A study of the Evolution of Governance in Nepal

Pramod Dhakal, CFFN, Ottawa, Canada

Proceedings of Unfolding Futures: Nepalese Economy, Society, and Politics
Friday-Sunday, October 5-7, 2007, Ottawa, Canada


Establishing a system of governance that instils rule of law, welfare of people, provision of facilities, standardization and development of trade, education of people, and growth of industry and innovation remained the primary challenge for Nepalese society throughout its history and it remains today. The research reported in this paper has found that Nepal had a rich history of knowledge, innovation, and prosperity until 18th century. Historic anecdotes tell that a proper system of governance must have four faculties: executive, legislative, judicial, and innovative, in intransitive power relations.

There was never a superior geographic boundary, but there existed superior art, architecture, industry, and trade. But the society plunged into darkness when rulers embarked endeavours of territorial expansion and political repression. In general, distributed governance led to sustained innovation and prosperity, whereas the focus on centralization led to short lived progress, oppression and entry to dark periods. Hierarchies, which are the key enablers of a centralized state, were useful only in maximizing the output from past knowledge and skills and in territorial expansion but were not useful for developing sustained peace, equity, and prosperity. The paper recommends that Nepal must seek a prosperous future in massively distributed system of governance. The organization of such systems must be centered on building system of accumulating knowledge and transferring it over to generations through properly engineered collaborative system.


The history of governance in Nepal happens to be a difficult subject of study mostly because of the absence of sufficient historical documents. Systemic documentation and preservation of manuscripts seem to have been a lost art since the time to Mahabharata and Manu Smriti. And modern writings seem to be confined in writing the family trees of the rulers and their praises in bloated decorations. Much needed inference on the history of governance in Nepal have to be drawn from critical examination of traditions, temples, shrines, monuments, and religious texts. This article is an attempt to extract the evolution of governance not as a substitute of history but as attempts to draw lessons for the future of governance in Nepal. It explores the reasons that led Nepal to meet successes and failures in reforming governance in the past. As Nepal has been presented with one more chance to correct the past failures in establishing a viable democracy, prosperous economy, and just society, it is hoped that the information drawn in this article from the history of philosophy, institution building, governance, and prosperity in Nepal would be of value to the readers.

The Old Nepal

Little is known of Nepal before the time of Buddha with sufficient historical evidence and, therefore, religious texts are the only source for the study of governance of the time. Strongly held belief about these texts is that they are the culmination of the efforts of many philosophers and thinkers over centuries. Considering the Hindu and Buddhist philosophies developed in the foothills of the western and middle Himalayas respectively were able to reach far flung places and help shape the fabric of societies away from their places of origin, this whole process of the growth of religion and philosophy in and around Nepal is of profound significance.

The rule of Kiratas in the eastern Himalayas is documented in the Hindu religious epic Mahabharata [1-pp10]. Historians have traced the Kirat era to begin at around 700BC. Around the same time Shakya kingdom of Kapilvastu had become well known in the region. The prosperity of that kingdom in and around 600BC has been revealed through archeological evidence of the existence of towns, gardens, roads, temples, and ponds. “There used to be a council of about five hundred people to help in the local government of Kapilvastu. Both young and old took part in the council, which took place in their common Mote Hall in Kapilvastu [1-pp12].“ However, the fortunes of Kapilvastu dwindled after Buddha (born Siddhartha Gautama in Lumbini Gardens in 567BC) renounced his traditional role and his son Rahul also followed the footsteps of his father.

Although Kapilvastu was later defeated, looted and plundered by a neighbouring kingdom, Buddha’s following grew in the Indian subcontinent, including Nepal. The influence of Buddhism seems to be widespread among the Kiratas by 200BC. Because the countries of those days were largely religious states, they used the teachings of the respective religions as guidelines for the rule. Therefore, at the time Buddhism became a dominant religion in Nepal, it is assumed that Buddha’s teachings played a vital role.

Buddha’s teachings are based on four “Noble Truths” and “Eight Noble Paths”. They emphasized on understanding of the truth, which would lead to peace of mind, then to higher wisdom, and then to enlightenment. “For attaining salvation, one had to observe the morality by abandonment of killing, stealing, incontinence, falsehood, slander, luxury, hankering for wealth, performance of bloody sacrifices, the worship of Sun or the Brahma…Buddha’s teachings were in contrary to orthodox Hinduism which was beginning to be frowned upon by many due to its corrupt practices” [3-pp14]. Buddha’s philosophy was an antithesis of Hindu cast system and his teachings call for treatment of all living things with utmost respect.

Much of Nepal’s history of governance, however, is influenced by Hinduism more than any other philosophy. Hindu rulers at times had managed to steer a significant technical progress and wealth, which is evident in the golden roofed temples, art, artifacts and monuments, such as Pashupatinath temple built around 300AD [4-pp16]. However, little is known about the modality of governance. It is written in the history books that the rulers used Manu Smriti [5-Manu] as the law of governance. Therefore, much of the philosophy of the Hindu principles of governance could be searched from the religious and philosophical texts like Manu Smriti, Mahabharata and Ramayana.

