The Nepalese public have faced the brunt of the deplorable state of public service delivery for decades. Portugal was in a similar situation before 2006. However, they saw a remarkable improvement in their public services after adopting Simplex. So exploring the model for Nepal can be a worthwhile venture. Continue reading
NA: National Assembly (Upper House, Federal Parliament)
HoR: House of Representatives (Lower House, Federal Parliament)
FPTP: First-Past-the-Post, (Directly elected majority vote, people choose candidates)
PR: Proportional Representation (People vote for political parties, parties choose candidates)
In Sep 20, 2015, the constitution of Federal Republic of Nepal was adopted. It has been more than two years. Last year, the elections of all three orders of government are complete. The last remaining election for the National Assembly is schedule on February 7. Till date Government of Nepal has executed the following laws and directives to aid the process of federalizing the country.
- National Assembly Member Election Ordinance, 2074
- National Medical Education Ordinance, 2074
- Rajshree Janak University Act 2074,
- Education (Ninth-Amendment) Act, 2074
- Disaster Risk and Management Act, 2074
- Employee Adjustment Act, 2074
- A law made by law enforcement agencies to determine legal punishment and to enforce such punishment
- An Act made to arrange health insurance
- An Act made to amend and integrate cooperative laws
- An Act made to arrange for some amendment, integration, adjustment and dismissal of Nepal law(193 existing acts of Nepal were amended in line with the Federal Constitution of Nepal)
- An Act made to arrange for remuneration and convenience of State Chief
- An Act made to amend and integrate the law related to the Devani issue procedure
- The law made for the amendment and integration related to the law of criminal offense
- An Act made to amend and integrate Devani Law
- An Act made to arrange for Language Commission
- An Act made to amend and integrate the prevailing laws related to criminal offenses
- The law governed by the local government to operate
- An Act made to arrange for Rapti Health Science Foundation
- An Act made to amend and integrate the law regarding the rights of persons with disability
- National Women’s Commission Act, 2074
- National Dalit Commission Act, 2074
- Muslim Commission Act, 2074
- Act, 2074 of the Honorable Judge and the Supreme Court Judge, the remedial, the convenience and other terms of service
- Tharu Commission Act, 2074
- Act of the High Courts and Judges of district court, remuneration, convenience and other conditions of service, 2074
- National Inclusive Commission Act, 2074
- Inter-government finance management act, 2074
- An Act regarding the election of the Vice President and Vice President, 2074
- National Natural Resources and Finance Commission Act, 2074
- Tribal People’s Commission Act, 2074
- Regarding the President and Vice President’s Service, 2074
- Madheshi Commission Act, 2074
- Local level election law (including first amendment)
- A Political Party Related Act, 2073 (including the first amendment)
- Number of wards of VDCs and municipalities
- Deployment Act 2074
- Labor Act, 2074
- Electricity Regulation Commission, 2074
- State Assembly Member Election Act, 2074
- Representative Assembly Member Election Act, 2074
- Monetary Markets Act, 2074
- Economic Act 2074
- Federal Contingency Fund Act
- Contribution based social security
- Bonus Fifth Amendments
- Company (First Amendment) Act, 2074
- International Wildlife Control Act of Wildlife and Vegetation, 2073
- National Park and Wildlife Protection (5th Amendment) Act, 2073
- A Political Party Act, 2073
- Bank and Financial Institution Act, 2073
- Regarding local level elections
- An Act made to amend and integrate the prevailing laws of election lawsuit and punishment
- Revision and integration of voter registration law
- Amendment and integration of the law related to the duty and right of the Election Commission
- The law made to arrange for the remedial and convenience of the officials and members of the Federal Parliament
- An Act made to amend the Forest Act 2049
- The law made to arrange the national debt raising rights
- An Act made to amend the Nepal Rastra Bank Act, 2058
- An Act made to amend Loan and Bail Act 2025
- Deposit and Credit Protection Fund Act-2073
- Vehicle and Transportation Business Second Amendment Act, 2073
- Special Economic Area Act 2073
- Audit First Amendment Act, 2073
- The first amendment of the banking lawsuit and punishment is 2073
- Employee Sanction Fund, New Amendment Act, 2073
- The Act made to amend the Supreme Court Act
- An Act made to amend and integrate the duties and rights of the Justice Service Commission
- An Act made to amend and integrate the law of justice administration
- An Act made to amend and integrate the duty of the Judicial Council to the law of duty
- Education Act Eighth Amendment
The Constitution of Nepal has provided both executive and legislative powers to all three form of government. Hence the provincial and local government has also to come up with various laws required for the effective implementation of federalism. The Ministry of Law, Justice and Parliamentary Affairs in a research has identified that 110 federal laws, 22 provincial laws and 6 local level government laws has to be made for the implementation of Constitution of Nepal. In Nepal about 315 laws and 270 regulations are in implementation with the promulgation of federal constitution. 73 out of 315 acts need no amendments, 170 acts need minor amendments and 40 acts needs different amendment bill.
