Multi-Level Governance: Meaning, Definition, and Nepali Context
Classification of Governance
Governance can be classified into two types:
1. Based on Scope:
- (a) Global Governance
- (b) National Governance
- (c) Regional Governance
- (d) Local Governance
- (e) Community Governance
2. Based on Methods:
- (a) Polycentric Governance
- (b) Multi-Level Governance
- (c) Electronic Governance
- (d) Meta Governance
Meaning of Multi-Level Governance
The concept of multi-level governance was introduced by political scientists Lisbet Hooghe and Gary Marks in the early 1990s. This concept posits that the governance process involves interactions among multiple entities and the exercise of national and international authority. It advocates that decision-making authority in governance should be distributed from the global to the local level.
Characteristics of Multi-Level Governance
- Governance operates across multiple levels, with relationships and cooperation at national, international, and regional levels for specific objectives.
- Different levels of government share responsibilities in policymaking and regulation.
- Decision-making involves the exchange of information, political power, and expertise.
- Sovereignty is shared among different levels of government within the same state.
- All levels of government have formal legitimacy, with their powers clearly defined by the constitution.
- Residual powers remain with the central authority.
1. Informal Governance
Informal governance refers to governance carried out by groups without formal responsibilities or direct accountability in the governance system. These entities do not directly participate in the governance process but influence it informally. Examples include the United Nations and its agencies, international non-governmental organizations (NGOs), and local NGOs. While these entities may have their own interests, they do not explicitly disclose them.
Contributions of Informal Governance:
- (a) Economic and social development
- (b) Political stability
- (c) Peacebuilding
- (d) Establishing international relations
- (e) Citizen awareness
- (f) Democratization
Negative Aspects of Informal Governance:
- (a) Potential for increased interference
- (b) Risk of weakening formal government
- (c) Increased dependency
- (d) Impact on decision-making capacity
- (e) Potential for increased conflict
2. Civil Society Governance
Civil society consists of non-complex, non-controlling, and non-profit groups that are independent, autonomous, and spontaneous. Civil society can be formal or informal, including professional groups, pressure groups, informal groups, and social organizations.
Civil society contributes to the governance process by providing suggestions, advice, and pressure to the government on issues concerning public interest, welfare, and concerns. It raises awareness about social issues, promotes civic education, mobilizes citizens for their rights, advocates against social ills, and plays a leading role in disaster and crisis management.
Strengths of Civil Society in Governance:
- (a) Focus and pressure on issues of national importance
- (b) Highlighting citizens' priorities
- (c) Active participation in development
- (d) Awareness and creativity
- (e) Vigilance
Weaknesses of Civil Society:
- (a) Lack of independence from political interference
- (b) Dependency on donor agencies
- (c) Institutional self-interest
- (d) Prejudices and biases
- (e) Lack of professionalism
- (f) Reliance on foreign aid
3. Local Governance
Local governance refers to governance conducted by local bodies and communities closest to the people. This system emphasizes the principle of self-governance. Local communities elect their representatives, fostering leadership development. Local governance ensures genuine representation, addresses local needs, enhances the effectiveness of local services, ensures equitable distribution of local benefits, increases community ownership in development, promotes sustainable development systems, and contributes to effective national development.
Elected local governments, community organizations (e.g., consumer groups, conservation groups, mothers’ groups, village improvement committees), and NGOs participate in the local governance process. Community development is the primary goal of local governance.
In Nepal, the importance of local governance has been recognized. Under the federal governance system, local governments have been granted formal authority. The establishment of rural and urban municipalities ensures autonomy for local development and service delivery. Local citizens elect their representatives, create their own laws, manage and utilize local resources, oversee community development, and mobilize local manpower for development activities. The Local Government Operation Act, 2017, has been formulated and is under implementation.