Manu Smriti is a collection of written rules of law and a system of “justice” to uphold the laws. It goes to a great length to convey the necessity of institutionalizing the justice system for instilling peace and prosperity. It also emphasizes that seeking of truth must be an integral part of the deliberation of justice. “Either the court must not be entered, or the truth must be spoken… Where justice is destroyed by injustice, or truth by falsehood, while the judges look on, there they shall also be destroyed”, says Manu Smriti setting strict moral code upon the judges [6, Ch VIII, Verse 13-14]. This gives high precedence to ethics on the lives of the ruler as well as the lives of the citizens. However, religion was given an equal or higher position to ethics and spirituality. This also gave rise to states centered on king treating citizens as subjects – not the people as desired by modern populace.

In the religious states formed time and again in Nepal, Mau Smriti was said to be used as the strict laws of governance, which was neither understandable to common citizens nor gave rooms for the citizens to influence how their country was governed. “But by Sruti (revelation) is meant the Veda, and by Smriti (tradition) the Institutes of the sacred law: those two must not be called into question in any matter, since from those two the sacred law shone forth” [7, Ch II, Verse 10]. These religious laws promoted monarchy as the only form of government and king to represent the divine will of God. And the fear of the king was the name of the game. “Through fear of him all created beings, both the immovable and the movable, allow themselves to be enjoyed and swerve not from their duties” [8, Ch VII, Verse 15]. And king would bring punishment to the delinquent. “Punishment alone governs all created beings, punishment alone protects them, punishment watches over them while they sleep; the wise declare punishment the law” [9, Ch VII, Verse 18]. Although a king was prescribed to be benevolent and just, it was generally accepted that he will be wicked. “A king is declared to be equal (in wickedness) to a butcher who keeps a hundred thousand slaughter-houses; to accept presents from him is a terrible (crime)“ [10, Ch II, Verse 86].

Unlike Manu Smriti, the Mahabharata [11] stands at a much higher philosophical level, espouses fewer controversies, and jives better with modern mindset. This epic gives emphasis on ethical and just rule and inspires people to rebel against unjust rulers. Leaders and common citizens with democratic aspirations can find wisdom in Mahabharata. In its teachings, the epic presents the wealth, pleasure, duty and liberation as the four major goals of a human. It also explains the relationship between individual, society, and the world. Because the governance and religions of its time were closely tied, the role of fate and role of deeds in people’s lives have been intricately presented.

As per Mahabharata, the king and the citizens of a country must adhere to written constitution, institution, rule of law, and Dharma (intrinsic ethics or righteousness). This constitution must outline the real purpose of government and the ruler of the country, which is to protect Dharma – the path to harmony, justice, and peace. The objective of the constitution of a progressive country must be to protect and propagate Dharma in the country. “By progressive we mean in consciousness where humanity is reaching their highest potential in growth, maturity, morals and spiritual knowledge and awareness. [12–SK]” Such a country would be able to minimize calamity, crime and discontent. “But a country devoid of righteousness (Dharma) is lifeless, like a corpse … [and] the positive future of the state is destroyed … its real purpose, values, and heart are empty. [13-SK-AQ]“

The need for a king (a singular ruler) is justified in Mahabharata citing that the human deviates from his righteous duties and stops separating the rights from the wrong if there is absence of a fear of punishment. It says that people protect each other only when they follow righteous path but greed, lust, and anger – the three terrible passions – corrupt people and create confusion and calamity. King (a singular ruler) was, therefore, required for their punishment and to keep peace and prosperity in the country. The punishments were meant to propagate righteousness, wealth and pleasure among people. As per the epic, a king possessed a heritage of divine intelligence and was superior to all the others. In essence, Mahabharata proposed a religious state where the authority of the ruler is ultimately derived from God. However, Mahabharata also stands against the blind following of any ruler and justifies rebellion against a king when he does not uphold those divine rules.

On the duty of the citizens of a righteous country, Mahabharata said, “Their first duty is to elect a [properly qualified] king and perform his coronation. For the sake of the treasury, the subjects should give one fiftieth of their animals and precious metals and a tenth part of their grains. From among them they should choose those who are proficient in the use of weapons, and help the king in the maintenance of the army. A fourth part of the merits of the people will go to the king and a fourth part of their evil also. A disciple behaves with humility in the presence of his preceptor. Even so a subject should humble himself before his king. A king who is honored by his subjects will naturally be respected and feared by his foes.” [14-SK-AQ]

Whatever way the state may have been structured in the early days of structured governance, the religion of the king was to be the only true way and all other ways were condemnable. The religious laws allowed thoughts and actions only if they conformed to the prescribed set of beliefs and behavioral norms primarily made for social control. Most religious states shun the freedom of thoughts, democracy, entrepreneurialism, and human equity – the most sought after characteristics in modern societies.

