1.7. Multi-level governance and Nepal: informal governance, civil society governance, local governance, cooperative governance, corporate governance and United Nations Organization

Multi-level governance

Multi-level or multi-sector governance refers to a governance approach that involves collaboration and coordination across different sectors or areas of governance to address complex and interconnected challenges. It recognizes that many issues facing societies today, such as poverty, climate change, public health, and sustainable development, cannot be effectively addressed by a single sector or government alone.

Key features of multi-level governance include:

  • Interdisciplinary Collaboration: Multi-sector governance brings together stakeholders from various sectors, including government agencies, civil society organizations, private sector entities, academia, and communities. It encourages collaboration and information-sharing across these sectors to leverage their expertise, resources, and perspectives.
  • Policy Integration: Multi-sector governance promotes the integration of policies and actions across different sectors to achieve coherence and alignment. It involves breaking down silos and addressing issues holistically, recognizing the interdependencies and interconnectedness among different sectors.
  • Stakeholder Engagement: Multi-sector governance emphasizes the active involvement and engagement of stakeholders in decision-making processes. It encourages participation from diverse groups, including marginalized communities, to ensure that policies and actions are inclusive, equitable, and responsive to the needs and aspirations of all stakeholders.
  • Shared Responsibility and Accountability: Multi-sector governance recognizes that addressing complex challenges requires shared responsibility among various stakeholders. It promotes collaborative decision-making, shared ownership of goals, and mutual accountability for outcomes. It also emphasizes transparency and mechanisms for monitoring and evaluating progress.
  • Adaptive and Flexible Approach: Multi-sector governance acknowledges the dynamic and evolving nature of challenges. It requires an adaptive and flexible approach that can respond to changing circumstances and emerging issues. This may involve iterative processes, continuous learning, and adjusting strategies and actions as needed.
  • Knowledge and Information Exchange: Multi-sector governance promotes the exchange of knowledge, information, and best practices across sectors. It encourages the use of evidence-based decision-making, research, and data to inform policies and actions. It also fosters learning and capacity-building among stakeholders.

Multi-sector governance is particularly relevant for addressing complex and interconnected challenges that transcend sectoral boundaries. It allows for a comprehensive and collaborative approach to problem-solving, drawing on the expertise and resources of multiple sectors. By breaking down silos and promoting collaboration, multi-sector governance aims to enhance the effectiveness, efficiency, and inclusiveness of governance processes and outcomes.

In Nepal, multi-sector governance is increasingly recognized and promoted, especially in areas such as sustainable development, disaster management, and social inclusion. The government, civil society organizations, and development partners are working together to foster collaboration and coordination among different sectors to address the country's diverse challenges and achieve sustainable development goals.

Informal Governance

Informal governance refers to the unwritten, unofficial, and non-institutionalized practices, norms, and networks that influence decision-making and governance processes alongside formal structures. It operates outside of formal legal frameworks and official channels, yet it significantly shapes the functioning and outcomes of governance in many contexts. Informal governance can coexist with formal governance systems or even fill gaps left by them.

Here are some key characteristics and examples of informal governance:

  • Non-Institutionalized Practices: Informal governance operates through informal practices and relationships rather than established institutions. It involves informal networks, personal connections, and social norms that influence decision-making and resource allocation.
  • Customary and Traditional Systems: In some societies, customary or traditional systems of governance prevail alongside formal structures. These systems are often based on cultural traditions, norms, and values, and play a significant role in resolving disputes, managing community affairs, and maintaining social cohesion.
  • Patronage and Clientelism: Informal governance can involve patron-client relationships, where influential individuals or groups provide benefits or resources in exchange for loyalty or support. This practice can undermine merit-based decision-making and lead to corruption and inequality.
  • Parallel Power Structures: Informal governance may include the existence of parallel power structures or networks that operate alongside or in competition with formal institutions. These structures often arise in contexts where trust in formal institutions is low, or where certain groups or interests have gained significant influence outside of formal channels.
  • Social Norms and Values: Informal governance is influenced by social norms, values, and customs that shape behavior and expectations. These norms can impact decision-making, resource allocation, and the enforcement of rules and regulations.
  • Informal Economies: Informal governance is often intertwined with informal economies, which operate outside of formal regulatory frameworks. Informal economies encompass activities that are not officially registered or regulated, such as street vending, informal labor, and unregistered small businesses.
  • Community-Based Governance: Informal governance can manifest through community-based systems of governance, where local communities organize themselves to manage common resources, resolve disputes, and make collective decisions. These systems are often based on local knowledge, customs, and participatory practices.
  • Influence on Policy and Decision-Making: Informal governance can influence formal policy and decision-making processes through various means, such as lobbying, informal networks, and social pressure. Informal actors, such as interest groups, community leaders, or influential individuals, may exert significant influence on policy outcomes.

Informal governance can have both positive and negative implications. It can provide flexibility, efficiency, and responsiveness to local contexts and needs that formal governance may struggle to achieve. However, it can also be prone to exclusion, corruption, and abuse of power if not guided by principles of transparency, accountability, and inclusivity.

