Many studies have been conducted on the causes and consequences of Nepal’s conflict. Given the current peace, proposals on federal restructuring, mostly based on ethnic sub-divisions of the country, are rife. Federal restructuring of the country, it is believed, will be instrumental in power sharing and peace in the long run. It is also believed that federalism will promote inclusive development by granting political autonomy to states (regions) and assuring proportional and fair representation of all ethnic/sub-cultural groups in future governments and other decision-making organs of the state. However, it is not yet clear what kind of federalism this multi-ethnic country will have. Many analysts see federal restructuring of the country as an over-ambitious and challenging task for Nepal. There is also a fear that any hurried decision in this direction may further intensify the underlying conflict and ultimately cause the disintegration of the country. Furthermore, economic issues like revenue and expenditure sharing and resource mobilization are not fully spelled out by the proponents of federalism. This paper suggests an alternative basis for federal restructuring of the nation, which promotes longterm development and sustainable peace.

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ISS Staff Group 1: Economics of Sustainable Development
Journal of Law and Conflict Resolution
International Institute of Social Studies of Erasmus University (ISS)

Murshed, S., & Bhatt, S. R. (2009). Nepal: Federalism for Lasting Peace. Journal of Law and Conflict Resolution, 1(5), 121–140. Retrieved from