And, in most part, these states enforced the prescribed norms through dictatorial means and people who questioned those beliefs, such as those who practiced Buddhism, were considered heretic. It is said that Buddhism was almost erased from Indian subcontinent through these edicts during the time of Sankaracharya [17–NT–pp 22]. Amidst this, however, Nepal’s rulers seem to have been more tolerant to Buddhism than those in India.

The sovereignty rested on the king and the citizens as non-sovereign subjects were organized in strictly enforced hierarchies. The power and property bestowed to lower officials is revocable at any time by the higher one and the hierarchy provided the structural foundation of governance. People were categorized into four castes – Brahmin, Kshatriya, Vaisya, and Sudra. Strict dress codes and behavioral codes were defined that distinguished one from the other at all times. Their roles were defined by birth and supremacy of one over the other was defined by those religious rules. Those questioning this hierarchy were non-believers and believers had right to cause a hostility over the non-believers. Security of life and property, therefore, was guaranteed only for the believers.

In the history of Nepal, the progress and innovation seem to have happened at times when rulers showed tolerance towards other religions and views. In those times, the potential of the society seems to have been spent on innovation than in erasing distinctions. All other times the progress seems to have stagnated or even plundered.

Some key lessons for modern governance that can be drawn from the history of early Nepal are the following:

  1. Large body of knowledge can be built by inquiring, accumulating, and consolidating knowledge over sustained period of time.
  2. Prosperity of a society is strong at times when production and distribution of knowledge is maximal. The birth of the unique art, architecture and technology in Nepal seem to have coincided with the propagation of knowledge that happened as Hindu and Buddhist philosophies were spreading in the region.
  3. Artha (wealth), Kama (pleasure), Dharma (duty), and Moksha (liberation) are the four goals of humans, and the role of governance is to create conditions where people can attain their goals.
  4. People should be bound to an institution of governance and rule of law. Transparency of rules, and transparency of the punishment associated with their violation, and deliberation of justice as per the rules is the most profound aspect of governance.
  5. They must elect a ruler who is qualified and incorruptible, and unite around him. “No soul is peaceful in a state without a ruler. In such a state men exploit one another like fish who swallow each other. [15-SK-AQ]”
  6. Only one who is dedicated to the welfare of his citizens should be a ruler. Anarchy and crime will prevail in absence of proper ruler and rule of law. “In a state where anarchy prevails, a group of young women embellished with gold ornaments do not go to the garden in the evening for recreation.”
  7. While, people must pay tax to maintain the institution of governance in accordance with their wealth, the treasury must be meant for protection of the country, citizens, and Dharma.
  8. The provision of facilities, and protection and welfare of citizens is the responsibility of a government. “The feeble and downtrodden, blind, dumb, crippled, orphaned, old, widowed, diseased and distressed should be provided with food, clothing, medicines and shelter.” [16- Verse 12.86.24]

Lichhavi Period

Nepal’s Licchhavi rulers who ruled around 500AD to 800AD improved trade and transit with India and Tibet, introduced coins, trade and transit tax, and also Samantas (like provincial governors) to administer large swaths of land based on the laws prescribed by the central government. And, the most unique feature of Lichhavi rule is Dwaid Sasan – a dual rule of central and provincial governments [18-NT pp24-25]. This was in essence a form of federalism.

Lichhavis also practiced religious tolerance and permitted free discussions on religious creeds. Even the royal family members diverged from their parent’s religion. They let Buddhism, Hinduism and Tantric Buddhism flourish in parallel, and so they did to the literature, art and architecture. Bhrikuti, who is credited for spreading Buddhism to Tibet, was a daughter of a Hindu king Amsuvarma, was given in marriage to the King of Tibet, Srong Tsang Gampo, in around 600AD. Lichhavis also mastered pagoda style of construction, which later found following in China and Japan. Therefore, the prosperity, tolerance, acceptance, and trade were the hallmark of this era.

But soon, following the end of Lichhavi dynasty, Nepal entered into an era of religious intolerance and infighting between the Buddhists and the Hindus [19-NT-pp27]. Works on arts and literature steadily declined and warring princes and feudatories gradually propelled Nepal into a period of relative darkness. Kingdoms disintegrated and became ever smaller. There was neither a clear centre nor a working federation between these kingdoms whose boundaries were always on the move.

Some key lessons for modern governance that can be drawn from the Licchavi period are as follows:

  1. Convergence of ideas and tolerance towards other beliefs, cultures, and ethnicities help accelerate knowledge and innovation, and intolerance brings poverty and degeneration.
  2. Trade brings prosperity and innovation.
  3. A small and landlocked state can develop extensive trade if it focused on high value and low volume tradable products like arts, crafts, ornaments, and knowledge.
  4. Federal states can be as prosperous as non-federal states.

