Business Ethics and Sustainability: Corruption Analysis in Nepal

This report examines the pervasive issue of corruption in Nepal, identifying bribery, 'Afno Manche' (favoritism), and 'Chakari' (appeasement) as key forms. It details the strategies implemented by the Nepalese government, including the establishment of the Commission for the Investigation of Abuse ...Read More

Running head: BUSINESS ETHICS AND SUSTAINABILITY
BUSINESS ETHICS AND SUSTAINABILITY
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Executive Summary
The aim of the study is to understand the concept of corruption, mainly determine
corruption in Nepal. Nepal is said to be one of the most corrupt countries with the level of
corruption slowly rising in their level of corruption. The different forms of corruption prevalent
in Nepal are discussed in this study along with the strategies that the government implements to
reduce the level of corruption in the country. The different constitutional bodies and the laws
used to reduce and control corruption is mentioned in this study. Along with the strategies of the
government, certain recommendations are also provided in the study which will help to
concretely reduce the corruption level.

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Table of Contents
1. Introduction..................................................................................................................................3
2. Discussion....................................................................................................................................3
2.1 Forms of corruption...............................................................................................................3
2.2 Strategies implemented by the government to reduce corruption.........................................5
3. Recommendation.........................................................................................................................6
4. Conclusion...................................................................................................................................7
5. References....................................................................................................................................8

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1. Introduction
Corruption is defined as a single activity which is done against the law or to normal way
of living by any individual or a group. The activity can harm another person or the individual as
well depending on the form or the intensity of the activity (Rose-Ackerman and Palifka, 2016).
Corruption have been one of the prevalent topics in politics in Nepal for the past years. This is
determined as one of the major causes of underdevelopment in the country. Corruption has taken
over many levels of the society in Nepal and is also practised in different forms all over the
country. This has proved to be great challenge for the government and the population of Nepal
and several steps have been taken by the government to try and eradicate this problem (Neupane,
Soar and Vaidya, 2014). This report will discuss about the different forms of corruption that are
present in Nepal followed by the several strategies that have been implemented by the
government of Nepal to reduce corruption in the country.
2. Discussion
2.1 Forms of corruption
Corruption has different forms, however, there are three main types of corruption that is
prevalent in Nepal. Firstly, bribery is one of the most common types of corruption which is
practised all over the world. Bribery means to receive or give money in exchange for a favour to
the other party (Lee and Guven, 2013). The bribe can be in both cash and kind and can be done
for different favours to the giver. There are several instances of bribery such as misappropriation,
nepotism, favouritism or patronage. For all of the above instances undue favour is given to the
giver. In Nepal, bribes are often paid by businessmen to the officials of the government in
exchange for any illegal act or stance that they want to carry out in their operations (Gilbert and
Sharman, 2016). Hence, instead of waiting for a rejection or a ling time which could make them

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incur losses, they pay bribes to the government so that the legal activity is made legal (Malgwi,
2016). This has made various negative impacts on the business environment of the country and
also on the product and service qualities. There have also been increase in the costs of products
and the economic condition of the country since the government is not receiving their stipulated
revenue from businesses. Even though every country in the world have the issue of bribery,
Nepal is said to be one of the most corrupted countries in the bribery scenario.
Secondly, Afno Manche is a term that is used in Nepal to describe the people who are
relatives or in the inner circle of an individual. These people can be family members, friends and
any other associates who can be approached in case of any need (Subedi, 2014). In such cases
other kinds of attributes such as work discipline, qualification, character integrity, training
background and others are not deemed as important as compared to a sense of belonging of
familiarity. This kind of corruption occurs in any organisational role where a person is favoured
not on the basis of their skills and quality but on the basis of their nearness or relationship to an
individual in power. This also a form of nepotism or favouritism which is a very common form
of corruption in current times. Many of the activities are associated with Afno Manche such as
getting selected to a school, recruitment in an organisation, getting promoted and others. These
kinds of activities occur faster when the person is a close associate of the person in power
(Gaurab and Kharel, 2017). This creates a very biased situation in the society for every person
since people who possess the necessary skills would not get appointed for a job if they are not
favoured or are not close to the person who is recruiting or the head of the organisation. Due to
this many people do not get the right opportunity that they deserve.
Lastly, chakari is a concept which means that people who are in administratively and
politically influenced are appeased, served or sought by the other people. The individuals

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normally seek favour from these influential characters since they are better off than the other in
terms of money and position in the society. This kind of corruption existed in Neal where the
common population has to establish their loyalty to the influential group of people so that they
are able to get something in return in their time of need (Ghimire and Ashraf, 2016). Government
employees have to also perform chakari to ensure that their security of job is maintained and also
that they would be eligible for any promotion that occurs in the organisation. Chakari is a very
important part of the social life of the people in Nepal (Shrestha, 2015). It is found in all the
levels of the government and the government organisations where continuous favours are being
given and taken from individuals. Chakari also involves the exchange of gifts, favours and even
services. These three forms of corruption is highly practiced in Nepal in current times and has
been in power since years which the government have not been able to eradicate due to their
involvement in the corruption process (Hoseah, 2014).
2.2 Strategies implemented by the government to reduce corruption
The government of Nepal has to take different steps to ensure that the corruption is
reduced in the country. Reduction of corruption is important for the equality and the safety of the
people of Nepal. Different policies have been adopted by the government of Nepal to battle
against corruption and to ensure peace and equality in the country. Firstly, the government has
established a constitutional body known as the Commission for the Investigation of Abuse of
Authority (CIAA) which is used to eradicate corruption (Jamil, Askvik and Baniamin, 2016).
The CIAA have been given the responsibility and the power to investigate cases against those
individuals who are appointed in any public office and are caught abusing their position or their
power with the use of corrupt methods. The CIAA constitutes of a Chief Commissioner and
several other commissioners and they are appointed by the Constitutional Council. Secondly,