Every one of us commuting in public vehicles in the city can recognize the awful experience in travelling by heavily crowded unmaintained buses while being squeezed up among commuters in most uncomfortable ways. The chronic victims are in fact the ones traveling to work on busy commuting hours when this recklessness is at its peak. For such commuters as we know, travelling between home and work has mostly been the area of tension besides work.
In recognizing the tragedy of the commuters, the central government has made a decision to urge the municipalities of Kathmandu Valley to jointly form a company to operate 50 large buses running around the city. And, given our common belief that state is somehow responsible for taking care of our fundamental necessities like proper public transport system, this decision can easily be perceived as virtuous effort. After all, this government commitment to provide better public commutation service to people seems as a move to rescue us from the daily bad commutation experience. However, this common logic doesn’t draw the complete picture for this matter. There are actually relatively unaddressed but severe realities that can lead us to come at more thoughtful conclusions.
In digging deeper down in search of the root cause of the terrible realities of our public transport service, one has to come across the existence of mafia-like transport syndicate. The transport syndicate being formed by influential associations of transport operators has enabled them to dominate the public transport sector in Nepal despite the horrible transportation service they are providing since decades. By preventing the entry of new transport entrepreneurs in the public transport sector by means of coercion and vandalism, the syndicate of public transport associations has heavily protected the limited number of below standard service providers from the mechanism of free competition that guarantees quality service. Meanwhile, their strong political connection and presence in regulatory committee (i.e., Transport Management Committee) that awards permits to new entrepreneurs in this sector has retained their impunity from law despite their illegal attempts to maintain monopoly.
The idea of government running its own bus fleets to put competitive pressure on the syndicate is understandable. But, it may not be the most sustainable solution to the benefit of public vehicle commuters and taxpayers at large. To clarify such contention, one can always refer to the misery of the state-run enterprises in having to hugely rely on state coffer financed by taxpayers to somehow run its inefficient and loss making operations producing below standard services. Though they carry the objective of running in a profit-model concept that expects them of surviving on their own revenue, the state-system instead offers them the facility to encroach on tax payer’s wealth indefinitely as they lose track of profits. And, given the upcoming transport company is to be functioning within the same system and incentive, we can logically expect same fate for this transport based public enterprise too. Alas, state could be only adding another avenue to leech taxpayer’s wealth in name of providing so-called “basic transport service” to the people without considering the financial burden it generates among the very people.
Having said this, utilizing regulatory tools to establish competitive market environment in the public transport sector can instead lead the state to create an effective solution that doesn’t require manipulating taxpayers’ wealth. By neutralizing the condition generated by the syndicate to keep new transport entrepreneurs away from the market, such measure will compel service providers to compete among each other to provide competitive service efficiently to survive in the market on profits. Most importantly, besides preventing taxpayer’s from the burden of financing transport service, it will enable commuters to travel more conveniently with impressive solutions that yield out of continuous innovation through sustained competition.
This article was originally published by Labisha Uprety in The Kathmandu Post on October 2, 2016.
Shree Namsaling Higher Secondary School, established in 2006BS, is a sizeable community school located in Namsaling, Ilam. It has close to 45 ropanis of land but fewer than 350 students. The place is scenic—misty and cool in the mornings.
A colleague and I were studying a number of private and community schools in the area. The vice principal of the school was kind and welcoming, and answered all my questions patiently. The teachers were, by and large, genuinely interested in teaching the children. The school-ground, where children played happily, was big enough to take long walks on. But one look at the school’s SLC results, and everything else would seem trivial. The 10th graders in particular were performing dismally, especially in Maths, English and Science. Although I believe that SLC results are hardly the best indicator of a child’s performance, exam results are an important means to assess student progress.
However, what began as an assessment of exam results led to an eventual examination of the power structure between the school management committee (SMC) and the institution. Every school has an SMC, which is largely comprised of parents of those studying in the school. But there is also space for ‘donors’, which is usually used by political parties to step formally into the school. The principal of the school is also part of the SMC; so is one teacher elected from the pool of teachers.
In a very strange turn of events, none of the community schools we visited had an active principal; all were managed by the vice-principal. One was reportedly away on informal visits, and two had mysteriously failed to turn up at the schools when the audit season came. The money that each community school gets—a sum divided under numerous headings such as salaries and scholarships—requires only the principal’s and the head of the SMC’s signature for mobilisation. It then requires no further monitoring throughout the school year and is examined by auditors at the end of the school year, again handled usually by the principal alone. The audit reports list repair and infrastructure costs. But the teachers state that even classrooms have been without doors for a long time.