It is important for governments and policymakers to understand and engage with informal governance to ensure that it aligns with broader societal goals and values. Striking a balance between formal and informal governance can contribute to more effective and inclusive decision-making processes.

Informal governance in Nepal 

Informal governance in Nepal plays a significant role alongside formal structures and processes. Here is a summary of informal governance in Nepal:

  • Customary Practices: Nepal has a rich history of customary practices and traditions that continue to influence governance at the local level. Customary systems, such as caste-based hierarchies and community-based dispute resolution mechanisms, play a role in decision-making and conflict resolution.
  • Political Patronage: Informal networks and patron-client relationships exist in Nepalese politics, where influential individuals or groups provide resources or favors in exchange for loyalty or support. This can result in nepotism, favoritism, and unequal access to resources and opportunities.
  • Community-Based Governance: Community-level governance is prevalent in Nepal, particularly in rural areas. Local communities often organize themselves to manage common resources, settle disputes, and make collective decisions. These community-based systems operate based on social norms, cultural values, and traditional practices.
  • Informal Economies: Nepal has a substantial informal economy, including activities such as street vending, informal labor, and unregistered businesses. These sectors operate outside formal regulations and contribute significantly to the country's economy.
  • Parallel Power Structures: Informal networks and power structures often coexist alongside formal institutions. These networks, formed through social affiliations, ethnicity, or political associations, can wield significant influence over decision-making processes and resource allocation.
  • Influence on Policy: Informal actors, such as interest groups, community leaders, and influential individuals, have the ability to shape policy outcomes through lobbying, social pressure, and informal networks. This influence can affect the formulation and implementation of government policies.
  • Challenges and Opportunities: While informal governance can provide flexibility and responsiveness to local needs, it also presents challenges, such as exclusion, corruption, and lack of accountability. Balancing the influence of informal governance with formal structures and ensuring transparency and inclusivity are key challenges.

Understanding and engaging with informal governance in Nepal is important for effective policy-making, ensuring equitable resource allocation, and promoting inclusive governance. It requires a comprehensive approach that combines formal institutions with traditional practices, community participation, and efforts to address corruption and power imbalances

Strengths and weaknesses of informal governance in Nepal:


  • Flexibility and Adaptability: Informal governance systems in Nepal often exhibit flexibility and adaptability, allowing them to respond quickly to local needs and circumstances. Informal networks and practices can be more responsive to the specific context and dynamics of communities, enabling them to address issues that may be overlooked or neglected by formal governance structures.
  • Cultural Relevance: Informal governance in Nepal often aligns with cultural norms, traditions, and social practices. It draws on centuries-old customs and values, which can enhance social cohesion, promote a sense of identity, and maintain a sense of community ownership and responsibility.
  • Conflict Resolution: Informal governance systems, such as community-based dispute resolution mechanisms, have been effective in resolving conflicts at the local level. These systems often involve mediation, negotiation, and consensus-building, providing accessible and culturally appropriate avenues for resolving disputes and maintaining peace.
  • Local Knowledge and Expertise: Informal governance systems in Nepal leverage local knowledge and expertise. They tap into the wisdom of elders, community leaders, and traditional practitioners who possess deep understanding and insights into local issues, resource management, and sustainable practices.


  • Lack of Accountability and Transparency: Informal governance in Nepal can suffer from a lack of formal mechanisms for accountability and transparency. Decision-making processes may be opaque, leading to potential biases, favoritism, and corruption. The absence of clear rules and procedures can undermine fairness and the equitable distribution of resources.
  • Exclusion and Discrimination: Informal governance systems in Nepal are often rooted in social hierarchies, caste-based systems, and traditional power structures. These systems can perpetuate exclusion, discrimination, and inequalities, particularly against marginalized groups such as Dalits, women, and ethnic minorities.
  • Limited Legal Framework and Protection: Informal governance operates outside the legal framework, which can lead to a lack of legal protections for individuals and communities. In the absence of formal regulations, vulnerable populations may face exploitation, coercion, or denial of their rights.
  • Inconsistent Application: Informal governance systems may vary in their application and implementation across different communities and regions. This inconsistency can lead to confusion, inequality, and differing outcomes for individuals and communities depending on their proximity to power centers or influential actors.
  • Limited Scope and Coverage: Informal governance systems, while effective at the local level, may have limited reach and coverage. They may not address broader systemic issues or adequately represent the interests of marginalized or marginalized communities who lack a voice or representation within these systems.

Balancing the strengths of informal governance in Nepal with the weaknesses requires efforts to promote accountability, inclusivity, and transparency. Recognizing the importance of formal legal frameworks, ensuring representation of marginalized groups, and incorporating elements of participatory decision-making can help address the weaknesses and maximize the positive contributions of informal governance systems.

Civil Society Governance

Civil society governance refers to the role and participation of civil society organizations (CSOs) in governance processes. Civil society encompasses a wide range of non-governmental, non-profit organizations that operate independently from the government and the private sector. Civil society governance recognizes the importance of including diverse voices and perspectives from these organizations in decision-making, policy formulation, and implementation.

