CHAPTER 1
INTRODUCTION
1.1. Background of the Study
Corporate governance is the system of
rules, practices and processes by which a company is directed and controlled.
Corporate governance essentially involves balancing the interests of a
company's many stakeholders, such as shareholders, management, customers,
suppliers, financiers, government and the community
Corporate governance refers to the
structures and processes for the direction and control of companies. Corporate
governance concerns the relationships among the management, Board of Directors,
controlling shareholders, minority shareholders and other stakeholders. Good
corporate governance contributes to sustainable economic development by
enhancing the performance of companies and increasing their access to outside
capital.
Corporate Governance provide the
framework for identifying the key practical issues: the rights and equitable
treatment of shareholders and other financial stakeholders, the role of
non-financial stakeholders, disclosure and transparency, and the
responsibilities of the Board of Directors.
The aim of Good Governance in the Public
Sector (International Framework) is to encourage better service delivery and
improved accountability by establishing a benchmark for good governance in the
public sector. The International Framework is not intended to replace national
and sectorial governance codes. Instead, it is anticipated that those who
develop and set national governance codes for the public sector will refer to
the International Framework in updating and reviewing their own codes. Where
codes and guidance do not exist, the International Framework will provide both
a shared understanding of what constitutes good governance in the public sector
and a powerful stimulus for positive action (International Federation of
Accountants [IFAC], 2013)
Recently the terms
"governance" and "good governance" are being increasingly
used in development literature. Bad governance is being increasingly regarded
as one of the root causes of all evil within our societies. Major donors and
international financial institutions are increasingly basing their aid and
loans on the condition that reforms that ensure "good governance" are
undertaken (Sheng, 2014).
From the above discussion that, we can
figure out that, it becomes apparently important that the issue of the good
governance in Nepal needs a systematic observations. Thus present researcher
made an idea to work on a seminar paper entitled good governance in Nepal,
issues and challenges.
1.2. Objectives of the Study
The main objective of the study is to—
- explore the governance practice in Nepal.
- observe the overall level of good governance in Nepal
- know the issues of good governance in Nepal
1.3. Statement of Problem
The above statement assessments makes it
clear that the researcher was more concerned to assess the general status of
governance practice in Nepal. More specifically present researcher was concern
to establish a scientific observation on transparency, accountability,
participatory, consensus oriented, responsiveness, effective and efficient,
equitable and inclusive practices in Nepal.
1.4. Research Questions
Taking into the consideration the
background of the study, objective and statement of problem, present researcher
has composed a set of pre-research questions (RQs) which are as follows.
RQ1: What is the
general status of good governance in Nepal?
RQ2: What are the
key issues and challenges facing good governance in Nepal?
1.5. Significance of the Study
The present study may serve instrumental
to teaching learning communities, which provides adequate knowledge and
information about good governance and how could it be managed, related concepts and theories
regarding it, challenge and the implementation of such concepts, thoughts and
theories in a more realistic way.
Similarly,
such a study report would have value for various organizations, who want to
manage public sector by understanding the key concepts of good governance and
challenges of it, especially in the present context of Nepal. More
particularly, the inputs of this research would be useful for the support
of organization in assisting the transparency
by establishing mechanisms to create more efficient governance.
Finally,
the future generation researchers and learners of transparency in public sector
organization may find this study report as a source of additional learning as
well as a guiding framework for such studies of future endeavors.
1.6. Scope
of Work
This
research has been confined to the study taking in to the reference of various
conceptual and theoretical practices, policies as well as online resources
governing on good governance in Nepal. The present research has assessed the
overall practice of good governance by considering the eight pillars or
elements which are participatory, consensus oriented, accountable, transparent,
responsive, effective and efficient, equitable and inclusive and follows the
rule of law.
1.7. Methodologies
of Study
The
primary purpose of developing this section is to establish methodological
perspective to govern the whole research. This section intends to highlight
various techniques and tools that researcher used to collect and interpret the
data.
Present
study was based on the qualitative approach of study, where literature review
was considered dominant by desk review, observations and discussions with
experts. The literature reviews was observed and analyzed through reports,
articles, journals, and books.
In the
present research, the researcher has applied an exploratory approach to meet
the objectives of the present research through qualitative methodology by
conducting a situational analysis via interactions and interpretations.
Secondary
data refer to information gathered from sources that already exist. In this
study, the present researchers have used the secondary information like,
journals, books, articles and magazines, various published and unpublished
documents.
The
present researchers initiated the detailed study with intensive work on
reviewing the literature of the study which took total of the 1 months. The
work was performed by one member.
Review
and analysis of this study was guided by predetermined objectives and research
questions.
