Nepal and the Breakdown of its Social Contract

The journey of Nepal over the last two decades has been a saga of both extraordinary political remodelling and of deep disenchantment. When the 2006 people’s movement ousted the monarchy and instated a democratic republic, it was seen as a historic rebirth. The promise of this new order lay in a rewritten social contract: the state would be accountable to its citizens, political inclusion would extend to marginalised groups, and democracy would bring prosperity, stability, and justice. Yet, nearly two decades later, Nepal finds itself trapped in a cycle of corruption, weak governance, and growing youth disillusionment. The failure of Nepal’s social contract is not merely a domestic tragedy but also a reflection of the broader malaise afflicting democracies worldwide. However, Nepal’s case is unique in that its democratic institutions remain fragile and underdeveloped, leaving the country more vulnerable to elite capture and disillusionment than older democracies.

Nepal and the 2006 Movement

Now, let’s understand the promise of the 2006 movement and the making of a social contract. The second People’s Movement (Jana Andolan II) of April 2006, fuelled by a broad coalition of political parties and civil society groups, forced King Gyanendra to relinquish power and restore parliamentary democracy. Soon after, the monarchy was abolished, and the Constituent Assembly was tasked with drafting a new constitution. This was not merely a legal document but the symbolic foundation of a new social contract. The social contract, in theory, rested on three pillars. First, it promised inclusivity: historically marginalised groups such as Madhesis, Janajatis, Dalits, and women would have representation and rights. Second, it promised accountability: citizens would hold elected leaders responsible through transparent institutions. Third, it promised prosperity: democracy would deliver economic growth and opportunities, particularly for the youth. The 2015 Constitution attempted to institutionalise these promises, defining Nepal as a federal democratic republic with strong guarantees of fundamental rights. Yet the spirit of the social contract began to erode almost immediately.

Failures of Nepal’s Social Contract

One of the most visible failures of Nepal’s social contract is the entrenchment of corruption. Instead of being responsive to citizens, political elites have captured state resources for personal and party gain. Scandals involving misuse of funds, irregularities in public contracts, and nepotistic appointments have become routine. For example, the 2023 fake Bhutaneserefugee scam exposed how politicians and officials allegedly conspired to fraudulently send Nepali citizens abroad, exploiting desperate youth. Earlier, irregularities in large infrastructure projects such as hydropower and road construction showed how state resources are siphoned off by rent-seeking elites. This corruption is not simply about individual misconduct but a structural problem. Political patronage networks dominate the bureaucracy, while ordinary citizens struggle to access basic services without paying bribes or relying on political connections. Anti-corruption movements periodically rise, but as global experience shows, they often become weapons of political rivalry rather than systemic reform. Thus, the very rhetoric of anti-corruption risks legitimising authoritarian tendencies rather than deepening democracy.

Furthermore, economic disappointment lies at the heart of democratic disenchantment in Nepal. The country’s economy remains fragile, with limited industrial development and high dependence on foreign remittances. According to Nepal Rastra Bank, remittances account for over 26 per cent of Nepal’s GDP, one of the highest proportions globally. This dependence reflects the inability of the domestic economy to generate jobs. Every year, more and more Nepali youths enter the labour market, yet opportunities remain scarce. Migration to the Gulf countries, Malaysia, and other destinations has become the defining feature of Nepal’s youth experience. Instead of seeing democracy as a source of opportunity, young people increasingly view it as a broken promise. This sense of loss fuels cynicism. For many youths, democracy is no longer about participation or accountability but about survival and escape. The image of a young generation robbed of its future captures the essence of Nepal’s failed social contract.

Nepal’s democratic institutions remain weak and vulnerable to manipulation. Parliament has often been paralysed by factionalism and short-term bargaining, with frequent changes of government undermining stability. Since 2008, Nepal has seen over a dozen prime ministers, a sign of how fragile executive authority is. Federalism, introduced in the 2015 Constitution, was meant to devolve power and strengthen local governance. Yet poor fiscal management, overlapping authority, and lack of clarity between federal, provincial, and local units have produced confusion rather than accountability. As a result, the very institutions meant to embody the social contract like the parliament and local governments, have instead deepened divisions and amplified public frustration.

Erosion of Social Contract

A social contract is ultimately built on trust: citizens agree to surrender certain freedoms in exchange for stability, justice, and opportunity. In Nepal, the trust has steadily eroded. The political elite’s monopolisation of resources, combined with economic stagnation and institutional fragility, has led citizens to question whether the state truly serves them. The 2015 Constitution, instead of uniting the country, became a point of contention. Madhesi and Tharu groups protested exclusionary provisions, leading to violent clashes and blockades along the southern border. These events revealed how fragile the new contract was: instead of inclusivity, many communities felt further alienated. When citizens no longer see the state as responsive, they withdraw their trust, undermining the very basis of democratic legitimacy.

When one digs deeper, Nepali youth’s frustration also lies in the premise that there have been protests over and over again, yet there have been no signs of impactful transformation. Nepal has witnessed repeated cycles of protests, whether over corruption scandals, constitutional disputes, or demands for accountability. While these protests reflect vibrant civic energy, they rarely translate into durable institutional reform. The pattern has been one of protest followed by drift. The exhilaration of mobilisation soon dissipates into exhaustion when structural change fails to materialise. This cycle contributes to widespread disillusionment, reinforcing the perception that democracy is little more than a stage for elite bargaining.

However, there are lessons that have to be learnt from the past. Nepal’s democratic exhaustion is part of a larger global pattern. In the 1970s, the Trilateral Commission’s The Crisis of Democracy argued that democracies risk collapse not because of inequality but because of excessive demands on the state. Today, the diagnosis has shifted: inequality, corruption, and lack of opportunity are the main drivers of disillusionment. In Chile, for instance, the rapid collapse of optimism around Gabriel Boric’s government showed how fragile public trust can be when economic realities remain unaddressed. In France and the United States, polarisation reflects the same crisis of governability that Nepal faces in its own form. The global lesson is clear: when democratic promises fail to deliver economic security and inclusion, the social contract fractures.

Democracy at Crossroads

Nepal’s democracy is at a crossroads. The social contract of 2006 has failed, but its failure need not mean permanent collapse. Democracies, as history shows, have often reinvented themselves after moments of exhaustion. The challenge is whether Nepal can translate shared anxiety into durable institutional solutions. Three priorities stand out. First, structural anti-corruption reform is essential. This requires not only punishing individuals but dismantling patronage networks that capture state resources. Second, economic transformation must address youth disillusionment by creating jobs at home, investing in infrastructure, and diversifying beyond remittance dependency. Third, institutional strengthening is needed to restore trust: stable governments, empowered local units, and an independent judiciary are critical. If Nepal cannot rebuild its social contract on these foundations, it risks drifting further into cynicism, where democracy becomes an exercise in futility rather than hope. The failure of Nepal’s social contract is a sobering reminder that democracy is not sustained by elections alone. It requires accountability, opportunity, and trust. When corruption dominates, when young people see no future, and when institutions amplify rather than resolve divisions, the promise of democracy collapses into disillusionment.

The Writer is an Assistant Professor at the Department of Political Science, University of Bongaigaon

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