Here are key aspects and features of civil society governance:

  1. Advocacy and Representation: Civil society organizations act as advocates for specific causes, interests, or communities. They represent the voices of marginalized groups, promote social justice, and hold governments accountable for their actions. Through their advocacy efforts, CSOs contribute to shaping public policies and influencing governance processes.
  2. Civic Engagement and Participation: Civil society governance encourages active civic engagement and the involvement of citizens in governance. CSOs provide platforms for citizens to participate in decision-making, express their views, and contribute to policy discussions. They often engage in community mobilization, awareness campaigns, and grassroots initiatives to promote citizen participation.
  3. Expertise and Knowledge: Civil society organizations often possess specialized expertise and knowledge on specific issues. They conduct research, gather data, and analyze policy matters, contributing valuable insights and evidence to inform decision-making processes. Their expertise helps bridge the gap between technical knowledge and policy formulation.
  4. Service Delivery and Social Welfare: Many civil society organizations engage in service delivery activities, addressing social welfare needs and providing essential services to communities. They fill gaps left by governments and the private sector, particularly in areas such as healthcare, education, environmental conservation, and poverty alleviation.
  5. Watchdog and Monitoring Functions: Civil society organizations play a watchdog role, monitoring governance processes and ensuring transparency and accountability. They scrutinize government actions, policies, and spending, highlighting issues of concern, and advocating for improved governance practices.
  6. Collaboration and Partnerships: Civil society governance involves collaboration and partnerships among civil society organizations, governments, and other stakeholders. CSOs often work together with governments, businesses, and international organizations to address common challenges, share resources, and jointly develop solutions.
  7. Legal Framework and Regulation: Civil society governance operates within a legal framework and regulatory environment. Governments have a responsibility to create an enabling environment that allows civil society organizations to operate freely, express their views, and engage in governance processes without undue restrictions.
  8. Diversity and Inclusivity: Civil society governance emphasizes diversity and inclusivity, ensuring that marginalized groups and underrepresented communities have a voice in governance processes. It promotes gender equality, social inclusion, and the rights of vulnerable populations.

Civil society governance is crucial for democratic societies as it provides checks and balances, fosters citizen participation, and brings a plurality of voices and perspectives into governance processes. It complements formal governance structures and contributes to more inclusive, responsive, and accountable governance.

Civil society governance in Nepal 

Civil society governance in Nepal has played a significant role in shaping the country's democratic processes, policy formulation, and social development. Nepal has a vibrant civil society sector consisting of non-governmental organizations (NGOs), community-based organizations (CBOs), advocacy groups, and other civil society entities. Here are some key aspects of civil society governance in Nepal:

  1. Democracy and Human Rights Advocacy: Civil society organizations in Nepal have been at the forefront of advocating for democracy, human rights, and social justice. During the pro-democracy movement and the subsequent transition to a federal democratic republic, civil society played a crucial role in mobilizing citizens, advocating for constitutional reforms, and ensuring the inclusion of marginalized groups.
  2. Service Delivery and Development Initiatives: Civil society organizations in Nepal have been actively involved in addressing social welfare needs and providing essential services to communities. They work in areas such as education, health, rural development, poverty alleviation, gender equality, and environmental conservation. These organizations often collaborate with government agencies and international partners to implement development programs.
  3. Grassroots Mobilization and Empowerment: Civil society governance in Nepal focuses on empowering marginalized communities and fostering grassroots mobilization. Many organizations work closely with local communities, providing them with knowledge, skills, and resources to participate in decision-making processes, access their rights, and pursue sustainable development initiatives.
  4. Conflict Transformation and Peacebuilding: Following the end of the Maoist insurgency and the signing of the Comprehensive Peace Agreement in 2006, civil society organizations played a crucial role in conflict transformation and peacebuilding efforts. They supported peace negotiations, facilitated dialogue, promoted reconciliation, and worked towards the integration and rehabilitation of former combatants.
  5. Policy Advocacy and Monitoring: Civil society organizations in Nepal engage in policy advocacy and monitoring to hold the government accountable and promote good governance. They actively participate in policy discussions, contribute research and expertise, and monitor the implementation of policies and programs. These organizations play a watchdog role, exposing corruption, human rights abuses, and governance failures.
  6. Women's Rights and Social Inclusion: Civil society governance in Nepal has been instrumental in advocating for women's rights, gender equality, and social inclusion. Many organizations focus on empowering women, advocating for gender-responsive policies, and addressing issues such as gender-based violence, discrimination, and unequal access to resources and opportunities.
  7. Network Building and Collaboration: Civil society organizations in Nepal foster collaboration and networking among themselves, as well as with government agencies, donor organizations, and international partners. Networks and coalitions strengthen collective advocacy efforts, promote knowledge sharing, and enhance the capacity of civil society to influence governance processes.

The Government of Nepal has recognized the importance of civil society governance and has taken steps to create an enabling environment for civil society organizations. However, challenges such as limited resources, regulatory constraints, and occasional tensions between the government and civil society actors still exist. Continuous efforts to ensure the independence, inclusivity, and effectiveness of civil society governance are crucial for Nepal's democratic development and social progress.

