various levels are required.
The Legislative coordination, article 231 of the constitution, has managed the Legislative interrelation between the Federal and provincial levels. As follows: (1) The Federal Law may be made to cover the whole, or, as the case may be, to a portion of, the territory of Nepal. (2) A State law may be made to cover the whole, or as the need may be, to a portion of the territory of the State. (3) Where two or more States jointly request enactment of laws on any matter in Schedule 6 by the Government of Nepal, the Federal Parliament can enact necessary laws.
Those laws shall only apply to the concerned States. Principles of Federalism: This is the requirement of the legislative role of the three tiers of government. It is a division of powers as well as a legislative relationship at the same time. Article 232 also touches on the principle of federalism. It is The Interrelation of the Federation, Provinces, and Local Levels that the interrelation of the three tiers of government shall be based on cooperation, coexistence, and coordination.
5.2. Executive Coordination:
Article 233 concerns executive relations amongst federal and state governments, stating that one State shall assist the implementation of provisions of law or judicial and administrative orders or decisions of another State. A State may exchange information and consult on matters of mutual interest and concern with another State, coordinate with each other with respect to their legislations and activities, and render mutual assistance. Inter-state Coordination is a major issue of administrative management.
There is a provision of the Inter-State Council in the Constitution to resolve political disputes. There is Article 234, which is only with inter-provincial relations with the federal government for that purpose; a council is under the chair of the Prime Minister, with the chief ministers of the provinces. Coordination between Federal, Provincial, and Local levels: Article 235 is for Coordination between the Federation, State, and Local Levels. To that end, the Federal Parliament shall pass relevant laws to ensure coordination between the Federation, the State, and the Local levels. For the achievement of this goal, the federal parliament has already passed the law named the Federal, Provincial, and Local Level (Coordination and Interrelation) Act 2077. The law created the Intergovernmental Coordination Council (IGCC), chaired by the Prime Minister, for resolving intergovernmental disputes among federal, provincial, and local governments., Sectoral Coordination Committees, which are required to coordinate policies and programs of various government levels, and the Provincial Coordination Committee (PCC), chaired by the Chief Minister, for enabling coordination among provincial and local governments.
These are different committees as well: the National Coordination Council, led by the Prime Minister, with all provincial and local representatives. Other than that, different subject committees have been developed as standby committees to organize different thematic problems. There is also a special committee that deals with the law if any problem needs to be resolved specially.
5.3. Locals and Local-Province coordination:
Similarly, the responsibility of maintaining the coordination between State and Village Bodies or Municipalities and settling the political differences, if any arising, under the respective Village Body, Municipality, and District Coordination Committee, has been delegated by the provincial assembly. In clause (2), the procedure and process in respect of the settlement of disputes have been stated by the constitution as necessary under the provincial law. The Local Government Operation Act (2017) also lays down local-level governance structures, vesting legislative, executive, and judicial powers in the local governments. The Intergovernmental Fiscal Arrangement Act (2017). This Act provides for the financial relations between different levels of government, such that revenue-sharing agreements, equalization grants, and fiscal transfers are guaranteed.
6. Implementation Challenges of Coordination
Despite the constitutional and legislative frameworks of interrelation and coordination among federal, provincial, and local governments, there are several challenges that interfere with their implementation. The challenges stem from political, administrative, financial, and capacity limitations that undermine cooperative governance. Human resource management at government levels is governed by the Civil Service Act and the Provincial Public Service Commission Act.
However, Nepalese bureaucracy remains centralized, limiting institutionalization of federalism. Extended conflicts between federal and provincial governments regarding the deployment of staff and decision-making authority bear testimony to enhanced coordination in administrative control.
7. Political Issues
Political instability and competition for control are some of the greatest difficulties in the application of intergovernmental coordination. Political parties endeavor to consolidate authority rather than nurture cooperative federalism. Party realignments as well as ideological differences result in conflict among the different levels of government, which erodes the spirit of decentralization envisioned. Moreover, provincial governments, who are still in their infancy stage, experience political legitimacy as well as power, which renders them more difficult to coordinate with local governments.
