The IGR Mechanisms in Nepal

Article 232 of The Constitution of Nepal 2015 has stated that the relationship between the federal, provinces, and local level shall be based on the principle of cooperation, coordination and coexistence. To translate this principle into practice, the Constitution and subsequent Acts and policies have created several institutional structures, such as the National Coordination Council (NCC), Provincial Coordination Council (PCC), Intergovernmental Fiscal Council (IFC), National Natural Resource and Fiscal Commission (NNRFC) and so on. All these mechanisms have their own specified roles to advance the idea of intergovernmental cooperation, coordination, and coexistence and managing conflicts between different levels and layers of governments.

Despite these policies and institutional arrangements demonstrating the state’s commitment to addressing intergovernmental conflicts, in practice, IGR has emerged as one of the most contested and ineffective issues, raising significant questions about the relevance of Nepal’s newly established federal governance system.

Psychological roots of Intergovernmental conflicts

My own field-based interactions and anecdotal evidence indicate that a significant number of intergovernmental conflicts occur at the psychological level. Foremost among these factors is a strong sense of autonomy, particularly among local governments. All 753 local governments perceive themselves as fully independent and autonomous in exercising their exclusive constitutional rights. Consequently, they often attempt to exercise these rights without interference from other government levels, while overlooking the constitutional principle that all 761 governments should operate within a framework of cooperation, coordination, and coexistence.

Few mechanisms exist to facilitate policy and programmatic collaborations among local governments, between local and provincial governments, or between local and federal governments. While District Coordination Committees (DCCs) are positioned to facilitate local government coordination within each district, they have proven largely ineffective, partly due to unclear mandates and partly due to limited resources and leverage over local governments. Similarly, the National Natural Resource and Fiscal Commission (NNRFC) and Intergovernmental Coordination Council (ICC) could play critical roles in facilitating policy and programmatic collaborations across government levels, but their contributions remain ineffective and incomplete.

The second important psychological factor contributing to intergovernmental conflicts stems from federal authorities’ fear of losing traditional control over resources and leverage due to constitutional power devolution, while local and provincial authorities strive to maximize their autonomy. This creates a constant psychological struggle between these governmental entities. Although both political and bureaucratic structures operate under the federal governance framework in principle, there is a tendency in practice to manage local and provincial governments based on federal government directives.

Several factors such as the gradual increase of conditional grants alongside decreasing equalization grants to local governments; delays in formulating critical legislation such as the Civil Service Act and Education Act to facilitate power devolution; and inefficient communication channels between federal agencies and local/provincial government authorities exacerbate this tension. Additionally, federal government allocation of grants to small-scale development projects without local government consultation breaches jurisdictional boundaries and creates further conflict between local and federal governments. Local government authorities consistently complain that political and bureaucratic leadership at the federal level operates with a centralized mindset, hampering federalism implementation. This accumulation of grievances against federal authorities psychologically prepares local governments to resist federal control in various ways.

The third psychological battle revolves around the existence of Province structure in a new governance framework of the country. Several personal interactions with authorities from all three tiers indicate that, both the Local and Federal authorities consider the province structures as a burden to independently exercise power and mobilize resources either at the very top or at the very local level. There has been a dominant public discourse that Province structures are not economically and politically viable for a small economy like Nepal. There is nothing to offer from the province structures, as the Local and Federal structures can easily perform the roles of what Provinces are doing at present. Provinces are also criticized for being highly dependent with the Federal actors from forming governments to its overall execution with very little independent decision-making roles in all their affairs. Thus, there is a tendency from the Federal and Local government authorities to contravene the existence of the provinces and be less cooperative with this newly established structure. Such situation is also creating a potent ground for dyadic as well as triadic intergovernmental conflicts.