Strengths and Weaknesses of civil society governance in Nepal


  • Grassroots Presence: Civil society organizations in Nepal have a strong grassroots presence, allowing them to directly engage with and understand the needs and aspirations of local communities. This proximity enables them to implement programs and initiatives that address specific challenges faced by marginalized groups and remote areas.
  • Advocacy and Policy Influence: Civil society organizations in Nepal have a long-standing tradition of advocacy and policy influence. They effectively raise awareness about social issues, champion human rights, and influence policy decisions at various levels of governance. Their advocacy efforts help shape laws, policies, and development plans in a way that reflects the interests and concerns of the people.
  • Service Delivery and Development: Civil society organizations in Nepal have played a crucial role in delivering essential services and implementing development programs, especially in areas where government presence is limited. They contribute to filling gaps in areas such as education, healthcare, sanitation, and livelihood opportunities, thereby improving the quality of life for many people.
  • Social Inclusion and Empowerment: Civil society organizations in Nepal have been at the forefront of promoting social inclusion and empowerment. They advocate for the rights of marginalized communities, including women, ethnic minorities, and Dalits. Through their programs, they provide platforms for marginalized groups to participate in decision-making processes and access resources, helping to reduce inequalities.


  • Resource Constraints: Many civil society organizations in Nepal face financial and resource constraints, limiting their capacity to implement programs and sustain their operations. This hinders their ability to scale up their impact and respond effectively to emerging challenges.
  • Limited Capacity and Expertise: Some civil society organizations in Nepal may face challenges in terms of organizational capacity and technical expertise. This can limit their effectiveness in carrying out research, policy analysis, and program implementation. Strengthening organizational capacity through training and support can help address this weakness.
  • Fragmentation and Lack of Collaboration: The civil society sector in Nepal is diverse and consists of numerous organizations working on different issues. While this diversity can be a strength, it can also lead to fragmentation and lack of collaboration among organizations. Greater coordination and collaboration among civil society organizations could enhance their collective impact and avoid duplication of efforts.
  • Dependence on External Funding: Many civil society organizations in Nepal rely heavily on external funding sources, which can make them vulnerable to changes in funding priorities and availability. Diversifying funding sources and strengthening sustainability mechanisms can reduce dependence on external funding.
  • Limited Reach and Representation: Despite efforts to be inclusive, some civil society organizations may face challenges in reaching and representing all sections of society, particularly those in remote and marginalized areas. It is essential to ensure that the voices and needs of all communities, including those that are geographically or socially isolated, are adequately represented in civil society governance processes.

Addressing these weaknesses requires concerted efforts from civil society organizations, the government, and other stakeholders. Strengthening organizational capacity, promoting collaboration, diversifying funding sources, and ensuring inclusivity can help overcome these challenges and further enhance the effectiveness of civil society governance in Nepal.

Local Governance

Local governance in Nepal is an important component of the country's overall governance structure. It refers to the process of decentralizing power and authority to local levels of government, empowering local communities to make decisions and manage their own affairs. The Constitution of Nepal 2072 lays the foundation for a federal structure with three tiers of government: federal, provincial, and local.

Here are key aspects of local governance in Nepal:

  1. Local Government Structure: Nepal has a local government structure comprising municipalities at the urban level and rural municipalities at the rural level. These local bodies are responsible for providing public services, implementing development plans, and addressing local issues.
  2. Devolution of Power and Resources: Local governance in Nepal emphasizes the devolution of power, functions, and resources from the central government to the local levels. This devolution aims to ensure local decision-making, accountability, and service delivery based on the needs and priorities of the communities.
  3. Local Elections: Local governance in Nepal is facilitated through regular local elections. These elections allow citizens to elect representatives at the local level, ensuring their direct participation in decision-making processes. Local elected representatives serve as a bridge between the community and the government.
  4. Service Delivery and Infrastructure Development: Local governments in Nepal are responsible for delivering essential public services such as education, healthcare, water supply, sanitation, road infrastructure, and local development initiatives. They play a vital role in improving the quality of life and promoting socio-economic development at the grassroots level.
  5. Local Planning and Budgeting: Local governments prepare and implement local development plans and budgets based on the specific needs and priorities of their respective areas. This ensures that local resources are allocated efficiently and effectively, addressing the unique challenges and aspirations of the local communities.
  6. Community Participation and Social Inclusion: Local governance in Nepal emphasizes community participation and social inclusion. It promotes the active involvement of citizens, civil society organizations, and marginalized groups in decision-making processes, ensuring that the voices of all sections of society are heard and considered.
  7. Inter-Governmental Coordination: Local governance in Nepal involves coordination and collaboration among different levels of government, including the federal, provincial, and local levels. Inter-governmental coordination is crucial for effective policy implementation, resource sharing, and resolving jurisdictional issues.
  8. Capacity Building: Building the capacity of local government officials and elected representatives is essential for effective local governance. Capacity-building programs and training initiatives are conducted to enhance their skills in areas such as planning, budgeting, project implementation, and citizen engagement.