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another constitutional body is appointed known as the Office of the Auditor General (OAG)
which helps to provide a trustworthy and independent audit about the ways that the public
resources could be managed and used effectively. They help to create a transparency among the
individuals in the public sector by enhancing good governance among them. The body examined
the expenditure and the revenue collection and if it is in compliance with the rules and the
regulations of the country.
There are also several legal acts which ensure the eradication or at least the reduction of
corruption in the country. The Prevention of Corruption Act, 2059 (2002 A.D) was formulated
to lead the CIAA efficiently in their actions to reduce corruption. This act was brought about in
action to ensure peace within the country and to make sure that efficient and ethical practices
prevailed within the country and was adopted by each one of the citizens of the country (Dimant
and Schulte, 2016).
3. Recommendation
The government has issued several laws to reduce corruption, however, there are certain
other recommendations which would help to eradicate it or control it to a great extent. Firstly, the
citizens of the country should revise their attitude and views about corruption. Corruption can be
controlled to a great deal if the citizens take an active part in reducing it. The common people
are3 the ones who contribute to corruption with the help of bribes or other forms to do their tasks
faster or to receive privilege over some position. This needs to be stopped and the people should
realise that equal opportunity is the right of every citizen and every action or position should be
allocated to the deserving person. Secondly, there are various laws which have been formulated
to stop corruption but they should be implemented strongly and for every person irrespective of
their position or power in the society. The constitutional body of CIAA should be given more

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power so that they are freely able to carry out their actions for the good of the society. Lastly,
there should be transparency of process for the individuals which would help to reduce the
corruption. If the people has to go to Government officials for their work then they would have
to pay undue amount to complete the task earlier. This could be stopped if the process was made
digital so that the individuals do not have to contact any official.
4. Conclusion
Hence, it can be deduced from the above study that corruption is a huge issue in the
country Nepal which have been prevalent for a long time and the government has not been able
to stop it. To fight corruption and control it, the proper definition of corruption has to be
understood by the people and also the involved laws and regulations that are formulated to fight
this issue. The laws should be implemented properly without any biasness towards anyone so
that every individual receives the same treatment and punishment if they take part in corrupt
practices.

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5. References
Dimant, E. and Schulte, T., 2016. The nature of corruption: An interdisciplinary
perspective. German LJ, 17, p.53.
Gaurab, K.C. and Kharel, P., 2017. The Dynamics of Representing Nepal’s Struggle for
Modernization: from Nepalization to Fatalism. Dhaulagiri Journal of Sociology and
Anthropology, 11, pp.130-150.
Ghimire, B. and Ashraf, M., 2016. Beleaguered Administration: A Study Of Administrative
Reforms In Nepal. International Journal Of Development Research, 6, pp.7966-7972.
Gilbert, J.A. and Sharman, J.C., 2016. Turning a blind eye to bribery: explaining failures to
comply with the international anti-corruption regime. Political Studies, 64(1), pp.74-89.
Hoseah, E.G., 2014. Corruption as a global hindrance to promoting ethics, integrity, and
sustainable development in Tanzania: the role of the anti-corruption agency. Journal of Global
Ethics, 10(3), pp.384-392.
Jamil, I., Askvik, S. and Baniamin, H.M., 2016. Citizens’ Trust in Anticorruption Agencies: A
Comparison Between Bangladesh and Nepal. International Journal of Public
Administration, 39(9), pp.676-685.
Lee, W.S. and Guven, C., 2013. Engaging in corruption: The influence of cultural values and
contagion effects at the microlevel. Journal of Economic Psychology, 39, pp.287-300.
Malgwi, C.A., 2016. Corollaries of corruption and bribery on international business. Journal of
Financial Crime, 23(4), pp.948-964.

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Neupane, A., Soar, J. and Vaidya, K., 2014. An empirical evaluation of the potential of public e-
procurement to reduce corruption. Australasian Journal of Information Systems, 18(2).
Rose-Ackerman, S. and Palifka, B.J., 2016. Corruption and government: Causes, consequences,
and reform. Cambridge university press.
Shrestha, B.K., 2015. Business opportunity recognition and development process: A study of
Nepalese entrepreneurs. South Asian Journal of Management, 22(4), p.7.
Subedi, M., 2014. Afno Manchhe: Unequal Access to Public Resources and Institutions in
Nepal. Dhaulagiri Journal of Sociology and Anthropology, 8, pp.55-86.