Medieval Nepal

After a long period of hibernation, an era of prosperity emerges in certain pockets of Nepal. One noticeable period of good governance was brought by Malla Dynasty that ruled Kathmandu valley from 1200AD onwards. The Mallas were defeated by Prithvi Narayan Shah, then king of Gorkha, in 1768AD. The most noticeable of times in this period was the rule of Jayasthitimalla (1354-1395AD), when he brought many reforms in governance and gradually consolidated his rule and brought a new era of peace and prosperity in the valley. He brought social reforms based on the Hindu religious laws set out by Manu [20-NT-pp42]. He arranged the Newar citizens of the Kathmandu Valley into four casts and 64 sub-casts. The other people were divided into 36 casts. Certain trades people like sweepers, cobblers, and smiths were declared as untouchables. People of different casts were made to wear their own unique dresses. The sweepers had to work barefoot, bareheaded and bare ears and had to show respect to the higher casts. Although he was able to bring the once lost peace and prosperity in the valley, many of these reforms are contrary to modern human values.

More noteworthy works of Jayasthitimalla were the introduction of fine as a punishment to small offences; valuation of land for taxation not only based on area but also the grade; system of measuring land and houses; standardization of weights and measures; and bringing sense of justice and security in the population. Since his time, the Kathmandu prospered in trade, industry, architecture, art, culture and literature. Mallas re-established the religious tolerance that existed centuries ago. The high quality workmanship and craftsmanship of that time is evident in the temples, monuments and stupas of those days. Houses were built with bricks of high quality and courtyards and streets were paved with bricks and stones. Standardization helped trade and industry to flourish.

In other parts of Nepal, more than fifty kings ruled the west of the Kathmandu valley and a small number of kings ruled the east. However, none came as close to being successful economically and politically as the Mallas of the valley. As the history points out all kingdoms were relatively prosperous but no one paralleled the prosperity of the three in the Kathmandu valley. The reason for this disparity in development could be attributed to the following factors present in the Kathmandu valley:

  1. High fertility, soft terrain, and cool climate.
  2. Higher concentration of people, which helps makes faster progress.
  3. Trade centered economy that attracted skilled people from far flung places.
  4. Focus on knowledge, industry, art, architecture, and innovation.

Some of the lessons that can be learnt from this period relevant for modern governance are:

  1. A state does not require a large geographic size be prosperous.
  2. A state does not require seaways and large ports to be successful in trade.
  3. The ability of the system to deliver justice in accordance with the laws plays a great role in achieving peace and prosperity.
  4. Standardizations of measurements and processes facilitate justice, trade and industry.
  5. Peace and tolerance towards differing thoughts lead to innovation and prosperity.
  6. The industry, trade and agriculture brings more prosperity than the territory of a country.

Shah-Rana Period

In 1742AD, Prithvi Narayan Shah became the king of Gorkha, a small kingdom not so distant from Kathmandu Valley. Immediately after becoming the king, he set out to conquer the valley, which had three kingdoms but all three were the most prosperous of all kingdoms in the region. After 25 years of warfare, Prithvi Narayan defeated the kingdoms surrounding the valley, blockaded its trade routes, resisted the Muslim and British forces, and finally assaulted the valley. These three decades of warfare had not only taught Gorkhali warriors the war strategies and skills much superior to the kingdoms around but also let them develop a system that could wage larger wars.

Prithvi Narayan attacked king of Kathmandu on a day of religious festival, Indra Jatra, when the people converged in the Hanuman Dhoka palace square but fully drunk and intoxicated as “warranted” by traditions. One thousand fully prepared and war hardened soldiers of Gorkha easily overran the unsuspecting and festive people of Kathmandu. King Jaya Prakash Malla fled and Kathmandu fell on the hand of Prithvi Narayan within hours of assault on September 28, 1768AD. Within four months, he took Patan in a bloodless assault on January 1769 and Bhaktapur in a high-casualty assault in November 1769.

Upon taking the valley, Prithvi Narayan expelled all the Christian missionaries and their 62 Nepali followers from his country to shield his kingdom from British infiltration and possible attacks. He, then continued expanding his territory in the Eastern Nepal and reached Mechi River in 1774. However, he met defeats in his ambitions to expand in the west. His territory had extended briefly to Tanahun in the West but had shrunk back to Gorkha from the West at the time of his death on January 10, 1775. However, Prithvi Narayan left behind an able and trained army and military operatives. Because of the long build-up of a great system of war, Nepal’s territory more than doubled after his death despite all quarrels in the palace. However, he spent no time in developing a system of governance. Consequently, all things related to governance degenerated quickly after his death. It could be concluded that Prithvi Narayan was a hero warrior and zero governor, unlike the portrayals painted by Nepal’s history book writers.