To make
the overall research sound from socio-ethical perspective, the present
researcher complied with various activities. All works or literature reviewed
will be
Good
governance in Nepal, appropriately cited and listed in the list of references
using American Psychological Association (APA) style guidelines. Also, the
present researcher commits that this study will be used for purely academic
purpose and it will not be used for any professional purposes.
CHAPTER 2
LITERATURE
REVIEW
2.1. Introduction
The primary purpose of conducting review of
literature review was to get acquainted with required theoretical and
conceptual knowledge of the field of interest of the present study.
2.2. Review
of Conceptual Perspectives
As the main part
of the review of literature, this section provides with closer study of various
theoretical and conceptual aspects related to the good governance in Nepal. For
this purpose, researcher found that the work of scholars as pertinent sources
of depth learning of the related theoretical and conceptual constructs
governing present study.
Good governance
is a process of executing a coherent governing plan for the nation based on the
interests and priorities of people. It purports to create a just society based
on the principles of human essence, such as inclusiveness, liberty, equality
and cooperation. For the realization of the vision of good governance, national
leadership has a threefold task of diagnosing the national situation, drafting
a legitimate course of action intended to resolve or ease the pressing
structural problems and mobilizing popular support in the pursuit of national
objectives (Dahal, 2010).
Those in office, especially the elected
ones, must represent the concerns, values and needs of the people and empower
them through the realization of their basic rights, including the right to
development and self-determination, by developing for them a proper access to
markets, assets, goods and services and institutions. In the post-modern
society, citizens' ability to satisfy their universal human needs and
articulate to those in power lies in a transparent communication process. This
process needs to provide them proper access to the institutions of governance,
the media and expert policy dialogues that affect their lives. This is the way
sovereign citizens can make the governing power accountable. Good governance
equally needs self-discipline and integrity of those in power, the corporate
sector and civil society.
Good governance thrives
on a rediscovery of common grounds on which the elite -political leaders,
bureaucracy, business persons and ordinary citizens agree on the core public
issues and shape their course of action. In a polyglot population, the
architecture of good governance rests on the sound legitimacy of governors
which is possible only in a climate where there is broad representation of
social interests and where a heritage of pride in social pluralism combines
with an honor for culture, family, education and statecraft A greater degree of
fairness during election and a broad-based representation of diverse sections
of people establish the legitimacy of leaders to be able to provide a kind of
order in the system. Yet, a system can only become stable if the society
becomes wealthy enough to overcome the tumult arising out of various political
convictions. Modernization also requires a reform in the entrenched work ethics
that deprecates manual labor. Such ethics comes from a feudal tenure system
that fosters share tenancy and exploits the peasants and workers thus
preventing the transformation of a largely agrarian society into a prosperous
one (Dahal, 2010).
2.2.1. Importance of Corporate Governance
For emerging market countries, improving
corporate governance can serve a number of important public policy objectives.
Good corporate governance reduces emerging market vulnerability to financial
crises, reinforces property rights, reduces transaction costs and the cost of
capital, and leads to capital market development. Weak corporate governance
frameworks reduce investor confidence, and can discourage outside investment.
Also, as pension funds continue to invest more in equity markets, good
corporate governance is crucial for preserving retirement savings. Over the
past several years, the importance of corporate governance has been highlighted
by an increasing body of academic research. Studies have shown that good
corporate governance practices have led to significant increases in economic
value added (EVA) of firms, higher productivity, and lower risk of systemic financial
failures for countries (The World Bank, 2005).
2.2.2. Pillars of Good Governance
Good governance has 8 major
characteristics. It is participatory, consensus oriented, accountable,
transparent, responsive, effective and efficient, equitable and inclusive and
follows the rule of law. It assures that corruption is minimized, the views of
minorities are taken into account and that the voices of the most vulnerable in
society are heard in decision-making. It is also responsive to the present and
future needs of society.
Participation
Participation by both men and women is a
key cornerstone of good governance. Participation could be either direct or
through legitimate intermediate institutions or representatives. It is
important to point out that representative democracy does not necessarily mean
that the concerns of the most vulnerable in society would be taken into
consideration in decision making. Participation needs to be informed and
organized. This means freedom of association and expression on the one hand and
an organized civil society on the other hand.
Work procedures means the detailed steps
of work processes in which the transaction passes through from the beginning to
the end that are followed in the implementation of certain process will lead to
avoid confusion in the operations by identifying the detailed steps. Processes
contribute in reducing the mental and nervous efforts of personnel a sit avoid
thinking what must be done each time (Mohammad et al., 2015).
Rule
of law
Good governance requires fair legal
frameworks that are formulated and enforced impartially. It also requires full
protection of human rights, particularly those of minorities. Impartial
enforcement of laws requires an independent judiciary and an impartial and
incorruptible police force as well as the administration of the country.