We have been more than aware that problems in public schools stem from management practices and the infiltration of politics in them. Private schools are hardly all virtuous, but they deliver better exam results and are generally not an active political breeding ground. One thing missing from community schools is the effective incentivising of the management system and teachers. This is not to say that all private schools practise this. But public schools could begin with incentivising the management system to educate children better rather than pocketing the change with every other transaction.
Hire and fire policy
Teachers in public schools may be better trained than those in private schools, but what good is the training when teacher absenteeism is rife? In particular, those teaching Maths, Science and English seem to continually drop out of public schools and opt for entering the bureaucracy formally, leading to dismal results in these subjects.
A performance-based salary incentive for the contribution—in terms of time, effort and output—for both the SMC members and teachers would perhaps make for a better model, while also allowing for timely checks on monetary transactions. Though the law has provisions for school inspections, this is a rarity in rural areas, where school representatives frankly said that they had never seen a school inspector during their long service at the school.
Community schools rank fairly low in terms of exam results, but it would be premature to conclude that they have all failed. There are many examples of how certain public schools have managed to draw students. These schools hire private teachers to fill in teaching gaps and charge students—usually only those who are directly taught by the private teachers—a small fee to pay them. The flexibility to hire and fire staff is important in an education system that should be retaining only the best teachers. Of course, this does not mean people can be fired without due reason and process; it simply means that the mechanism should be in place and practised when the need arises.
Henry Hazlitt’s book “Economics in One Lesson” is a rigorous case against the ideals of government interventionism in the market economy. In this book, Hazlitt takes an angle first conceived by Frederic Bastiat, an 18th century French Economist. Bastiat famously quoted, “Government is the great fiction, through which everybody endeavours to live at the expense of everybody else”, which was to say, the idea that government works for all is as big a lie as sun revolves around the earth. It only sounds nice in fiction and idealism.
In reality a government while arguing for a case, totally disavows another part of the economy. For example, when a government says it will provide benefits to certain sector like agriculture, because it is “vulnerable” or “important”, what it is actually doing is taxing the productive sector and funnelling the money into a competing sector that might not be as productive. For many years, the Nepalese government has been subsidising the petroleum products through a government monopoly, but has the government ever considered where the subsidy is funded from. It is ultimately funded from the taxpayers’ money, from different sectors of an economy.
The most important argument he makes is on “Broken Window Fallacy”. The idea of “Broken Window” is that when a glass window breaks, the owner has to replace it. This circulates the money to the producer of the glass, the carpenter, the transporter and similarly around a large section of the economy, which stimulates economic activities. Hazlitt argues that this fallacy wrongly assumes that it is the breaking of the glass window that stimulates the economy through increase in circulation of money. Rather, if the glass had never been broken, the money could have been invested in an alternative sector, which would further revitalise the economy. The breaking of the window has merely diverted money into another endeavour which would have been better if avoided. In de-constructing “Broken Window Fallacy”, Hazlitt makes a strong case against Keynesian Economists-economists who follow the economic doctrine professed by John M. Keynes.
In another case, Hazlitt posits that “progressive taxation,” which is identified as all noble, also hurts the economy. When the rich in an economy are taxed higher, the amount they can save and re-invest decreases. Since they have a higher marginal propensity to save and a higher marginal propensity to invest in comparison with poorer individuals, this amount that could have been invested back in an economy is lost. As a result, it hampers the productive capacity of an economy.
The book also furthers its case against minimum wage law which is a popular political agenda, even in Nepal. He argues that “minimum wage” in idealism tries to uplift the living standard of poorer classes in society. However, in reality it actually hurts the poorer classes, because minimum wage increases the cost of production for a producer. The producer then has to lay off the workers to decrease its cost. As such what was seen as a way of helping the poor ultimately hurts them.
Hazlitt furthers criticises many policies that seem noble in political eyes but do not make economic sense. When the policies are not economically viable, no matter how much benevolent they seem, they will decrease the economic dividends a nation derives from a free functioning market. He makes an strong case against protectionism, taxation, subsidising certain industries at the expense of another, etc.
This book is an influential criticism against some of the intriguing fallacies in Political Economy. However, the book lacks somewhere in providing policy measures for certain economic challenges like depression, controlling inflation, or social challenges like distributive justice. This doesn’t necessarily undermine the value of “Economics in One Lesson.” This book does more than merely point to solutions of the economic challenges; it helps us understand the multidimensional phenomenon that “market” is. This book explains, eloquently, how any form of government intervention has counter-productive effects in a market economy, no matter the intentions. Often times, the unintended consequences outweigh the intended benefits.
For a country, where economic development has been sluggish at best, and socialist policies are taken as virtues to development rather than stumbling blocks towards free functioning of an efficient market, this book is a great read.