Within a few days of the death of Prithvi narayan, family feud ensued in the palace. His heir and eldest son Pratap Singh put his own brother and uncle in detention and then in exile. By the time of his death in November 1977, his multiple wives were already engaged in rivalry and so were his top courtiers. However, his war machinery trained by his apt father was able to take Chitawan, the land south of Gorkha. Yet his son was only 2 years old when Pratap Singh died. His wife Rajendra Laxmi found it advantageous to bring back the exiled royals. She gave war and foreign affairs to Bahadur Shah and controlled the other affairs herself. However, within months Rajendra Laxmi and Bahadur Shah met with colliding ambitions and engaged in purging of the rivals. Having being gained the control of the army Bahadur Shah gained upper hand and jailed the Queen Mother. Then he started the territorial expansion in the West of Gorkha. However, Prithvi Narayan’s brother sided with the jailed Queen Mother and they were able to chase away Bahadur Shah and his followers to India. But once she died in 1785, her rival Bahadur Shah regained power and was able to give continuity to the mission of territorial expansion of his father. But then the child king Ranabahadur Shah entered adulthood and challenged his uncle, who died after spending five years in jail. At the same time, the wives of the new king entered into the power struggle, and a series of murders and counter-murders took place. King Ranabahadur was murdered along with almost hundreds other courtiers and royals in 1805.

Despite unending rivalries in the palace court, Nepal’s war machinery was still making territorial gains. But this ambition got a damper when expanding Nepal was defeat by Chinese Tibet in 1792. But the ultimate end of expansion came when Nepal collided with British Empire that was expanding its own empire in India. Nepal met with a defeat in face of a superior weaponry and numeric strength. They were forced to cede one third of their territory to the British Empire through a treaty of concession called Sugauli Treaty of December 2, 1815 [21-Wiki]. Not only they ceded more than the third of Nepal’s territory to the British but also the confidence in waging future wars with the British. This brought an isolationist era in Nepal. The country was virtually cut-off from the rest of the world and started being consumed in the infighting among the families of the ruling elites. The only government function that they were able to bring it to people was the collection of taxes and wrath to those who could not pay the taxes. Most people of Nepal relied on their own local communities for law and order and economic survival. These local practices of governance gave rise to the endurance that Nepal demonstrated during this dark period.

One significant development of the war 1814-16 was that the British came to realize that Nepal’s army was not just a rag-tag one but a seasoned and professional one. Therefore, at the Treaty of Sagauli, the British not only recognized the sovereignty of Nepal but received permission to recruit Nepalese soldiers into the British Army. This gave rise to the formation of huge Gurkha Regiments, which were the backbones of British Indian forces and played great role in subsequent war Britain staged in the world including WWI and WWII. Although British nationals were forbidden by Nepalese law to enter the country, the battalions formed from General Amar Singh Thapa’s conquered forces were allowed to setup Gurkha recruiters in Nepal and history of being recruited first as warriors, then as night watchmen, and then as hard laborers began in Nepal. However, there is not much positive gain to show in Nepal from the remittances that started flowing in Nepal for the last 200 years. All subsequent rulers became overly dependent on British remittance and goods and got addicted to them to the detriment of Nepal.

Although Sugauli treaty was an important chapter in Nepal’s history, the external threats to Nepal always remained. However, they were not catalyzing any unity in royal households or noble households, but instead the royal feuds and conspiracies kept on spiraling in Nepal. Murders, extra-marital affairs, betrayal of trust, and lies were further accelerated by clan rivalries between the courtiers. Young or inept kings were put in the throne and zealous queen mothers, who had hardly ventured out of the palaces, depended on the courtiers for everything. The competing Pande and Thapa clans usurped de facto power to rule the nation in the name of baby kings.

Amidst all these, Junga Bahadur Kunwar – one of the relative of the Thapa prime minister – emerges in the royal court as an able military figure. Through a series of plots the palace succumbed to two ruthless massacres staged by him in 1846. Junga Bahadur was then able to displace more powerful royals and make a jailed prince into becoming a king and himself the Prime Minister. He consolidated all the power into his own hand, acquired sovereignty into him, and established a family clan called Rana. He then established a system where even the position of prime minister, army general and high positions in the government and the army could be inherited by the people from the same family clan. Such a rule lasted for 104 years until February 1951.

During their 104 years of absolute rule, Ranas were able to copy some British systems that were conducive to their rule. They introduced some level of administrative reforms by dividing Nepal into 35 regions and appointing a Bada Hakim for each who acted like a governor. This was supposed to make it easier for the Ranas to control the population but Bada Hakim’s role overlapped with the role enjoyed by the village councils. They could not view Bada Hakim as one who represented their aspirations; instead they viewed the Bada Hakim as the agent of the king sent to watch over their shoulders. There were some attempts made by Ranas to institutionalize the book keeping and auditing process copied from the British but not much seem to have happened.


