1. DOES SPOILS SYSTEM SPOIL GOVERNANCE: EVIDENCE FROM NEPAL Shiva Hari Adhikari Nepal Administrative Staff College

2. Introduction  Establishes and promotes informal governance (Brinkerhoff and Goldsmith, 2002)  Greater risk of despoiling the public fund for personal purpose (Friedrich, 1937)  Applies rules with partiality and some citizens get preferential treatment  Effective in implementing the decisions of government

3. Introduction  Creates unauthorized transactions: developed or, even, in not fully developed spoils system  Establishes patron-client relation/network  Holds control over policy decision and implementation  Encourages favouritism, nepotism and corrupt practices

4. Spoils systemGovernance Patronage Chooses public officials on a political and not on a merit basis Works for mutual material advantage Creates established relation or networks

5. Nepal  Recently experienced political and socio- economic changes  Governance has dual character: (In)formal  They are less easily separable  Chakari: originated during Rana regime  Public Service Commission,1951, Anti- Corruption Act, 1952, Civil Service Act, 1957, and Commission for Controlling Abuse of Authority, 1977

6. Nepal  Norwegian Agency for Development Cooperation, 2011  Informal practices more prevalent  Corruption  Bureaucratic and legislative norms to clientelism and patronage  Dix, Hussmann, and Walton, 2012  Patronage system is apparent in society, economy and politics  Corruption

7. Objectives  The primary objective of this study is to test the relationship between spoils system and governance. The objectives are:  to seek the relationship between spoils and corruption, and  to evaluate the effect of spoils in the governance system.

8. Research Question/Hypothesis  R.Q.: Does spoils system spoil governance?  Hypothesis 1: Spoils system has positive significant relation with corruption  Hypothesis 2: Spoils recruitment and promotion worsens the governance

9. Data and Model  Challenging task to measure governance and corruption  For more precise measure controlling for behaviour and attitude is needed.  Research Design: descriptive as well as explanatory  Sample size (N) = 273: 106 (public officials), and 167 (students)  Peer review and pretest of questionnaire

10. Data and Model  Data collection and processing: 380 distributed, 324 returned (51 have quitted or incomplete), 273 fully complete and usable, 85% return rate, 72% response rate  Data analysis: Factor analysis, reliability test and regression analysis

11. Summary of Variables Type of variable Name of variableNumber of items included Measurement DependentPoor governance (newly created) 5Five response Likert Scale Corruption (newly created)4Five response Likert Scale IndependentSpoils system (newly created)4Five response Likert Scale ControlExperience of briberyYes/no questionNominal (Yes =1) Future intention of briberyYes/no questionNominal (Yes =1) Political affiliationYes/no questionNominal (Yes =1) Family member a government employee Yes/no questionNominal (Yes =1) Family member a politicianYes/no questionNominal (Yes =1)

12. Variables and Their Descriptions VariableStatements incorporated to create new variable and its index Spoils systemTop executives are appointed as per personal connections with political leaders. Top executives are promoted as per personal connections with political leaders. Personal relationship matters in promotion. Appointments to key positions are influenced by politics. Poor governance Service receivers get poor service with less choice. Service delivery mechanism is biased to benefit only a few. Government regulations and procedures are not transparent. Citizens do not get proper and timely services that they are entitled to. Government agencies are not accountable for the application of regulations and procedures. CorruptionCorruption is widespread in our country. Salaries are supplemented with bribes and kickbacks. Civil servants involved in corrupt practices are not punished. Corruption is reinforced by culture and tradition.

13. Statistical Analysis Results DV: CorruptionDV: Poor governance Standardized coefficients Sig.Standardized coefficients Sig. tt Spoils system***.4588.41.000.53410.245.000 Experience of bribery [Yes=1].0601.097.273.0711.342.181 Future intention of bribery [Yes=1].1091.968.051.0851.608.109 Family member government employee [Yes=1] -.021-.370.712.013.250.803 Family member a politician [Yes=1].026.437.662.0581.031.304 Political affiliation [Yes=1] -.009-.158.875-.028-.510.610 R-Square.237.302 Adjusted R-Square.220.286 F Value 13.783 (p <.0001)19.191 (p <.0001) Durbin-Watson value 1.6891.611

14. Interpretation and Discussion  Curbing corruption and improving the governance: Local, regional and global agenda  Good governance: extremely important but not possible if there is spoils recruitment and promotion.  Although the spoils system causes corruption, the adoption of spoils system might be effective in implementing the decisions of government.  Positive effect of spoils in corruption and poor governance should be carefully interpreted.

15. Interpretation and Discussion  The governance system in Nepal is not satisfactory  Other loopholes causing corruption and poor governance regarding the spoils system  Formal vs informal governance  Legal mechanisms vs implementation/rule of law  Purely merit based vs spoils within merit