Nepal’s federalism debate has taken many turns over the last decade. In particular, the discussions on ethnicity-based federalism has been a much contested one. Scholars in favor of ethnic federalism such as Mahendra Lawoti strongly argued that creating federations along ethnic lines is the only way to dismantle the status quo, and the centuries of prior regional and class/caste based exclusion to develop a strong democracy. Others such as Lovise Aalen & Magnus Hatlebakk, comparing Ethiopia’s case with Nepal, provided a “cautionary tale” about the use of ethno-politics and federalism demands that had real democratic sources but turn into an anti-democratic tool of party dictatorship. This paper discusses comparative work on Nepal’s democratic transition to explore competing views on democracy and federalism.

At the theoretical level, scholars have at times emphasized the anti-democratic features of federalism, in which the will of small regional states prevents large-scale political action by a national majority (Riker 1964). In part, this is the point – to empower localities or sub-groups against the larger majority. This approach has been challenged by Stepan, who argues that only some federalisms are truly “demos-constraining” and that developing countries (like Nepal) do not have to choose between greater democracy or greater ethnic or minority political rights on the other (Stepan 1999). More broadly, work on the ideal of “multicultural citizenship” or a “politics of representation” has helped to change how the concept of democracy is analyzed within political science, with major implications for the study of ethnic federalism (Kymlicka 1995; Taylor 1992; Young 1990).

In this paper, I focus on the extent to which democratization is strengthened or weakened by the creation of federal structures, especially when ethnic conflict or grievance is the driving force behind federalism. Using a comparative politics perspective, I will discuss the dynamics of federalism in developing countries like Nepal, in fragile affluent federations like the European Union, or within increasingly polarized federated states like the United States. The idea that federalism is a kind of cure-all for democratizing states has been challenged, as in work on post-Franco Spain by Omar Encarnacion (2001) that explores the ways that federalism has contributed to building a democratic society, but also failed to prevent violent ethnic conflict or separatist politics. Drawing on material I used for my master’s thesis about ethnic federalization as well as new research that has emerged since September 2015, I ask: What are the roles of regional, national, or ethnically-identified political parties since Nepal has adopted a federal system? In the end, I will propose a comparative politics methodology to study the effects of the new federal structure on democratization, as measured by several variables, in two different districts in Nepal.