Transparency
Transperency
International Nepal, (2015) has said that transparency and openness in
government decisions became more common in just the past few years.
International trends in public management have pushed transparency to the fore
as an operational necessity while the increased adoption of democratic systems
of government created a political environment of greater openness and
participation.
Further, Good
governance dictates that government operations and decisions should be made
openly, and with the active participation of those people influenced by
them. The budget is the primary economic
policy document of governments; for this reason transparency and participation
in the budget is particularly important (Folscher, Krafchik, & Shapi,
1999).
Transparency is that decisions taken and
their enforcement are done in a manner that follows rules and regulations. It
also means that information is freely available and directly accessible to those
who will be affected by such decisions and their enforcement. It also means
that enough information is provided and that it is provided in easily
understandable forms and media.
Responsiveness
Good governance requires that
institutions and processes try to serve all stakeholders within a reasonable
timeframe. Responsiveness is most essential things for good governance in
Nepal. Good governance also means being responsiveness to the needs and
expectations of the people. It is the duty of the responsible officials to
serve and deliver services to the people within a reasonable time frame. Here
in Nepal, is one of the main obstacles of good governance in Nepal (Shrestha, 2014).
Consensus
oriented
There are several actors and as many
view points in a given society. Good governance requires mediation of the
different interests in society to reach a broad consensus in society on what is
in the best interest of the whole community and how this can be achieved. It
also requires a broad and long-term perspective on what is needed for
sustainable human development and how to achieve the goals of such development.
This can only result from an understanding of the historical, cultural and
social contexts of a given society or community.
Equity
and inclusiveness
A society’s well-being depends on
ensuring that all its members feel that they have a stake in it and do not feel
excluded from the mainstream of society. This requires all groups, but
particularly the most vulnerable, have opportunities to improve or maintain
their well-being.
In Nepal there is the policy of social
inclusion and equity for the activities performed under Nepal Government and
clearly mentioned that one has right for inclusion in the activities. The
program to be launched should include all group from the society.
Effectiveness
and efficiency
Good governance means that processes and
institutions produce results that meet the needs of society while making the
best use of resources at their disposal. The concept of efficiency in the
context of good governance also covers the sustainable use of natural resources
and the protection of the environment.
Accountability
Accountability is a key requirement of
good governance. Not only governmental institutions but also the private sector
and civil society organizations must be accountable to the public and to their
institutional stakeholders. Who is accountable to whom varies depending on
whether decisions or actions taken are internal or external to an organization
or institution. In general an organization or an institution is accountable to
those who will be affected by its decisions or actions. Accountability cannot
be enforced without transparency and the rule of law.
Accountability means commitment or
obligations of the individual to perform specified duties. This should be
linked to the responsibility of implementation the works with the standards
established. The concepts of accountability also states that employee is
responsible for his activities and to provide explanations or answer to the
result of construction, and that there an administrative or supervisory party
who can make enquiry to him. The relationship between the two parties should be
based on the determination of clear objectives agreed upon, with the existence
of standards govern accountability, which are used to measure the performance
of the individual in the position of accountability (Lindberg, 2009)
2.3. Conceptual Framework of the Study
On the basis of overall conceptual and
pragmatic knowledge gained through the overall preliminary observation of the
situation, backed up by relevant review of literature from various perspectives
the comprehensive framework, the present researcher developed a conceptual
framework of study so as to perform the ongoing research in a more theoretically
grounded manner. Figure 2.1 presents with the details elements of conceptual
framework governing the present study.
Figure 2.1: Conceptual Framework of the
Study
As presented in figure
2.1 above, the present research has been designed a pillar of good governance
in Nepal. This governance dimensions are viewed as eight pillar of the good
governance in Nepal. The good governance
model is as similar to the model described by the World Bank. This framework
shows the variables that directly measures the goodness of governance in the
activities of public as well as the overall sector in Nepal.
CHAPTER 3
FINDINGS
& CONCLUSIONS
3.1. Major Findings
It is difficult to achieve good
governance in totality in a country like Nepal. There are many seen and unseen,
some deeply rooted challenges to Nepal. The following are the challenges of
good governance:
Corruption
The greater governance challenge facing
Nepal is corruption, Corruption has, among others been defined as an act of
requesting, offering, giving or accepting directly or indirectly a bribe or any
other undue advantage or the prospect thereof, which distorts the proper
performance of any duty or behavior required of the recipient of the bribe, the
undue advantage of the prospect thereof (Kofele-Kale 2006).
Similarly, Electoral corruption is
prevalent. This is a situation that includes the purchase of votes with money,
promises of office or special favors, coercion, intimidation, and interference
with freedom of election, sale of votes, fighting and maiming of people in the
name of election, and a situation where losers end up as the winners in
elections, and votes turn up in areas where votes were not cast. This kind of
activities also getting popular in the public enterprises no people can work
official paper work without any bribe in Nepal.
