Nepal’s democratic transition was a historic achievement, born out of years of struggle against autocracy and exclusion. The promise was clear: a more inclusive, transparent and accountable political system that would work for all Nepalis. However, in recent years, that promise appears increasingly under threat—not from overt dictatorship or conflict, but from a more insidious danger: crony capitalism, underpinned by corruption and rent-seeking behavior.
Instead of fulfilling the vision of a just and equitable society, Nepal’s political and economic systems are becoming instruments of private gain. Political power is being used not to deliver public service, but to protect vested interests, distribute favors and reward loyalty. As a result, the foundations of democracy are weakening, and inequality, injustice, and disillusionment are growing.
Graft in daily life
One of the clearest signs of Nepal’s corruption problem is the widespread practice of bribery in daily government work. People often complain that they have to pay extra money to get basic services—like getting a driver’s license, registering land or receiving government help. This kind of small-scale corruption is not just occasional; it has become a regular part of the system. Many lower-level officials take bribes, often with the knowledge or silent approval of their bosses. Because of this, public services no longer work fairly, and people lose trust in the system. Along with this, Nepal is now facing several big corruption scandals, such as irregularities in the construction of Bhairahawa and Pokhara airports, cheating in government purchases, and growing cases of human trafficking. These examples show how deep and serious corruption has become in the country.
Patronage over meritocracy
In a healthy democracy, public appointments and opportunities should be based on merit. In Nepal, however, political patronage has become the norm. Government contracts, licenses and even civil service positions are often awarded to those with political connections, not competence. This has created a dual economy—one that rewards allegiance over ability, and another that marginalizes the capable yet unconnected. Such practices discourage innovation, weaken institutions, and dishearten the youth.
Policy manipulation
Nepal’s business elite, particularly those with political ties, have increasingly influenced laws and regulations to serve their own interests. This includes securing tax exemptions, inflating budgets and establishing monopolies that block competition. Regulatory frameworks are often tailored to fit the needs of a few, undermining the spirit of fairness and market integrity. In effect, public policy is being captured and privatized.
Public procurement sans accountability
Large-scale corruption is particularly rampant in public procurement. Infrastructure, health and education projects are plagued by inflated costs, poor quality, and delayed completion. Contracts are frequently awarded without open bidding, leading to the misuse of public funds. Instead of serving the people, these projects often serve the contractors and politicians who collude behind the scenes. The result is a chronic under-delivery of essential services.
The capture of financial institutions
Even Nepal’s financial institutions are not immune. Several cooperatives and commercial banks are believed to be controlled by political actors or their close allies. These institutions have been used to launder money, issue unsecured loans to cronies and bypass financial oversight. Such practices not only promote corruption but also put ordinary depositors and the overall financial system at risk.
Consequences for the nation
The cumulative effect of corruption and rent-seeking is deeply damaging. Economic growth is stifled because genuine entrepreneurs are crowded out by politically connected firms. Inequality worsens as elites accumulate wealth while basic services for the public remain poor. Most dangerously, public trust in democratic institutions is eroding. When citizens lose faith in the rule of law and the fairness of the system, democracy itself is at risk.
Furthermore, the politicization of oversight institutions—such as the Commission for the Investigation of Abuse of Authority (CIAA), judiciary and police—has rendered many of them ineffective. These bodies are meant to serve as guardians of accountability, but they often appear reluctant or powerless to act against those in power.
The way forward
Addressing these challenges requires more than superficial reforms. It demands structural change and political will. Strengthening anti-corruption laws, ensuring transparency in public procurement and depoliticizing state institutions are essential. Political party financing must be regulated, and the independence of watchdog agencies must be guaranteed. Whistleblowers and investigative journalists must be protected, and a culture of ethical leadership must be cultivated.
Equally important is the need for civic engagement. Citizens must demand accountability, participate actively in governance and resist the normalization of corruption. Democracy does not end at the ballot box—it must be defended and deepened every day.
Conclusion
Nepal’s democracy was built with the hope of justice, equality and opportunity. Allowing that hope to be squandered by corruption and cronyism would be a profound betrayal. Crony capitalism is not just an economic issue—it is also a political and moral one. Unless addressed with urgency and courage, it threatens to undo the democratic gains made over decades. Nepal cannot afford to let democracy become a tool for private profit. It must remain a force for public good.