While local governance in Nepal has made significant progress in recent years, there are still challenges that need to be addressed. These challenges include limited financial resources, capacity constraints, bureaucratic hurdles, and ensuring the meaningful participation of marginalized groups and women in decision-making processes. Continued efforts to strengthen local governance systems and address these challenges are crucial for promoting inclusive and sustainable development at the grassroots level in Nepal.

Strengths, Opportunity & Way forward

Strengths of Local Governance in Nepal:

  • Grassroots Representation: Local governance in Nepal provides an opportunity for grassroots representation, allowing local communities to elect their representatives and have a direct say in decision-making processes.
  • Proximity to Communities: Local governments are physically closer to communities, enabling them to better understand local needs, aspirations, and challenges. This proximity facilitates targeted and context-specific development planning and implementation.
  • Community Engagement and Participation: Local governance encourages community engagement and participation, promoting a sense of ownership and empowerment among citizens. It allows them to contribute to local development plans, prioritize projects, and actively participate in the decision-making process.
  • Service Delivery: Local governments are responsible for delivering essential services, such as education, healthcare, infrastructure development, and water supply, directly to the communities they serve. This ensures that services are tailored to local needs and are more accessible and responsive.
  • Resource Allocation and Planning: Local governance allows for resource allocation and planning that aligns with the priorities and aspirations of local communities. It enables them to allocate resources efficiently, targeting areas that require immediate attention and addressing local development gaps.

Opportunities for Local Governance in Nepal:

  • Capacity Building: There is an opportunity to enhance the capacity of local governments, officials, and elected representatives through training programs and skill development initiatives. Strengthening their knowledge and expertise will enable them to effectively carry out their roles and responsibilities.
  • Technology and Innovation: The use of technology and innovation can greatly enhance local governance in Nepal. Opportunities exist to leverage digital platforms, e-governance solutions, and data-driven decision-making to improve service delivery, transparency, and accountability.
  • Collaboration and Partnerships: Local governments can leverage partnerships with civil society organizations, private sector entities, and development partners to enhance their capacity, access resources, and collaborate on projects and initiatives. Building strong partnerships can lead to more effective and sustainable development outcomes.

Way Forward for Local Governance in Nepal:

  • Institutional Strengthening: Efforts should be made to strengthen the institutional framework of local governance in Nepal. This includes improving governance structures, streamlining administrative processes, and enhancing accountability mechanisms at the local level.
  • Fiscal Decentralization: Enhancing fiscal decentralization by providing local governments with greater fiscal autonomy and financial resources can enable them to effectively carry out their responsibilities and implement local development plans.
  • Community Empowerment: There should be a focus on empowering local communities through capacity-building programs, awareness campaigns, and strengthening citizen participation mechanisms. This will enable communities to actively engage in decision-making processes and take ownership of local development initiatives.
  • Gender Equality and Social Inclusion: Ensuring gender equality and social inclusion is a crucial aspect of local governance. Efforts should be made to address existing inequalities, promote the participation of marginalized groups, and ensure that their voices are heard and considered in decision-making processes.
  • Knowledge Sharing and Learning: Facilitating knowledge sharing and learning platforms among local governments, stakeholders, and development practitioners can promote exchange of best practices, lessons learned, and innovative solutions. This will contribute to continuous improvement and innovation in local governance practices.

Overall, strengthening local governance in Nepal requires a multi-faceted approach that includes institutional reforms, capacity building, community empowerment, and partnerships. By leveraging strengths, capitalizing on opportunities, and addressing challenges, local governance can play a vital role in achieving sustainable and inclusive development at the grassroots level in Nepal.

Cooperative Governance

Cooperative governance in Nepal refers to the system of governance that involves the participation and collaboration of cooperative organizations in decision-making processes and the management of cooperative enterprises. Cooperatives are member-owned organizations that operate for the benefit of their members, who are both producers and consumers. In Nepal, cooperative governance plays a significant role in promoting economic development, social empowerment, and sustainable livelihoods. Here are some key aspects of cooperative governance in Nepal:

  • Cooperative Legislation: Nepal has a legal framework that governs cooperatives, including the Cooperative Act and related regulations. This legislation provides the basis for cooperative governance, defining the rights, responsibilities, and governance structure of cooperatives.
  • Member Participation and Democracy: Cooperative governance in Nepal emphasizes the principles of member participation and democracy. Members have the right to participate in decision-making processes, elect representatives, and contribute to the governance of the cooperative. General assemblies and regular meetings provide platforms for member engagement and decision-making.
  • Cooperative Management: Cooperative governance involves the management of cooperative enterprises. Cooperatives in Nepal have elected boards of directors or management committees responsible for overseeing the operations, financial management, and strategic direction of the cooperative. Effective management practices ensure the sustainable growth and viability of cooperative enterprises.
  • Education and Training: Cooperative governance in Nepal recognizes the importance of education and training for cooperative members and leaders. Cooperative institutions, government agencies, and non-governmental organizations provide training programs to enhance the knowledge and skills of cooperative members in areas such as cooperative management, financial literacy, marketing, and governance.
  • Cooperative Federations and Associations: Cooperative federations and associations serve as collective platforms for cooperative governance. They facilitate cooperation, coordination, and advocacy among cooperatives, representing their interests at the national and international levels. These federations and associations play a crucial role in providing support services, promoting best practices, and advocating for favorable policies for cooperatives.
  • Social and Economic Impact: Cooperative governance in Nepal contributes to socio-economic development and empowerment. Cooperatives provide opportunities for income generation, employment, and poverty reduction, particularly in rural areas. They facilitate access to markets, credit, and resources for small-scale producers and marginalized communities.
  • Cooperative Auditing and Oversight: Cooperative governance involves auditing and oversight mechanisms to ensure transparency, accountability, and compliance with cooperative regulations. Regular financial audits and inspections are conducted to monitor the financial health and operations of cooperatives, safeguarding the interests of members and stakeholders.
  • Cooperative Networks and Linkages: Cooperative governance promotes networking and linkages among cooperatives, enabling knowledge sharing, cooperation, and mutual support. Cooperative networks facilitate market linkages, joint initiatives, and the exchange of best practices, fostering the growth and resilience of cooperatives.

