Hope Is Not a Plan

Something happened this week that I have been waiting for my entire adult life. And now that it has happened, I am terrified it will be wasted.

RSP swept to power. Gen Z buried a political class that deserved burying. For the first time in my memory, Nepal feels like it might actually work. But hope is not a plan. And this moment, this extraordinary, fragile, unrepeatable moment, demands more than celebration.

I have spent years studying development, why some countries escape poverty and others do not. I believe Nepal’s answer to that question is being written right now. So let me try to be useful rather than just hopeful.

The Gen Z protesters who took to the streets were not demanding a new GDP target. They were not asking for a foreign investment strategy. They were demanding something more basic: that the rules actually apply to everyone. In economic terms, they were demanding better institutions. Not new institutions, better ones. Nepal already has a federal republic, proportional representation, an independent judiciary, constitutional commissions for human rights and anti-corruption.

On paper, Nepal has done the homework. So why has it failed so completely?

Douglass North, a pioneer of institutional economics, made a distinction that answers this. Formal institutions are the written rules: constitutions, laws, official bodies. Informal institutions are the unwritten ones: patronage networks, caste loyalty, Chakari system and the revolving door of coalition dealmaking that everyone knows about but nobody calls by name. Nepal’s problem is not a shortage of formal institutions. Nepal’s problem is that informal institutions have colonised the formal ones. Every anti-corruption commission gets staffed by party loyalists. Every federal transfer gets skimmed. Every judicial appointment becomes a negotiation between coalition partners. The formal shell exists. The informal reality hollows it out. This is why thirty years of constitutional reform produced so little. You cannot fix a formal institution problem by building new formal institutions if the real problem is informal capture. The new body simply gets captured too.

When the protesters demanded an end to corruption and nepotism, they were asking, whether they knew it or not, for existing institutions to actually function as designed. That is harder than building new ones. Informal institutions do not sit in laws. They sit in culture, in livelihoods, in how entire careers and families and political organisations are structured. The parties that just got routed, NC and UML, built their entire existence around these networks. Those networks do not disappear because RSP won an election. They will reconstitute themselves around the new government if given the chance. The clock started ticking on election night.

But nobody is talking about the real tension.

Two books frame the deepest debate in development economics right now. Acemoglu and Robinson’s Why Nations Fail says: fix your institutions first, development follows. Build inclusive rules, secure property rights, checks and balances, and prosperity comes. Yuen Yuen Ang’s How China Escaped the Poverty Trap says the opposite: China did not wait for perfect institutions. Beijing set broad goals and let local officials improvise. Markets and institutions got built at the same time, each shaping the other. It was messy, it was unorthodox, and it worked.

Balen Shah and RSP are operating from these two different playbooks. And that tension, if left unmanaged, could fracture this mandate from the inside.

Balen’s track record as Kathmandu’s mayor is pure Ang. He did not wait for perfect conditions. He used existing legal powers that had never been enforced. He found bureaucrats who wanted to deliver and empowered them. He got visible results, cleared riverbeds, demolished illegal structures, and collected taxes from powerful interests who had never paid. He used those results to build legitimacy for the next fight. His instinct is: find what works, do it, build credibility through delivery, worry about the architecture later.

RSP as a party was born from the opposite instinct. Its founding energy came from people who were angry precisely because the formal rules were not being followed. Its natural policy direction is to fix the rules: judicial independence, civil service reform, merit-based recruitment, transparent anti-corruption architecture. This is more like Acemoglu and Robinson.

Neither is wrong. But they disagree about what you do first when you have power. And in government, sequencing is everything.

RSP’s parliamentary bloc will push for formal reform through legislation. Balen, as prime minister-designate, will be improvising delivery through the executive, and may find himself working around those very institutions when they move too slowly. If that friction becomes public and unresolved, the old party networks will exploit it. So will geopolitical actors. So will every domestic interest that benefits from ambiguity.

So what must happen?

Rabi Lamichhane and RSP’s parliamentary leadership should own the formal institutional reform agenda. Judicial independence. Merit-based civil service. Anti-corruption with real teeth. This work is slow and unglamorous but essential. Balen, as prime minister-designate, should own an executive delivery agenda. Specific, visible, measurable targets in infrastructure, health, education, delivered through whatever combination of willing bureaucrats and personal accountability he can assemble. This builds the political legitimacy that keeps the reform coalition alive long enough to actually change the institutions.

This is not a compromise between two visions. It is the most coherent strategy available. Ang actually describes exactly this relationship between Beijing and local officials: the centre sets institutional rules, localities deliver within and sometimes around them, and the two stay in productive tension rather than collapsing into one approach. It worked because both levels understood their role.

For Nepal, the critical thing is that both Balen and RSP’s leadership must know this is what they are doing. They must articulate it to each other, to their party, and to the public. Without that shared understanding, what could be a powerful strategy will feel like constant internal conflict. Reform movements have destroyed themselves on exactly that misunderstanding.

Every successful institutional reformer in history did one thing during their window: they built a core of state capacity that was insulated from patronage before the old networks could reconstitute. They moved fast because they knew the window would close.

RSP has something rare: a genuine mandate, a weakened opposition, and a leader whose credibility comes from actual delivery rather than political inheritance. That combination may not come again for a generation.

The mandate has been given. Nepal has had too many moments of hope that dissolved into the familiar patterns. What this moment demands is not just energy and courage, both of which RSP and Balen clearly have, but strategic clarity about what they are solving and the sequence in which they will solve it.

Do not waste this. Please.

Jay Nepal.

This post was originally published on Substack. If you enjoyed this content, consider subscribing to my newsletter for regular updates.