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Articles

Institutional Change in Nepal: Liberalization, Maoist Movement, Rise of Political Consciousness and Constitutional Change

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Pages 145-166 | Received 12 Jun 2019, Accepted 31 Jul 2020, Published online: 13 Oct 2020
 

ABSTRACT

Contradicting the rest of the world’s promptness to discredit communism as an alternative and Francis Fukuyama’s (Citation1992) teleological account of ‘the end of history,’ Nepal witnessed a Maoist revolution between 1996 and 2006. Such a ‘deviation’ from what Fukuyama and others have viewed as the path of development raises questions about the linear progression of history and its implicit dualism of market vs. government. As several Original Institutional Economists have discussed, analytical dichotomies lead to a simplistic understanding of transformation that disregards the multilayered nature of society and, thus, concludes that history unfolds linearly to arrive at a predetermined and homogeneous end. This paper analyzes the social transformation of Nepal that preceded the Maoist revolution, through the lens of Feminist Institutionalism, utilizing a multidisciplinary approach to understand the complexity of the impacts of liberalism-protectionism political changes on Nepali institutions.

JEL CODES:

Acknowledgements

The authors wish to thank the anonymous reviewers for their helpful comments.

Disclosure Statement

No potential conflict of interest was reported by the author(s).

Notes

1 Karl Polanyi’s (Citation1947) adequacy to feminist reformulations is clear as the author entertains some questions that are currently pertinent to feminist theory. He spends, nonetheless, most of his effort rejecting the formalist separation between economy and polity rather than its denial of the familial role in the provisioning process (Waller and Jennings Citation1991, pp. 491–493).

2 Nepal has four religious groups joined by 3 percent of the population or more (Hindu, Buddhist, Muslim and Kiranti), more than 100 linguistic groups and numerous caste and sub-caste groups, as well as 59 nationalities. The groups can be broadly categorized as Caste Hill Hindu Elite (31 percent), Dalits or untouchables of the Hindu caste system (15 percent), Janajati or the group who lived in the Mountains and mainly spoke Tibeto-Burman language (37 percent), and Madhesis or natives of Terai, the plains of Southern Nepal (17 percent) (Lawoti Citation2010, p. 25).

3 In his nationalist treatise, Dibya Upadesh (1774), Shah linked his protectionist monetary policies to state building ambitions: Our money will not go abroad. Send our herbs to India and bring back money. When you acquire money, keep it. If the citizens are wealthy, the country is strong. The King’s storehouse is his people (cited in Liechty Citation1997, p. 3).

4 See Mahesh Chandra Regmi (Citation1978) for details on the Rana taxation system.

5 Despite the fact that Nepal was a combination of different states, where people had different cultures, languages, costume and religious backgrounds, the Shah dynasty was successful in institutionalizing a sense of nationalism, embodied by a single religion (Hinduism), a single language (Nepali), and a single costume (Daura Suruwal for men and Gunyo Cholo for women) (Regmi Citation1978).

6 Jimidari is a system of appointing a functionary known as a Jimidar to collect taxes and promote land reclamation and settlement, whose personal liability is the full collection of the land and other taxes in the Mouja under his jurisdiction, even if lands remained uncultivated for any reason. A similar system in the hills was called the Talukdari system.

7 Sukumbasis (landless) can be theorized as a group of people who maintain barely a de facto possession over the land they occupy. It is a name given to an individual or a group of people who occupy public land such as state forest and or land actively unclaimed by other owners (Ghimire Citation1992, p. 11).

8 Crews (Citation2018) uses the lens of settler colonialism to explain these social movements and political uprising in Nepal since the 1950s. Settler colonialism functions through the replacement of indigenous populations with an invasive settler society that, over time, develops a distinctive identity and sovereignty (Veracini Citation2015).

9 Heavy involvement of outside agents has exerted pressure on Nepali politics throughout history. While India and China play a more direct role (Mishra Citation2004; Baral Citation1994), the involvement of EU and US, along with various non-governmental agencies has to be explored while tracing the development journey of Nepal (Hachhethu Citation2009).

10 Hundis were legal financial instruments that evolved on the Indian subcontinent, used as remittance instruments for the purpose of transfer of funds from one place to another.

11 The process of financial liberalization gained momentum in 1987/88 when Nepal entered into the first and second phase of SAP. The second phase started in the fiscal year 1992/93, which envisaged a greater role and reliance on the private sector (Paudel Citation2005). Several other initiatives were forged in order to meet the need for consumer financing requirements. By the end of mid-July, 2012, altogether 265 banks and non-bank financial institutions licensed by NRB were in operation (NRB Citation2012).

12 According to Madhav Joshi (Citation2010), the landed elites of the rural villages and urban districts have had equal access to the institutional credit.

13 The poverty line for Nepal has been derived on the basis of the 1995–96 Nepal Living Standard Survey (NLSS-I) using the cost-of-basic-needs (CBN) method. Changes in the cost of living have been taken into account using region-specific price indices developed on the basis of NLSS-I 1995–96 and NLSS-II 2003–04.

14 Before the Maoist revolution, Dalits were conspicuously absent from national politics: only one Dalit served as a minister of state between 1960 and 1990 and another was elected to Parliament in the 1990s.

15 Gender equality is far from a reality in Nepal, a highly patriarchal country, where women report high levels of sexual violence, as well as other abuses, across castes. The country, nevertheless, is making progress to improve women’s conditions. In the 2017 elections, women earned 40 percent representation in local governments. Also, after a new civil code in 2018, women are entitled to keep their share of their parents’ property after getting married and their husband’s share if the divorce is his fault.

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