To further strengthen cooperative governance in Nepal, it is essential to focus on capacity building, strengthening cooperative institutions, promoting innovation and technology adoption, and fostering an enabling policy environment. Empowering cooperative members, enhancing financial sustainability, and promoting social inclusion are crucial for the continued growth and success of cooperative enterprises in Nepal.

Strengths & Opportunities

Strengths of Cooperative Governance in Nepal

  • Economic Empowerment: Cooperative governance in Nepal provides economic empowerment to members, especially marginalized and disadvantaged groups. Cooperatives enable small-scale producers and workers to collectively engage in economic activities, access markets, and improve their livelihoods.
  • Grassroots Participation: Cooperative governance encourages grassroots participation, giving members a voice in decision-making processes. Members have the opportunity to actively participate in the management, planning, and development of their cooperative enterprises, fostering a sense of ownership and empowerment.
  • Social Cohesion: Cooperatives promote social cohesion by bringing people together around common goals and shared interests. They build trust, solidarity, and cooperation among members, creating a sense of community and fostering social bonds.
  • Local Development: Cooperative enterprises, through their local focus and community-based approach, contribute to local development in Nepal. They generate employment opportunities, support local economies, and contribute to sustainable and inclusive growth at the grassroots level.
  • Risk Sharing and Mutual Support: Cooperative governance allows members to share risks and collectively address challenges. Cooperatives provide a platform for mutual support, enabling members to pool resources, access credit, and mitigate individual risks.

Opportunities for Cooperative Governance in Nepal:

  • Market Access and Value Chain Integration: Cooperative governance can leverage opportunities for market access and value chain integration. By facilitating collective marketing, product diversification, and value addition, cooperatives can enhance the competitiveness of their members in domestic and international markets.
  • Innovation and Technology Adoption: There are opportunities for cooperatives in Nepal to adopt innovative practices and technologies. Embracing digital platforms, e-commerce, and modern agricultural practices can enhance efficiency, productivity, and market linkages for cooperative enterprises.
  • Cooperative Education and Training: Investing in cooperative education and training programs can strengthen the knowledge and skills of cooperative members and leaders. Training initiatives can focus on areas such as cooperative management, financial literacy, entrepreneurship, and product quality enhancement.
  • Policy Support and Legal Framework: An enabling policy environment and a supportive legal framework are crucial for the growth and sustainability of cooperative governance in Nepal. Opportunities exist to advocate for favorable policies, reforms, and regulations that facilitate the development and expansion of cooperative enterprises.
  • Partnerships and Collaboration: Cooperatives can explore partnerships and collaboration with government agencies, development organizations, and private sector entities. Collaborative initiatives can provide access to technical assistance, funding, and market linkages, enhancing the capacity and competitiveness of cooperative enterprises.
  • Social and Environmental Responsibility: Cooperatives have an opportunity to prioritize social and environmental responsibility in their governance practices. By promoting fair trade, sustainable production methods, and social impact initiatives, cooperatives can contribute to the achievement of social and environmental goals.

By capitalizing on their strengths and leveraging these opportunities, cooperative governance in Nepal can play a significant role in promoting economic empowerment, social cohesion, and sustainable development at the grassroots level. Continued support, capacity building, and collaboration among cooperatives, stakeholders, and government agencies are essential for realizing the full potential of cooperative governance in Nepal.

