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Nepal’s Social Security Reforms, State-building and the Role of Trade Unions

Trade unions play an important role in Nepal’s post-conflict economic development, but their influence is under-studied. Using a qualitative case study, this article examines the negotiations surrounding the development of Nepal’s Labour Law and Social Security Act. The evidence highlights the difficulty of bedding down a new welfare regime for workers in a country that does not have a strong, established, state-run welfare system and lacks robust government institutions. The article provides insights into the function of trade unions and other political entrepreneurs and their role in reforms. While unions know the ‘rules of the game’, they serve their paying member base in a stringent, democratic manner. They need little assistance from donors, as they understand how to play the game in a more astute manner than other groups excluded from traditional power. This does not mean that the trade union movement is a threat to building an inclusive state or that it aims for elite capture. Instead, it reveals how the power captured by the traditional upper caste is being slowly diffused. The negotiation strategies presented in the article are relevant for development partners engaging in welfare-related reforms in post-conflict and clientelistic states.