8. Administrative Federalism in Nepal: Issues and Challenges
Adoption of the Constitution of Nepal in 2015 enshrined federalism as the country’s system of government with a vision of three levels of government—federal, provincial, and local—operating in cooperation and exercising autonomy. Administrative federalism, involving the structuring, allocation, and operation of bureaucracy and delivery of services mechanisms at these levels, is at the core of operationalizing federalism. The constitutional basis for administrative federalism is evident from various articles. Article 56 declares Nepal to be a federal democratic republican state with three levels of government. Schedules 5, 6, 7, 8, and 9 of the Constitution list exclusive and concurrent powers for the levels of government, and thereby necessitate a sound administrative machinery for operationalization. Articles 285 and 302 also give the impetus for the system of civil service and intergovernmental administrative structures, visualizing a federal civil service, provincial and local service structures. Nepal, however, has encountered significant obstacles in bringing administrative federalism to reality.
One of the major issues is the vagueness and procrastination in the enactment of federal civil service law. Though Article 285 prescribes a federal law for regulating civil service, the Federal Civil Service Act has not been enacted in its entirety, and the provincial and local governments have remained reliant on the central bureaucracy. The situation has generated tensions regarding staff deployment, appointments, and job security, and the civil servants tend to hesitate serving the provincial or local departments. Again, the lack of a coherent system of intergovernmental personnel management has prevented provinces from yielding the benefits of constitutional assurance of autonomy. For instance, whereas Article 232 provides for cooperation, coexistence, and coordination among the three levels of government, the absence of administrative clarity has generated overlapping authority and resistance from the bureaucracy.
Another immediate challenge is the allocation of resources and administrative capability. Though exclusive powers have been reserved by the Constitution for provinces and local governments in Schedules 6 and 8, policy planning and service delivery hinge on having proper human resources and institutional capability. The provinces do not routinely have trained personnel, technical specialists, and institutional outlets for policy transmission they must greatly depend on centrally based functionaries. The local governments, having been empowered by the Constitution, have similarly been plagued by deficits in capability, and skepticism has emerged concerning whether the federalism has actually decentralized power or transferred centralism to new arenas. The incongruence of constitutional framework and the reality of the administration has also thwarted the principle of subsidiarity on which the federalism rests.
Coordination mechanisms have been yet another area of challenge. The Inter-Provincial Council, as called for by Article 234, and other intergovernmental platforms were supposed to solve conflicts and harmonize policy. The mechanisms have, however, been poorly used, and bureaucratic centralism has remained paramount. Overlapping of bureaucracies in fields of concurrent jurisdiction like education, healthcare, and natural resources has created turf wars across various government levels. For example, federal departments have persisted in maintaining control over policy fields constitutionally devolved from provinces and cities, hurting their autonomy and generating tension in practices of the bureaucracy.
Also, politicization of bureaucracy is a significant challenge. The central and provincial bureaucrats have frequently been hired or shifted based on politics of affiliation and not on merit, diluting accountability and professionalism. The lack of an open career prospect for bureaucrats serving in provinces and local governments has created insecurity and reluctance and again dilutes service delivery. Again, the administrative culture from Nepal’s prolonged unitary regime has not evolved to meet the challenge of a plural, decentralized system. Rather than adopting cooperative federalism, subnational governments have instead been perceived by many bureaucrats as subservient entities and not as equals, defying the constitutional spirit of partnership.
Harmonizing practice and law remains just as problematic. Though the Constitution contemplates a federal, provincial, and local service framework, numerous enabling statutes have been held up or have been framed so as to reinforce central supremacy. The absence of legal certainty regarding provincial and local staff’s recruitment, promotion, and disciplinary powers has created perennial controversies. Judicial clarification, not infrequently useful, has not given decisive rulings on these matters of administrative friction and thereby kept large tracts of the constitutional potential of federalism from being fulfilled.
Overall, Nepal’s administrative federalism is at a crossroads. The 2015 Constitution provides good legal basis for a devolved and cooperative federal system, but practical traction has been restricted by weak legal frameworks, resistance by bureaucracy, ambiguity in the role of institutions, and weak coordination mechanisms. If its federal experiment is to become more robust, Nepal must prioritize the drafting of full-bodied laws on the civil service, the building of subnational unit capacities, de-politicization of the bureaucracy, and institutionalized mechanisms of intergovernmental coordination. Until these challenges are addressed, administrative federalism might become a contested field harmful to the federal vision of the Constitution.