Corporate Governance

Corporate governance in Nepal refers to the system of rules, practices, and processes by which companies are directed, controlled, and operated in order to protect the interests of shareholders, stakeholders, and the broader society. It encompasses the mechanisms and structures that govern the relationships between a company's management, board of directors, shareholders, and other stakeholders. In Nepal, corporate governance plays a crucial role in promoting transparency, accountability, ethical behavior, and long-term sustainable growth. Here are key aspects of corporate governance in Nepal:

  • Legal and Regulatory Framework: Corporate governance in Nepal is governed by laws, regulations, and guidelines that set out the rights and responsibilities of various corporate stakeholders. The Companies Act, Securities Act, and related regulations provide the legal framework for corporate governance in Nepal.
  • Board of Directors: The board of directors plays a central role in corporate governance. In Nepal, companies are required to have a board of directors responsible for overseeing the management, strategic direction, and decision-making of the company. The board is accountable to shareholders and is responsible for safeguarding their interests.
  • Shareholder Rights and Protection: Corporate governance in Nepal emphasizes the protection of shareholder rights. Shareholders have the right to participate in decision-making processes, vote on important matters, and receive timely and accurate information about the company's financial performance and operations.
  • Transparency and Disclosure: Transparency and disclosure are fundamental principles of corporate governance in Nepal. Companies are required to disclose relevant information to shareholders, regulators, and the public in a timely and accurate manner. This includes financial statements, annual reports, and other material information that may affect the company's performance.
  • Ethical Practices and Corporate Social Responsibility (CSR): Corporate governance in Nepal encourages ethical behavior and responsible business practices. Companies are expected to adhere to ethical standards, promote integrity, and demonstrate corporate social responsibility by considering the interests of stakeholders and contributing to the well-being of society.
  • Auditing and Internal Controls: Effective corporate governance in Nepal involves strong auditing and internal control mechanisms. Companies are required to conduct regular financial audits, appoint independent auditors, and establish internal control systems to ensure the accuracy and reliability of financial reporting and to prevent fraud and mismanagement.
  • Independent Directors and Board Committees: Independent directors and board committees play a vital role in corporate governance by providing unbiased oversight and specialized expertise. Companies are encouraged to have independent directors on their boards and establish committees such as audit committees and remuneration committees to ensure checks and balances.
  • Corporate Governance Practices in Financial Institutions: Financial institutions, including banks and insurance companies, are subject to specific corporate governance requirements. These institutions are required to comply with regulations and guidelines issued by the regulatory authorities, such as the Nepal Rastra Bank (central bank) and the Insurance Board.

To further enhance corporate governance in Nepal, ongoing efforts should focus on strengthening regulatory frameworks, promoting greater transparency and disclosure, enhancing shareholder activism, promoting professional development and training for directors and executives, and fostering a culture of ethics and accountability in the corporate sector. Continued engagement and collaboration among regulators, companies, investors, and other stakeholders are crucial for the effective implementation of corporate governance principles in Nepal.

Strengths & Opportunity of Corporate Governance in Nepal


  • Regulatory Framework: Nepal has established a regulatory framework that governs corporate governance practices. The Companies Act, Securities Act, and other regulations provide a foundation for promoting transparency, accountability, and good governance in companies.
  • Board Independence: Corporate governance in Nepal emphasizes the importance of independent directors on boards. Independent directors bring diverse perspectives, expertise, and objectivity to decision-making processes, ensuring that the interests of shareholders and stakeholders are properly represented.
  • Shareholder Protection: Corporate governance in Nepal focuses on protecting shareholder rights and interests. Shareholders have the right to participate in decision-making, access information, and vote on important matters, providing a mechanism for holding management accountable.
  • Audit and Financial Controls: Corporate governance in Nepal emphasizes the implementation of auditing and internal control systems. Regular financial audits and internal controls help ensure the accuracy and reliability of financial reporting, minimizing the risk of fraud and mismanagement.
  • Corporate Social Responsibility (CSR): Companies in Nepal are increasingly recognizing the importance of corporate social responsibility. Corporate governance practices promote ethical behavior, responsible business practices, and contributions to social and environmental well-being.


  • Enforcement Challenges: Despite the existence of regulations and guidelines, the enforcement of corporate governance practices in Nepal faces challenges. Limited resources, capacity, and oversight mechanisms can hinder effective enforcement and monitoring of compliance.
  • Lack of Awareness and Education: There is a need to enhance awareness and education about corporate governance principles and practices among stakeholders, including directors, executives, shareholders, and employees. Limited understanding can impede the adoption and implementation of good governance practices.
  • Insider Control and Nepotism: Nepalese companies sometimes face challenges related to insider control and nepotism, where decision-making power is concentrated within a select group of individuals, often based on familial or personal relationships. This can lead to conflicts of interest and undermine transparency and accountability.
  • Minority Shareholder Protection: While efforts have been made to protect shareholder rights, further improvements are needed in safeguarding the interests of minority shareholders. Measures to enhance minority shareholder representation, voting rights, and access to information can strengthen corporate governance practices.
  • Lack of Independent Directors: Despite the emphasis on independent directors, there is still a shortage of qualified independent directors in Nepal. Increasing the number and expertise of independent directors on boards can enhance corporate governance and provide more effective oversight.

Addressing these weaknesses requires a collaborative approach involving regulators, industry associations, professional bodies, educational institutions, and other stakeholders. Efforts should focus on strengthening enforcement mechanisms, promoting education and training programs, fostering a culture of corporate governance, and encouraging diversity and independence in board structures. By addressing these weaknesses, Nepal can further strengthen its corporate governance practices and promote sustainable and responsible business conduct.