  1. Size of a country has no correlation with the prosperity of its people. Kathmandu as a capital of a united Nepal extending from Mechi to Mahakali became dramatically poorer than when it represented the entirety of three quarrelling kingdoms.
  2. Momentum plays a role in systems of war and governance and it does in physics.
  3. System is more important than an individual.
  4. “Feuding royals” earn darkness and poverty in the country. This may be applicable to the “feuding democratic royals” of today as well.
  5. It does not take many generations to lose all edges in art, craft, architecture, technology, and trade when country is not ruled properly.
  6. All expansionist ambitions are short lived but long glorified by inapt rulers.
  7. Imposed rule from the far-centre is despised by the people, whereas locally managed systems are revered and protected.
  8. Sovereignty in the absence of inquiry and enlightenment brings nothing tangible to the people other than hollow pride of being independent.
  9. A country cannot be prosperous by letting its citizens take low-end jobs in foreign countries.
  10. Remittance brings dependence and subservience.

People and the Government

Nepalese people survived for millennia on their own without much help from their rulers. The rulers’ relationship with the people was that of a tax-collector and the tax payer. People depended on each other for survival as much as they can and they left the rest on the hands of the Gods. Leaving the tax-collectors and feudal lords aside, rest of the people made only subsistence living through cooperation, collaboration and small scale trade.

The lives of Nepalese people remained driven by religious laws for their everyday survival. And, depending on their religious association, people used a system of local governance either influenced by Hindu tradition or the Buddhist. Hindu traditions maintained castes and maintained religious hierarchies. But the Buddhist communities tended to be more egalitarian. These communities emerged as micro-units of governances and established some sort of rule-of-law in communities located away from the capital. Everyone in the community helped without remuneration when someone encountered distress such as fire, flood, death and illness. They developed and maintained common infrastructures through collective efforts.

The traditionally practiced system of justice and welfare is known in the Indian subcontinent as Panchayat System, which is of significant interest of research. Although finding exact origin of a tradition was not the motivation for this research, there are many important characteristics of governance successfully carried out by people for millennia worth looking into when developing future models of governance.

For centuries, local governments made decisions based on consensus to avoid unnecessary confrontation, division and tyranny in the village. They did all deliberations in open forum so that they would be transparent, a feat not yet mastered by modern democracies. After studying a tribal panchayat a researcher writes, “The village Panchayat worked on the basis of communal brotherhood, equality and consensus. There is no question of domination. When the Panchayat is in progress, the sarpanch (the President of the elders) is only the president of the meeting; he does not take any decision on his own. He only articulates what the Panchayat decides. There is consensus in all matters; there is no room for power struggle. … Principles of cooperation and collective endeavors were central to society. Education, moral uprightness, non-violence, simplicity, self-restrained life-style, etc., were the values which effected development of the weakest in the society.”[22-JMK]

In general, the local panchayats simplified the work of central government and played a complementary role. Their actions enjoyed authority and acceptance as the deliberations happened in the open mass, respected local social norms, permitted people participation in decision making, and delivered a transparent justice. They made important collective decisions and rules on collaborative endeavors such as the management of local resources, rituals, ceremonies, feasts, festivals, fairs, and work. This system fostered cooperation and fellowship and let the society continue functioning even at the times when the kingdoms were reconfiguring.

However, it should also be noted that practices of punishments based on superstitions, feud with neighboring communities, and violence also prevailed at the time. Many values, norms, and laws were incompatible with the ideals of modern times. Further, there were times when the central government or Bada Hakim could dissolve a local Panchayat or overrule its decisions. There came a time when they were neither permitted to open schools nor to question the corrupt practices of the central authority.

  1. Distributed rule is more desirable than decentralized. Traditional Panchayats (not one cooked by King Mahendra) were more resilient than Rana rule through Bada Hakims.
  2. Internal parallelism and internal competition is as important to advance innovation as is external collaboration and competition.
  3. Smaller the system more likely it will be more transparent and just than big systems managed by “superior breed” of people.
  4. Small systems managed and audited by ordinary people could be less corrupt than large systems managed by trained managers and imported auditors.

Modern Experiments in Governance

Rana regime fell in February 1951 in face of an armed rebellion and an interim government was formed to conduct an election of a constituent assembly to make a democratic constitution. However, no such election was held. Instead, the king appointed prime minister and the ministers from among the leaders of royalist political parties. In 1959 and after eight years of status quo, King Mahendra unilaterally issued a constitution written by the palace operatives. This constitution devised 150 development blocks, 109 electoral constituencies for the House of Representatives, and 30 members at the Upper House of Parliament [23]. One round of popular election was held under the issued “democratic constitution”. Then, using “constitutional provisions”, the king dismissed the elected parliament, jailed popularly elected government caucus, and assumed absolute power in 1960.

The king started a Partyless Panchayat Democracy, which was to be very different than the panchayat practiced from the ancient times. In this system, opening, or belonging to, a political party became a crime against the state and only people who confirmed to the state sanctioned ideology were permitted to sit in the panchayat. Good panchas were appointed to district panchayats and then to central panchayat. With a slogan of “participation of people and decentralization of power”, Nepal was divided into 14 zones, 75 districts, 3,600 village panchayats, and some town panchayats [24].

