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Nowadays, good governance and anti-corruption have almost become clichés. Everyone talks about them, but nothing concrete is happening, even as the country is rocked by a series of scandals, one after another. Most recently, the Prime Minister formed a 15-member High-Level Good Governance Reform Commission under his own chairmanship. This move seems more an act of folly than a sincere effort to pursue good governance. How can a commission chaired by the Prime Minister point out administrative lapses and deficiencies? And who is going to implement its recommendations? The President?
In his New Year message, even ex-King Gyanendra did not fail to mention good governance and a corruption-free administration. Interestingly, on February 1, 2005, after seizing power, he emphasized two specific points—anti-terrorism and anti-corruption. Anti-terrorism targeted the Maoists, while anti-corruption served to silence parliamentary parties. The course of political events that followed could be summed up as: Anti-terrorism + Anti-corruption = Anti-Gyanendraism. I leave it to the readers to decipher this formula.
Historical records also show that King Mahendra used corruption as a justification for his royal coup in 1960. That coup dismantled a nascent democracy and plunged the country into thirty years of darkness.
Corruption: An Expansive View
Unless we take an expansive view of corruption—beyond the narrow technical definitions of bribery and illegal activities—we cannot understand its intricacies and deeper impacts. Anti-corruption is not just about removing a few rotten apples to save the rest; the real question is, how can we save the apples when the crate holding them is itself rotten? Corruption is not only about violating legal or social norms—it can also become the norm itself, or a way of doing things. We often consider corruption as illegal, but how should we deal with legal corruption, such as state capture?
Years ago, I read a piece in the Bangkok Post about the Thaksin Shinawatra era: “We, Thais, are used to taking a bite or two from the apple, but Thaksin came and posted a sign—‘the apple tree belongs to him.’ That’s what made us angry.” Similarly, during Tsarist Russia, Emperor Nicholas II reportedly told his wife, “Everyone is stealing something from others, except us. This is a country of thieves. Luckily, we don’t need to steal because the whole of Russia belongs to us.”
Wealth Management
For observers like us, corruption and anti-corruption are full of anecdotes, puzzles, and riddles. Consider a few: Had it not been for the Sudan scandal, the first Constituent Assembly (CA) elections in 2008 might never have happened. Without the appointment of Lok Man Singh Karki as head of the CIAA, the second CA elections in 2013 might not have taken place either. What role did Maoist cantonment corruption play in the peace deal? Was the UN responsible for reducing the stipends of Nepali peacekeepers? Would the Nepali Congress have succeeded in its 1950 armed revolution without funding from discontented Ranas? And how did the Maoists finance their war?
We have failed to explore the political economy of corruption—how resources are generated, collected, and distributed to sustain, contain, buy out, or even topple regimes. Corruption is all about wealth (economics) and power (politics): rich people becoming powerful and powerful people becoming rich. These two forces attract each other naturally, like opposite poles of a magnet or opposite sexes. Former King Gyanendra’s desire to reclaim the throne stems largely from the wealth he accumulated after the 2001 palace massacre. Rajabadis increasingly refer to the republican system as a corrupted lootantra, forgetting the corruption that existed under the monarchy. Would the Nepali people have deposed the monarchy if it had not been corrupt? In his book Singha Durbar, Mr. Sagar S. Rana notes that the Ranas resolved the moral dilemma of rulers engaging in business by limiting their investments to public limited companies. The Shahs had no such restrictions. Business (wealth creation) is politics (power acquisition), and politics is business.
Phases of Corruption
Rajabadis often quote King Prithvi Narayan Shah, who said, “There is no sin in taking the lives of bribe givers and takers.” This saying highlights the prevalence and severity of corruption during ancient regimes more than it reflects a genuine state effort to combat it. Modern Nepali history is full of corruption stories, although very few have been scientifically studied. One Swedish anthropologist who conducted a four-year study in Bajhang district described how local resources such as land, forests, and subsidized food were shared among the army, police, the CDO, and the private sector—an illustration of the political economy of corruption at the local level. We’ve repeatedly seen how law firms and engineering consultancies relocate depending on where district judges and engineers are transferred. This is known as a patron–client relationship. Without understanding the whole system, there's little point in analyzing individual parts.
Extractive Corruption
Between 1946 and 1951, the Ranas used corruption as a tool to extract resources from the economy to enrich themselves. They built lavish palaces, bought chandeliers from Belgium, shopped in Harrods in London, and imported cars—even though the mountain regions had no roads. They extracted resources such as land, forest products, minerals, customs duties, and revenue from Gurkha recruitment into the British Army. Internal family disputes over wealth and power sowed the seeds of discontent that eventually led to revolution and their downfall.
Accumulation and Distribution
During the thirty years of Panchayat rule (1960–1990), corruption was used as a tool to accumulate and distribute wealth and power to favored individuals. Anti-corruption efforts were selectively deployed to discipline opponents and silence dissent. A pattern emerged during this period that still influences our policymakers today—the bifurcation of anti-corruption efforts. Petty corruption was left to government institutions, leading to the creation of the Department of Special Police, now known as the National Vigilance Center. Grand corruption was overseen by the royal palace, first through the all-powerful Janch Buj Kendra, and later through the Commission for the Prevention of Abuse of Authority (CPAA), the predecessor of today’s CIAA. This bifurcated approach lies at the heart of Nepal’s ongoing failure to control corruption. Although the Panchayat system thrived on corruption, it also eventually collapsed because of it.
Decentralization and Democratization
Following the end of Rana, Shah, and Panchayat monopolies, the reinstatement of multi-party democracy in 1990 brought with it a resurgence of free-for-all corruption, reminiscent of the post-1950 period. Corruption was effectively decentralized and democratized. Those with political ties enriched themselves. Economic liberalization opened new channels for corruption in banking and finance, the privatization of public assets, insider trading, fraudulent trade practices, license hoarding, gold and drug smuggling, and the horse trading of MPs. While earlier it was wealthy individuals entering politics, now politicians became extremely rich. This rise in the intensity and scale of corruption led to the drafting of a new anti-corruption law in 2002, along with other dramatic reforms.
King Gyanendra’s 2005 takeover was an interlude. As noted earlier, anti-corruption was used as a justification for the royal coup. An extra-constitutional body, the RCCC, was formed, driven by political vendetta.
Institutionalization and Internationalization
In post-Federal Democratic Republic (FDR) Nepal, corruption became institutionalized—a lootantra in the making. Corruption spread across every sector: politics, the economy, sports, society, and even religious and philanthropic spaces, as seen in the golden jala lahari scandal at the Pashupatinath temple. A distinct feature of this period is the rise of the nouveau riche, many of whom either have NRN status or significant foreign business interests. Corruption has thus transcended national borders. Deals are made abroad, with large funds swiftly transferred and deposited overseas—beyond the reach of domestic investigative agencies. Terms like money laundering, golden passports, and tax havens have become the modern language of corruption.
The politics of consensus has fueled corruption through the bhaag-banda (sharing of the spoils) system, where resources are divided, or through the allo-pallo (turn-by-turn) system when they aren’t. In a hung parliament, corruption has become a tool for political survival. Prachanda’s claim of a “magic number” is as tainted by corruption as the power-sharing deal between Deuba and Oli. The same applies to the RSP president eyeing the Ministry of Home Affairs.
Without understanding the political economy of corruption—the distribution of wealth and power among ruling elites—discussions of good governance and anti-corruption are meaningless. Reforming laws and institutions, strengthening agencies, or training personnel will achieve little unless we address this deeper reality.