United Nations Organization

The United Nations (UN) has been involved in governance-related initiatives in Nepal, particularly during the country's transition from a monarchy to a federal democratic republic and its subsequent peace process. The UN has supported Nepal in various areas, including constitutional reforms, elections, peacebuilding, human rights, and socio-economic development. Here are some key aspects of the UN's governance-related activities in Nepal:

  • Peace Process and Conflict Resolution: The UN played a significant role in supporting Nepal's peace process, which aimed to address the long-standing conflict between the government and Maoist rebels. The UN facilitated dialogue, monitored ceasefires, and supported the integration and rehabilitation of former combatants.
  • Constitution and Electoral Support: The UN provided technical assistance and expertise in the drafting of Nepal's new constitution. It supported the electoral process by providing guidance on voter registration, election administration, and monitoring. The UN also assisted in the establishment of the Election Commission and facilitated voter education campaigns.
  • Rule of Law and Human Rights: The UN has worked with the Nepalese government and civil society organizations to strengthen the rule of law and promote human rights in the country. It has supported initiatives to enhance access to justice, promote gender equality, combat discrimination, and address transitional justice issues.
  • Capacity Building and Institutional Strengthening: The UN has focused on capacity building and institutional strengthening in Nepal's governance institutions. It has provided technical assistance, training, and resources to government agencies, civil society organizations, and local authorities to enhance their governance capabilities.
  • Socio-Economic Development: The UN has supported Nepal in achieving its socio-economic development goals, particularly in areas such as poverty reduction, healthcare, education, and infrastructure development. It has partnered with the government and other stakeholders to implement development programs and projects that contribute to inclusive and sustainable development.
  • Coordination and Partnerships: The UN has played a coordinating role among various development partners, government agencies, and civil society organizations working on governance-related issues in Nepal. It has facilitated dialogue, knowledge sharing, and collaboration to maximize the impact and effectiveness of governance initiatives.
  • Disaster Risk Reduction and Climate Change: The UN has supported Nepal in addressing challenges related to disaster risk reduction and climate change. It has assisted in developing policies and strategies to mitigate the impact of natural disasters and build resilience at the community and national levels.

The UN's governance-related activities in Nepal aim to promote democratic governance, human rights, peace, and sustainable development. By working closely with the Nepalese government and other stakeholders, the UN strives to strengthen governance institutions, enhance accountability, and promote inclusive and participatory decision-making processes.

Strengths & Weaknesses of Governance by the United Nations Organization in Nepal:


  • International Expertise and Support: The UN brings international expertise, experience, and resources to support governance initiatives in Nepal. It can provide technical assistance, capacity building, and guidance based on best practices from around the world.
  • Neutral and Impartial Facilitation: The UN's involvement in governance processes in Nepal offers a neutral and impartial platform for dialogue and negotiations. It can help bridge gaps, facilitate consensus-building, and promote inclusive decision-making among different stakeholders.
  • Coordination and Partnerships: The UN plays a crucial role in coordinating efforts among various development partners, government agencies, and civil society organizations. This coordination helps avoid duplication of efforts, promotes synergy, and maximizes the impact of governance initiatives.
  • Focus on Peace and Conflict Resolution: The UN's expertise in peacebuilding and conflict resolution has been valuable in Nepal's transition from conflict to peace. It has supported dialogue, mediation, and reconciliation efforts, contributing to the overall stability and governance in the country.
  • Human Rights and Rule of Law: The UN emphasizes human rights and the rule of law in its governance activities. It supports efforts to strengthen legal frameworks, promote accountability, and protect the rights of vulnerable groups, thus contributing to a more inclusive and rights-based governance system.


  • Limited Local Ownership: The involvement of the UN in governance processes can sometimes result in limited local ownership. Local actors may perceive the UN's interventions as externally driven, which can undermine their sense of ownership and commitment to the governance initiatives.
  • Capacity Building Challenges: While the UN provides technical assistance and capacity-building support, building sustainable local capacity can be a challenge. There may be limitations in transferring knowledge and skills effectively to local institutions and ensuring their long-term effectiveness.
  • Dependence on External Funding: Governance initiatives by the UN often rely on external funding sources, which may not always be consistent or predictable. This dependency can limit the sustainability and continuity of the governance programs and projects in Nepal.
  • Political Sensitivities and Contextual Challenges: The political landscape and sensitivities in Nepal can pose challenges for the UN's governance interventions. Navigating complex political dynamics, addressing power imbalances, and engaging with various political actors can be difficult, potentially impacting the effectiveness of UN-led governance efforts.
  • Coordination and Fragmentation: While coordination is a strength, it can also be a weakness if not managed effectively. Ensuring effective coordination among multiple stakeholders, including government agencies, development partners, and civil society organizations, requires robust coordination mechanisms and clear lines of communication.

Addressing these weaknesses requires a balanced approach that emphasizes local ownership, sustainability, and context-specific solutions. The UN should strive to engage with local actors, build local capacity, and adapt its approaches to the specific governance context in Nepal. Collaborating closely with the government, civil society, and other stakeholders can help address these weaknesses and maximize the impact of governance initiatives in the country.

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  • Anonymous
    Anonymous August 30, 2023 at 9:37 AM

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