The Constituency Development Fund (CDF) in Nepal is a government initiative that assigns a specific budget to members of the federal parliament and provincial assemblies, allowing them to implement small- and medium-scale development projects within their constituencies. However, the CDF has been a subject of controversy due to ongoing concerns about transparency and accountability.

Despite undergoing name changes under different governments, both in the unitary and federal systems, the CDF has faced consistent scrutiny. As a result, questions regarding the fund's effectiveness and its potential impact on the overall development process have arisen. The recent announcements by the federal and provincial governments in their upcoming budgets regarding the allocation of such fund has raised alarming concerns among the public.

The implementation of the CDF in several South Asian and African developing countries has yielded unfavorable outcomes. These initiatives have been associated with negative impacts on accountability and service delivery. The experiences with the CDF programs highlight the importance of addressing governance issues, strengthening oversight mechanisms, and promoting transparency and accountability in order to achieve the desired development outcomes.

It appears that lawmakers often face the temptation to engage in budget management and spending, despite their primary responsibilities in law-making and policy formulation. This diversion from their core duties has detrimental effects on their ability to effectively carry out oversight functions. There are important lessons to learn from national and international contexts:

• Violation of Separation of Powers: The CDF undermines the democratic principle of separation of powers by assigning the executive function of budget execution to the legislature. This leads to conflicts of interest and potential conflicts between local and central governments.
• Weakens Federalism: The CDF undermines the ideal of devolution and vertical separation of power. It hampers adequate resourcing and empowerment of local government, thereby weakening the principles of federalism.
• Regressive Effect on Development: The CDF has a regressive effect on development as it distributes scarce resources equally among constituencies without considering specific needs and potentialities. Studies have shown that project selection under the CDF is often driven by political interests rather than prioritizing the most vulnerable and disadvantaged communities.
• Undermines coherent local government strategies: The CDF encourages ad-hoc projects, undermining coherent local government strategies and programs aimed at addressing the underlying causes of poverty and inequality.
• Lack of monitoring mechanisms: The absence of robust monitoring mechanisms and internal audits creates opportunities for financial irregularities in loosely managed funds that are not part of structured fund-flow mechanisms.

In summary, the CDF does not strengthen the lawmakers. Instead, it diverts their attention from their core responsibilities and makes them accountable to the executive. It compromises the integrity of both the legislature and the executive. The lawmakers should prioritize their primary tasks and actively engage in providing critical feedback and holding the executive branch accountable for the implementation of the budget. By focusing on their oversight role, the lawmakers can ensure that public funds are utilized efficiently and effectively, promoting transparency and accountability in the budgetary process.

Acknowledgment goes to the lawmakers and youth wings who have been actively advocating for the removal of the CDF. Civil society organizations should play a crucial role in advocating for reforms and monitoring the implementation of the CDF.

Dr. Prabin Manandhar is an expert in international development. Currently, he is working as the Country Director of Helvetas Swiss Intercooperation Nepal. He is the Former Chair of the Association of International NGOs in Nepal (AIN). He is also a visiting faculty at Kathmandu University and the Tribhuvan University Institute of Crisis Management Studies. The opinions are his own and not that of his employer. He can be reached at prabin.manandhar11@gmail.com