Corruption in Nepal: An Analytical Study

Abstract

Nepal is the 122 least corrupt nations out of 175 countries throughout the world according to the 2017 ‘Corruption Perceptions Index (CPI)’ reported by Transparency International. Corruption Rank in Nepal averaged 127.64 from 2004 until 2017 A.D., reaching an all time high of 154 in 2011 and a record low of 90 in 2004. Various cases of VAT fraud, massive irregularities in the distribution of relief materials of earthquake victims and the government’s failure to control the artificial increase of fuel and basic goods, prices after Madhesh agitation and crisis in Nepal-India trade relation has evidenced that corruption in Nepal has becoming systemic. However, no study is undertaken to estimate the magnitude of corruption. Therefore, along with the promulgation of the Federal Democratic Republic Constitution of Nepal 2015 AD, time has come to conduct a nationwide survey to estimate the magnitude of corruption in Nepalese economy and identify the measures to control it. This study has analyzed the historical trends of corruption and economic growth as well as conceptual and theoretical issues of corruption. Moreover this study tries to analyze the trend, extend and explore the determinants of corruption in Nepal. The causes of corruption are bad system of governance, bad incentives and weak civil society. The major determinants of corruption are economic growth, trade liberalization, inflation and Human Development index.