“Mismanagement, corruption and misallocation of resources are a common practice among the local bodies. Since the dissolution of the local bodies in 2002, they are functioning without elected people’s leadership and are involved in corruption and misappropriation at a degree never seen before. Corruption and unaccountability in the local bodies were not so widespread when they were governed by elected people’s representatives”. Court petition filed by Anchan Bhattarai for reform of Local Self-Government Act (LSGA) 1999 (Dec.10, 2012).
We have been so much engrossed with national-level politics that there is no time to pay attention to what is happening at the grassroots—at village, town and district levels.
Administratively, Nepal comprises 75 districts, 58 towns or municipalities, and 3,913 village councils. Administrative units established for providing local governance are known, respectively, as District Development Committees (DDCs), Municipalities, and Village Development Committees (VDCs).They were established under a new act enacted in 1999 known as Local Self-Government Act (LSGA). The purpose of the act was to devolve power to local level people’s representatives who were assumed to be more familiar with local needs and priorities.
It is important to mention that although democracy was restored in 1990, it took a decade to bring democracy to the grassroots, whereas a more justifiable approach would have been to prioritize democratization where it matters most—at the local level.
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self-governance statute
Elections for local government representatives held until 1998 had no legal status other than ordinance issued by central authorities. Enactment of local governance statute in 1999 thus launched a new era of legally-mandated devolution of political power that had been exercised by central government. There was some degree of collaboration with local-level political representatives but that had not been statutorily mandated. Decision-making and implementation authority lied exclusively with centrally-appointed government authorities.
The 1999 statute transferred power for local-level administration to village, municipal, and district councils elected one year earlier through general election held at the local level. Village councils were made responsible for drinking water, health, education, transportation, flood control, soil erosion and forestry development. Similar responsibilities were given to Municipalities and District councils with expanded responsibilities for developing industry and tourism potential.
However, the drawback of the new statute was that local governments depended almost entirely on fund transfers from central ministries and locally-generated revenues were hardly adequate to meet even their administrative needs.
Despite the severe resource constraints for improving service delivery, local-level elections and governance helped bring new awareness among the people—of their rights of accessing government services and holding local administration accountable for lapses. This was the instance of real democracy working at grassroots.
Short-lived experiment
Unfortunately, this experiment with local governance was short-lived. The term of locally elected bodies expired in July 2002 and, over more than a decade, no new elections have been held. It is unclear why local elections have to be scuttled but it is rumored that, during insurgency, Maoist rebels had demanded that local governments be dismantled as a pre-condition for holding peace negotiations.
Democracy did return in 2008 with the election of Constituent Assembly but the issue of revival of elected governments at local levels has not been seriously discussed. This gives credence to the allegation that Maoists are opposed to the idea of devolution of power, despite their claims to the contrary.
Money-flow continues
Surprisingly, the absence of democratic governments at local levels has in no way impacted development efforts benefitting the grassroots. This can be seen from the uninterrupted flow of money allocated for local development spending, year-after-year.
During the fiscal year completed last July, budgetary transfers to local (unelected) government units amounted to Rs. 26.2 billion, the bulk of which was in capital transfer. The money was allocated to individual local units determined by some agreed upon formula but, in the absence of detailed information, we can use a bit of prior knowledge to work out average transfer.
Assuming Rs. 3 million transfer, on average, to each of 3,913 village units; Rs. 100 million to each 58 municipal unit; and Rs.100 million to each district unit, the total amount adds up to Rs. 25 billion or slightly less than Rs. 26.2 billion budget allocation.
We must take note of the fact that capacity constraints and implementation delays prevent full utilization of allocated funds but it is safe to assume that a substantial amount of allocations does get used up. For example, data available for Janakpur Municipality show budget allocation of Rs. 154.2 million for 2010/11 and Rs.104.5 million for 2011/12, from which 90 percent was actually spent.
There are several issues involved as to the modality of transfers to local bodies, a few of which we can look at. First, the amounts involved are simply staggering. For instance, capital budget allocation for center-level programs was Rs. 51.40 billion for 2011/12, less than double the amount of transfer to local government units.
Second, even if the amount gets distributed among hundreds of administrative units, allocations for individual units—VDCs, DDCs, municipalities—aren’t miniscule.
or example, three million rupees allocated to my village in Dhanusha District and Rs. 140 million going for Janakpur development—year-after-year—amounts to unprecedented capital infusion into the local economy.
nd third, how have the largesse granted to local units affected life at local level, in terms of quantity and quality of public services made available to the population? The answer is: very little or not at all. Public life, in fact, has steadily deteriorated everywhere, which can be seen from visiting these areas where hardly any government network appears to exist, except for police presence at some remote outposts.
Where does money go?
We are familiar with expressions like absolute power and absolute poverty but rarely of absolute corruption. But absolute corruption is probably an apt characterization of the nature of local governance in Nepal, although most would agree that such characterization applies to all levels of government operations in the country.
Looking at local government finances, we see hardly any evidence of a correspondence between the amount of money made available to local government units and actual outcomes. The efficient use, for example, of Rs. 3 million given to an average village unit annually can establish a school; fund a primary health clinic, or provide for drinking water and sanitation and doing so over a period of ten years can make the village look prosperous.
Similarly, with regard to annual grants made available to municipalities—Rs. 154 million given to Janakpur in the last year alone—can be used to build tens of miles of paved roads; provide for water and sanitation services; finance a number of primary schools and health clinics; or some combination of all these and more. Unfortunately, urban living in Janakpur and in most other places across the country is far worse now than it was a decade or two decades ago. This has to do to some extent with explosive population growth but the extreme level of misuse of public funds has played a larger role.
With low ethical standards applied to the use of government handouts, there is no guarantee that elected officials could have done better. But the fear of public backlash from known or assumed abuses of public funds would have worked as a powerful deterrent for elected officials not to engage in open-ended abuse of resources entrusted to them.
Reportedly, it is not just that local government staff—bureaucrats and security officials—who engage themselves in siphoning off of local development funds; politicians share this largesse too. This evidence comes from a recent decision by the Commission for Investigation of Abuse of Authority (CIAA) “to dissolve All-Party-Mechanisms (APMs)… after it came to the conclusion that mechanisms were involved… in rampant corruption and embezzlement of development budget allocated to local bodies…”
From a review of the local situation—life at grassroots—it looks like our allegiance to democracy begins and stops at the centre. A much more worthwhile effort would have been if we had started instead at the local level—of building democracy from the bottom up!
This brings me to the intent of this write-up: local-level elections need not be held hostage to the messy politics we have at the centre. Democracy is getting weaker by the day these elections are being delayed.
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