Challenges in Nepal’s Local Governance:
- Insufficient physical resources
- Lack of laws, procedures, and standards
- Duplication of work
- Shortage of skilled manpower
- Insufficient skills and managerial knowledge among elected representatives
- Uncertainty in the allocation of local resources
Solutions to Address These Challenges:
- (a) Institutional development of local levels
- (b) Clear legal provisions for exercising local authority
- (c) Enhancing the efficiency of local administration
- (d) Encouraging local citizen participation
- (e) Empowering community organizations
- (f) Resource management
- (g) Capacity building of elected representatives
- (h) Management of local(resources
4. Cooperative Governance
Cooperatives are autonomous entities established through the voluntary participation of individuals to promote mutual interests. The core principle of cooperatives is collaboration. While cooperatives do not pursue commercial interests, they distribute benefits among members based on collective efforts. Democratic socialism is the foundational principle of cooperatives.
Principles of Cooperatives:
- (a) Self-help
- (b) Equity
- (c) Self-responsibility
- (d) Equality
- (e) Democracy
- (f) Solidarity
Cooperative governance is based on collaboration and emphasizes shared and equitable distribution of benefits. Its defining feature is the equal responsibility and accountability of both those involved in the governance process and those affected by administrative processes. Cooperatives play a significant role in development and must be involved in the governance process.
Contributions of Cooperatives to Governance:
- (a) Supporting the implementation of government policies, plans, and programs
- (b) Assisting low-income communities with income generation
- (c) Social mobilization
- (d) Promoting professional values
- (e) Social entrepreneurship
- (f) Equitable distribution of benefits
- (g) Practicing inclusive democracy
- (h) Decentralizing economic and financial activities
- (i) Empowering rural areas
Advantages of Cooperative Governance:
- Engaging more citizens in cooperatives to develop citizen networks
- Facilitating capital collection and mobilization
- Encouraging local communities to become professional
- Contributing to the economic development of low-income individuals and communities
- Promoting social entrepreneurship
- Advancing democratic values and norms
Disadvantages of Cooperative Governance:
- Risk of financial misuse
- Inability to regulate cooperatives in line with their principles
- Commercial tendencies among cooperative operators and management
- Overemphasis on profit-oriented activities
- Vulnerability to political influence and pressure
- Failure to foster expected solidarity among citizens
5. Corporate Governance
Corporate governance refers to the collective system of rules, laws, and procedures established to operate business entities. These entities directly contribute to the state’s governance system and development.
Aspects of Corporate Governance:
- (a) Management
- (b) Investors (shareholders)
- (c) Customers
- (d) Policy aspects
With the growing recognition of multi-stakeholder involvement in governance systems, the role and importance of the private sector have increased. Liberal economic systems have further reinforced this concept. The primary principle of corporate governance is to enhance the participation of all stakeholders affected by the production, distribution, and consumption chain in the governance process. Developing professionalism in governance is its key objective.
Corporate governance prioritizes the needs, desires, and requirements of all stakeholders, directing and controlling the governance system with their participation while ensuring fairness, transparency, and accountability.
Essential Elements for Developing Professionalism:
- (a) Open and liberal economic system
- (b) Legal and policy frameworks for business operations
- (c) Suitable environment
- (d) Professional conduct
- (e) Collaboration and mutual relationships
Responsibilities of Corporate Governance:
- (a) Political Responsibility: Compliance with legal and systemic legitimacy
- (b) Social Responsibility: Acceptance of community values
- (c) Economic Responsibility: Equitable distribution of profits
Advantages of Corporate Governance:
- (a) Contribution to economic growth and development
- (b) Enhanced decision-making effectiveness
- (c) Adherence to ethical conduct
- (d) Attraction of investment
- (e) Improved strategic thinking
- (f) Cost reduction
- (g) Development of sustainable relationships
Limitations of Corporate Governance:
- (a) Focus on collective profit value (profit-centric)
- (b) Difficulty in ensuring all stakeholders are informed about all aspects of corporate governance
- (c) Challenges in establishing acceptable and reliable standards
- (d) Developing professional integrity
- (e) Building operational capacity
Actors in Global Governance
- (a) States
- (b) International organizations
- (c) Non-governmental organizations
- (d) Multinational corporations
- (e) Scientific communities
- (f) Civil society
Dr. Narayan Prasad Regmi, Joint Secretary, Government of Nepal