At the end, there are no definite administrative mechanisms and institutional setup undermining coordination among the three levels of government. Overlapping jurisdiction in most instances results in conflicts, inefficiency, and duplicative activities. Bureaucratic inertia, lack of adequate human resources, and technical skills at the provincial and local government levels aggravate the problem. The slow administrative reorganization to adapt to the federal system makes it even more difficult.
9. Financial and Resource Restraints
The fiscal federalism structure in Nepal remains immature, as fiscal imbalances among different levels of government pose a serious threat. While the central government retains considerable control over expenditures, the provinces and local governments have restricted funding and the ability to generate revenues. The gradual release of fiscal transfers, coupled with restricted financial independence, has eroded service delivery at the grassroots level. Second, a poor process of financial accountability results in inefficiencies and chances of misallocation.
10. Constitutional and Legal Uncertainties
Despite constitutional assurances, uncertainties in sectoral jurisdiction between the federal, provincial, and local governments have given rise to jurisdictional conflicts. Uncertainty in legislation defining the mandate and jurisdiction of different levels of government has resulted in conflicts, particularly in education, health, and infrastructure development. This has resulted in slowing down implementation even further by court interventions. At the same time there are some Institutional and Technical Capability Constraints. Federalism requires capable institutions and qualified personnel to coordinate and implement efficiently. However, the majority of local governments in Nepal lack the necessary technical capacity and qualified human resources to carry out their responsibilities efficiently. The poor capacity of provincial and local governments to formulate policies, prepare development works, and use resources hurts the efficiency of the federal system.
11. Policy Recommendations for Effective Coordination
11.1. Institutionalizing a Strong Coordination Mechanism:
Establishing and operationalizing a particular Intergovernmental Coordination Council with federal, provincial, and local government representatives can facilitate regular communication and dispute settlement. The council should be provided with legal and political powers to oversee intergovernmental relations and policy coherence.
11.2. Strengthening Legal and Policy Framework.
Legislation, explicit laws, and regulations defining the roles and mandates of the different tiers of government need to be enacted. Recasting the existing law to eliminate ambiguities, particularly where service delivery functions are concerned, such as education, healthcare, and disaster management, can reduce friction and enhance effectiveness.
11.3. Consolidating Fiscal Decentralization
Nepal can adopt a more balanced fiscal federalism model by providing time-bound financial transfers, allowing local governments to collect their revenues, and enhancing financial accountability mechanisms. Establishing a separate Fiscal Commission to manage resource allocation and resolve financial disputes can improve coordination.
11.4. Human Resource Capacity Building and Training
Investing in local and provincial government officials’ capacity development and training is essential for good governance. The federal government must ensure knowledge-sharing platforms, conduct frequent training programs, and deploy competent personnel to aid lower levels of government. Having a centralized digital governance structure to pool data from federal, provincial, and local governments can allow for the coordination and enforcement of policies. A shared database with up-to-date information on fiscal transfers, development schemes, and public service delivery can reduce inefficiencies and improve decision-making.
11.5. Building Political Will and Cooperative Governance.
Political will from all stakeholders is needed to commit to cooperative federalism. Political parties need to give top priority to decentralization and follow a non-partisan governance approach at all levels. Facilitating consensus-building practices and minimizing political interference in local administration can enhance coordination.
11.6. Learn from the Best International Practices.
Nepal can learn from developed federal systems such as India, Germany, and Canada, where institutionalized mechanisms of coordination have strengthened intergovernmental relations. Adopting elements like an inter-state council, revenue-sharing models, and a federal advisory commission can strengthen Nepal’s model of federalism.
12. Conclusion
Proper intergovernmental coordination and cooperation are required for the successful implementation of federalism in Nepal. Though Nepal’s constitutional design has provided the necessary foundation, persistent bottlenecks in political alignment, administrative effectiveness, fiscal decentralization, and legal clarity limit smooth inter-governmental coordination between federal, provincial, and local governments. Addressing these bottlenecks requires a combination of legal reforms, institutional capacity building, fiscal autonomy, and capacity building. Learning from international experiences and cooperative governance can assist Nepal in shaping its federal governance system and in ensuring effective service delivery to the people.
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