However, an age of consciousness had already come to Nepal, and more and more youth were joining political parties that operated secretively. The central government recruited spies everywhere to track down dissidents and village panchayats were used for political purpose instead of using them in their traditional roles. As a result individuals, families and villages became each other’s enemies on account of their political alignments and the country became more politicized and more political parties sprung up then ever before. This rendered the establishment of a Partyless Panchayat Democracy a intellectually brilliant but practically bankrupt idea. This system quickly dismantled the traditional social harmony while successfully retaining the economy and political power on the hand of traditional elites. No longer of was it possible to carry out any positive endeavors in Nepal’s villages because of the political tension that brewed underneath.

A massive uprising erupted in 1979 on the streets of Nepal and King Birendra announced on May 24, 1979 a referendum to decide on the type of government. In a questionable and fearful environment the referendum was conducted and the old system was declared a winner by a narrow margin. But this did not deter the political parties, which had already built substantial underground organizations.

Finally, the Panchayat bubble burst open in 1990 due to a popular uprising, now known as Janaandolan I. However, the government that was formed after 1991 election could neither heal old wounds nor take the government to the people. “Every Ministry of the Government has been much more centralized, worse than the Panchayat time, as their Regional Offices are deprived of implementation of development programs. The districts, no matter how much of devolution of authority was talked about, could in no way balance out the weight of the center in Kathmandu. [25]”

In 1996, Communist Party of Nepal (Maoist) – a small party in the parliament holding only 9 seats in 1991 election, submitted a 40 point memorandum citing inequity and corruption in the old state and demanding devolved and drastically changed system where previously marginalized groups get a significant stake. Having their demands being dismissed by the government, they launched an armed rebellion, which lasted for ten years. The most difficult points in their demand were the following four, which remained objected by the political parties in power until 2005:

  1. Abolition of monarchy
  2. Election of a constituent assembly
  3. Proportional representation system
  4. Federal form of government

All four are new to Nepal except for the fact that some form of federal governance (Dwaidh Sasan) was practiced by Lichhabis in a golden era of Nepal’s history. After 10 years of war, parties that were in power in the 1990s came to realize that it would be impossible for them to retain the old centralized form of governance. Compromise was thus required and reached in Novmber 2005, when King Gyanendra had ceased absolute power in Nepal. A political coalition between previously warring parties was thus formed and an unprecedented popular uprising was staged by the people on the streets of Nepal in April 2006. Today there is an interim constitution and interim government in Nepal and the whole country is in the state of transition. And Nepal’s future will be defined by how those four questions are going to be addressed.

The lessons that can be learnt from Nepal’s stunt on governance from 1951 to 2007 are as follows:

  1. Excessive power given to the palace invariably hurts the people.
  2. A country that unleashes state machinery to spy on its own citizens dismantles social cohesion and trust among people to its own detriment.
  3. Although periodic and democratic election is a necessary instrument of democracy, it is possible for the division between the parties to sharpen and problem to grow then being resolved.
  4. Power invariably corrupts a ruler sooner or later after gaining the power.
  5. Giving ability to a single individual or party to control all legislative, executive, and judicial organs is a recipe for failure in governance.
  6. Decentralization of power does not build resilient systems as it cannot exclusively distribute it. It brings hierarchy and subservience but not the competition and innovation.

Diagnosis of post 1990 governance

The popular uprising of 1990 was a revolt of people to be free from the conditions of oppression and deprivation. They entrusted the political leaders the task of upholding freedom, equity, peace, prosperity, and democracy. But the leaders of post 1990 governments could not see the whole picture; they did the service to the able and the vulnerable became left out; social, economic, and political exclusion prevailed.

That the Soviet Union – a socialist state – had just collapsed like a deck of cards, Nepalese politicians thought “universal truth” had been spoken to them by the history. Liberal democracy and free market economy were the solutions to all ills in the society. Having democracy handed to them, they had to bring the liberal economy at the earliest to witness rapid economic growth and hoards of gleaning people thankful to the rulers. With urgency, publicly owned institutions were sold to the private investors at dirt-cheap prices. Elementary school children were subjected to market competition by bringing for-profit private education. Health care system was privatized so it could be “better accessible”. Justice, fairness, and equity became the endeavors to be taken up by the market. In essence, they stood for what existed in Rana rule – serve up the able and forget the vulnerable. On the name of fostering “liberal economy,” all the things that brought inequity were adopted and all the things that brought equity were dismantled.

The primary reason for having a democracy is to instill a system of justice and fairness. Therefore, bringing a “sit back and watch economy” in the expense of justice and fairness could not have been conscious, virtuous, or democratic. Unfortunately, people were fooled by the slogans of democracy and they were presented with an unjust system – contrary to the public interest. Of course, slogan and media can make anything look good until the thing unravels itself and exposes its guts. And, that is what happened at later years of the 1990s in Nepal.

