| Summary: |
Nepal’s federal constitution marked the end of a long conflict. Despite its limitations, it is hugely successful in one respect: peace has endured. The political settlements framework looks at how changes in the distribution of power in the years preceding the conflict made earlier institutions unworkable. However, the new constitution did not fully reflect the emergent distribution of power nor is it established that the way in which the constitution is being implemented will fully support economic development and political inclusion. Constitutions everywhere are works in progress and Nepal is no exception. However, in the face of challenges, this evolution can proceed in different directions. The interdependent evolution of the distribution of power (the political settlement) on the one hand, and the constitutional, institutional and policy rules that satisfy these groups on the other is important to track. This is what our political settlement studies contribute to. Madhesh province and the broader Terai were critical contributors to the mobilizations that led to the new constitution. However, unlike other parts of Nepal where inclusion was also strongly demanded, in the Terai, mobilizations were often organized around ethnic identity and ethnic exclusion issues. The demand for strong provinces based around ethnic identity was also a particularly strong demand in Madhesh province. Irrespective of the motivations behind the demands for strong provinces, the province is an essential coordinating body for making federalism work in an inclusive rather than centralizing way. Otherwise, with a federal sphere and 753 local governments, evolution is likely to revert back to centralization. Unfortunately, because the demand for powerful provinces was initially interlocked with ethnic identity issues, the balance of forces that put together the current constitution ensured that the powers of the provincial sphere were severely limited. Moreover, many of even these constitutional powers are not fully implemented. Looking at the implementation problem using the political settlements lens allows us to understand this paradox and the problems it generates. It also helps to identify the forces pushing in different directions. For Nepali policymakers and development partners wishing to ensure that future policies and interventions support the broadening of inclusion and economic opportunities, these underlying forces are important to understand. This can help to ensure that policies work to strengthen the embedding of inclusion rather than inadvertently supporting organizational interests seeking a reversion to excessive centralization.
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