Intergovernmental Relationship: Policy Process and Harmonization Trilochan Pokharel trilochan.pokharel@nasc.org.np

Discussion points Bases for public policy Policy environment in Nepal Where are the gaps Policy making in federal set-up Policy harmonization ©NASC, 2018

Constitution of Nepal largely endorses all these bases. Bases of public policy Equity Efficiency Welfare Liberty Security Constitution of Nepal largely endorses all these bases. ©NASC, 2018

Where does policy idea come from? public interest, public choices/concerns/ affairs public sphere/contestation common goods (distributive justice) vs. private goods (market mechanism) national interest global environment ©NASC, 2018

Constitution provides over- arching bases for the public policy State’s commitment… Constitution provides over- arching bases for the public policy ©NASC, 2018

Preamble… Means and ends: … to fulfill the aspirations for perpetual peace, good governance, development and prosperity through the medium of federal democratic republican system of governance… ©NASC, 2018

Policy Institutions in Nepal Political institutions Market and other non-government actors Global institutions Executive and Bureaucracy, other public entities Policy as interaction ©NASC, 2018

Changing policy platform Where do these institutions operate? Is there collusion/ conflict of interests? Political institutions Market and other non-government actors Global institutions Executive and Bureaucracy, other public entities Policy as interaction How do these institutions interact? Do they provide space for public constestation? ©NASC, 2018

Issue of representation Where do these institutions operate? Is there collusion/ conflict of interests? Political institutions Market and other non-government actors Global institutions Executive and Bureaucracy, other public entities Policy as interaction Do they provide space for public constestation? How do these institutions interact? ©NASC, 2018

Policy environment in Nepal Political Institution/Actors Interest in policy formulation: populist Interference – expand span of influence Transactional attitude Confidence: disappearance Competence of policy making Interest in resource mobilization ©NASC, 2018

Policy… Interest in policy formulation but less in execution- paradox Bureaucracy Interest in policy formulation but less in execution- paradox Rent seeking tendency Adhocism Performance evaluation-accountability Absence of holistic approach ©NASC, 2018

Policy… Self interest See opportunity in weak state Non-government Actors Self interest See opportunity in weak state Influence on policy making but unwilling to policy compliance Question on fair advice- guided by interest ©NASC, 2018

Policy making in Nepal Follow structure – adherence to template Democratic – open to public interest Wide-spread policy coverage Policy making competence Use of evidence ©NASC, 2018

Issues in Policy making in Nepal Autocratic vs democratic Protection of ruler’s interest vs representation of public interest Policy manipulation – language of policy, use of evidence ©NASC, 2018

Issues in Policy making in Nepal Origin of policy- whose problem Political and administrative accountability Right problem or right frame Issue of publicness- public contestation Consultation ©NASC, 2018

H1: Decentralization hypothesis H2: Federalism hypothesis Two Hypotheses H1: Decentralization hypothesis H2: Federalism hypothesis Biela, J., Kaiser, A. & Hennl, A. 2013. Policy Making in Multilevel Systems: Federalism, Decentralisation, and Performance in the OECD Countries. ECPR Press. ©NASC, 2018

H1: Decentralization hypothesis H1a (Decentralization hypothesis): Decentralization is a more efficient mode of governance than centralization, and therefore leads to better policy performance. H1b (HBC hypothesis): The effects of decentralization are subject to the hardness of budget constraints in a political system. For a given level of decentralization, harder budget constraints are associated with superior policy performance. ©NASC, 2018

H1: Decentralization… H1c: The effects of decentralization interact with the type of federalism. In federal countries with low subnational fiscal autonomy, i. e. joint federalism type, decentralization is likely to have negative impact on performance. In comparison, both unitary countries and federal countries with high sub-national fiscal autonomy are expected to perform better. ©NASC, 2018

H2: Federalism hypothesis H2: In an environment of changing socio-economic conditions, federalism tends to result in lower policy performance. ©NASC, 2018