Inefficiency
of Bureaucracy
Bureaucracy is inevitable in any society
or state, an inseparable part of an organized society. But the bureaucracy of
Nepal is not efficient in management and administration. The capacity of policy
implementation of our bureaucracy is very poor. Bureaucrats are not accountable
and transparent to the people. Lack of bureaucratic accountability can be
attributed inter-alia to bureaucratic corruption. But there is no effective
mechanism to make them accountable and transparent.
Political
interference in administration
In our country administration is always
to work and the influence of party in power. So, here nepotism is widespread
and administration is always unfair. The administration cannot take any free
and fair decision. Sometimes, political influence breech factionalism in the
administration which in turn results in demoralization, utter negligence of
work and often serious tension among the bureaucrats. Ministers, especially
those with greater political strength and influence and initiative, tended to
stress their overall supervisory role to dominate and direct those in
administration who versed under them, from secretaries downwards. In such
situations the ministers virtually inclined to act as executive heads of their
ministries, though they did not have to take the responsibilities either of the
executive head or the principal accounting officer responsibilities which still
technically and substantially remained with the secretaries.
Nepotism
Nepotism is another curse of our
politics and administration. The rules in our country pursue nepotism. They
give privilege and under advantage to their family members, kiths and kins on
public resources. So the mass people remain after regime. Nepotism or
favoritism in Nepal is widespread, whether it is public organization, private
organization, social initiative, programs etc.
Improper
and non-observance of the rule of law
In true and real sense the application
of rule of law in Nepal follows a course of selective and discretionary
application. It is said that laws are there but there are applied only in favor
of privilege people or class. As a result justices suffer and denied to the
common people. And this environment affects out right the basic rights of the
poor and the social place elides although that is an important aspect of good
governance.
Improper
use of resources
The fund flow in Nepal is not smooth the
local government, especially the capital expenditure is only 28% expenses take
place in the end of the one fiscal year but recurrent expenditure is nearly
100% was expenditure in this fiscal year. Beside, this fund is not utilized
properly and very often diverted to other purposes. So, the ordinary people
cannot get efforts, if any, of ensuring good governance.
Lack
of public pressure
Public people cannot raise the voice for
the justice, there is the lack of public pressure in Nepal. Sometimes strike
take place from the side of public but that couldn’t find the right solution
for the issue, it automatically ended up by negotiation in monetary term or
somethings like that. Genuine public sometime pressurize but it doesn’t long
lasting, the political leader will dominate all the raised issues.
3.2. Conclusions
On the basis of
overall study and key findings, the present researcher concluded that --
To
fight against the above challenges and to bring about good governance in Nepal,
governmental, private sector, and every individual should work together. There
have to mass awareness and educational programs launched. A structural reform
has to be effected, our official and legal working procedures should be
appropriately improved. Civil society and private sector should play more
active role. Judiciary and law enforcing agencies should be appropriately
empowered, trained and equipped. All of Nepali mindset need to be changed as
per time. We all Nepalese should transform the administration from process
oriented into action and service oriented.
REFERENCES
Dahal, D. R. (2010). Vison of Good Governance. Retrieved from Nepal
Democracy.
Folscher, A.,
Krafchik, W., & Shapi, I. (1999). Fiscal transparency and participation
in the budget process. South Africa: Idasa: Budget Information Service.
Availbale at:
http://www.internationalbudget.org/wpcontent/uploads/Transparency-and-Participation-in-the-South-Africa-BudgetProcess.pdf.
Retrived on: September 26, 2016.
International Federation of Accountants
[IFAC]. (2013). Good governance in the public sector- consultation draft for
an international framework. Available on:
http://www.ifac.org/system/files/publications/files/Good-Governance-in-thePublic-Sector.pdf.
Retrieved on: September 24, 2016.
Mohammad A.,
Mohamohd, A., & Qader, A. (2015). Identifying the impact of
administrative transparency. Advance in Management and Applied Economics,
Scienpress Ltd. Available at:
http://www.scienpress.com/Upload/AMAE/Vol%205_2_7.pdf. Retrieved on: September
25, 2016.
Sheng, Y. K. (2014). What is Good Governance? Bangkok, Thailand:
Poverty Reduction Section UNESCAP.
Shrestha, R. (2014). Good Governance. Imnepal. Available at:
http://www.imnepal.com/good-governance-nepal-needs-challenges-problems/.
Retrived on: September 25, 2016.
The World Bank. (2005). Report on the Observance of Standards and Codes
(ROSC). The World Bank.
Transperency International Nepal. (2015). Building National Integrity
In Nepal. Transparency International Nepal.
No comments:
Post a Comment