Not that the market economy and liberal democracy are wrong things to have, but inviting them hastily while exclusion, corruption, and circumvention-of-justice remained rampant did not produce the intended result. They became systems without mechanism for proper management and accelerated the division in the society. It was like firing a rocket engine without a control – a sure recipe to not reach the desired destination. Having aligned with the wealthiest nation on earth, the politicians thought that peace and prosperity was not a distant dream to be cherished. They failed to understand the essence that every building needs its own foundation. The market forces were preferred over rule of law and institution building. Consequently, the internal ideological and social division of the Panchayat era became more pronounced. Instead of heading towards peace Nepal headed in an opposite direction.

Nepal’s post 1990 situation looks almost like a vindication to an award winning research published by Dr. Roland Paris. In one of his most referred papers he writes, “[the political] competition can reinforce the very lines of division that defined the conflict. On the economic side, the marketization programmes and the competition associated with increased privatization can reinforce the differences and the gaps between the economic winners and losers in a society. This is particularly dangerous in countries where conflict has been fuelled by distributional inequality. So there is a kind of paradox at the very heart of both a liberal democracy and a liberal market economy”[26-RP]. Where this competition is channeled and moderated by state institutions, it can serve productive political and economic ends and its excesses can be moderated through practices and rules of peaceful competition that also recognize the importance of equity within society.


Establishing a system of governance that instills rule of law, welfare of people, provision of facilities, standardization, and fosters trade, industry, and innovation remained the primary challenge for Nepalese society throughout its history and it remains today. The history of governance of Nepal carried in the research reported in this paper has found ten important characteristics from the periods of progress and revivals experiences in the past.

  1. Nepal had a rich history of knowledge, innovation, and prosperity until very recently.
  2. There did not exist so called superior geographic boundary, but there indeed existed such thing as superior art, architecture, industry, and trade.
  3. Nepal prospered at times when it focused on education, trade, art and industry; and plunged into darkness every time it embarked the endeavors of territorial expansion and political repression.
  4. Nepal practiced a form of federalism more than a thousand years ago as it was entering an era of growth and industry.
  5. Distributed governance led to sustained innovation and prosperity and focus centralization led to short lived progress, oppression and entry to dark periods.
  6. Governance must have four faculties executive, legislative, judicial, and innovative, all connected by intransitive protocols.
  7. Nepal’s history tells us to seek a prosperous future in massively distributed system of governance.
  8. Hierarchical society is useful for pursuing expansionist visions but not for developing sustained harmony, equity, and prosperity.
  9. A vast amount of knowledge can be collected and transferred over generations if collaborative approach of knowledge building is applied.
  10. Freedom, justice, equity, innovation, and prosperity are considered part of our human virtues both by ancient philosophies and modern ones.


[1] Netra B Thapa, A Short History of Nepal, Ratna Pustak Bhandar, Kathmandu, pp. 10, 1981.
[2] Ibid., pp. 12
[3] Ibid., pp. 14
[4] Ibid., pp. 16
[5] Sacred Books of the East: The Laws of Manu, Translation by G. Bühler, Published by Oxford, 1886, Available online as The Laws of Manu, http://www.sacred-texts.com/hin/manu.htm
[6] Ibid., Chapter VIII, Verse 13-14
[7] Ibid., Chapter II, Verse 10
[8] Ibid., Chapter VII, Verse 15
[9] Ibid., Chapter VII, Verse 18
[10] Ibid., Chapter II, Verse 86
[11] Mahabharata, translated by Kamala Subramaniam, published by Bharatiya Vidya Bhavan, Bombay, 1982
[12] Stephen Knapp, “Purpose and Function of Government According to Mahabharata”, published online, http://www.stephen-knapp.com/purpose_of_government_according_to_mahabharata.htm
[13] As quoted in [12]
[14] As quoted in [12]
[15] As quoted in [12]
[16] As quoted in [12] from [11] verse 12.86.24.
[17] Netra B Thapa, A Short History of Nepal, Ratna Pustak Bhandar, Kathmandu, pp. 22, 1981.
[18] Ibid., pp. 24-25
[19] Ibid., pp. 27
[20] Ibid., pp. 42
[21] Sugauli Treaty, Wikipedia, http://en.wikipedia.org/wiki/Treaty_of_Sugauli
[22] Joseph M Kujur, “Gandhian Thought vis-à-vis Indigenous Ideology: Some Reflections for an Integral Humanism in the Third Millennium”, Council for Research in Values and Philosophy, USA, Available online: http://www.crvp.org/book/Series03/IIIB-5/chapter_iv.htm
[23] Poorna Kanta Adhikari, “Political Restructuring”, Institute for Conflict Management, Peace and Development, Kathmandu, May 2007.
[24] Ibid.
[25] Ibid.
[26] Alina Rocha Menocal and Kate Kilpatrick, Towards more effective peace building: a conversation with Roland Paris, Development in Practice, Volume 15, Number 6, November 2005

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