Policy process in multilevel government Federalism Decentralization H1c H1b H1a HBC H2 OUTPUT INPUT POLICY FORMULATION POLITICAL DECISION MAKING IMPLEMENTATION Political System Biela, J., Kaiser, A. & Hennl, A. 2013. Policy Making in Multilevel Systems: Federalism, Decentralization, and Performance in the OECD Countries. ECPR Press. ©NASC, 2018

Policy Making in Federal Setup Two factors - constitutional provisions and financial allocation- dominate policy process in federal countries ©NASC, 2018

Policy Making in Federal Setup Old federal countries – policy making function as federal functions and to some extent provincial (America, Canada, Australia, Germany) New federal countries – divided in all orders of government (Brazil, South Africa, Nepal) ©NASC, 2018

Policy Making in Federal Setup India- Union and State have list of powers with autonomy in policy making, but State executive orders should not repugnant with the Union government Financial autonomy to States including liberty to borrow without any limits and consent with Union government protects rights of States for acting on public affairs Indian system is restrictive towards recognizing the competence of local governments on policymaking. ©NASC, 2018

Where are the critical gaps? ©NASC, 2018

Gap 1: Understanding and framing problem Prescriptive vs diagnostic ©NASC, 2018

Gap 1: Understanding and framing problem At least one should work for you! I will tell you later what your problem is? ©NASC, 2018

Gap 2: Distinguishing context vs problem Is political instability context or problem? Is lack of human resources context or problem? When asked ‘What is the key policy problem”. Got response ‘The problem is lack of policy.’ ©NASC, 2018

How do these tools solve the public problem? Gap 3. Selecting tools What tools should bring solution to this problem? Bases of selection Does these tools help public or protect the government? Appropriate mix of tools How do these tools solve the public problem? Persuasive Financial Legal ©NASC, 2018

Gap 4: Implementation Plan Often policies fail because they do not propose clear implementation plan that outline finance and human resource Does the policy clearly mention implementation plan? Is there projection of financial requirement? What are bases? Source of financing Does it indicate human resource requirement? Competence? ©NASC, 2018

Gap 5: Communication Do we spend time to communicate policy to the citizens? How does policy reach to citizens? Does policy have communication plan? We, generally, do not propose communication plan in policy. Thus creating space for distorted information. ©NASC, 2018

Gap 6: Monitoring and Evaluation Are indicators appropriately defined? How are policy monitoring and evaluation framework established? At which level policies are evaluated? Do we establish feedforward mechanism? Policy evaluation is largely lacking in Nepal. ©NASC, 2018

Policymaking in Federal Nepal Federal Government Schedule 5 Provincial Government Schedule 6 Schedule 7 (F&P) Schedule 9 (F,P&L) Local Government Schedule 8 ©NASC, 2018

Policymaking: Accountability Federal Government Schedule 5 Provincial Government Schedule 6 Accountability justice finance performance Schedule 7 (F&P) Schedule 9 (F,P&L) Local Government Schedule 8 ©NASC, 2018

Policymaking: Critical factors Inter-governmental relationship – vertical & horizontal Resource management Accountability mechanisms Functional devolution Technology leverage Federal Government Schedule 5 Provincial Government Schedule 6 Ensuring fundamental rights Resource mobilization Regulatory functions Policy harmonization, communication, including international convention Accountability justice finance performance Schedule 7 (F&P) Schedule 9 (F,P&L) Functional and financial autonomy Accountability mechanisms Public space Local Government Schedule 8 ©NASC, 2018

Policy Harmonization- Some Ways Practical intervention Developing policy framework including accountability framework Map policy competency at all levels of government Developing policy competency of elected executives and bureaucrats ©NASC, 2018

Moving forward- common point Strategic intervention Use of evidence in policy making – commissioning evidence to creating meaning Creating space for public contestation – local government can be appropriate place Institutionalize policy evaluation- ensuring accountability framework Strengthen policy analysis practices and institutions ©NASC, 2018

Take this opportunity to use: Finally, Take this opportunity to use: ‘smart policy’ approach, using data, evidence, piloting, experimentation, to iteratively feedback into the design and implementation of programmes ©NASC, 2018

Thank you for attention ©NASC, 2018