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Sep 29, 2013

Contract Enforcement: The Practicalities of Dealing with Commercial Disputes in Nepal

Cost-effective and timely enforcement of contracts, especially the commercial contracts is a prerequisite for economic growth of a society. Without effective contract enforcement mechanisms, the tendency to breach a contract will be higher and discourage people and companies from undertaking impersonal and large-scale ventures. In World Bank's Doing Business Report 2013, Nepal ranks 137th out of 185 economies with regards to ease of enforcing contract enforcement. Why is the scenario like this? Why are Nepalese reluctant to enter into formal contracts and what alternatives to formal contract enforcement can be used in Nepal's scenario to make it more effective? 

I have coauthored the following paper on contract enforcement in Nepal with two other colleagues at Samriddhi, The Prosperity Foundation. This paper analyzes contract enforcement in Nepal focusing on the settlement of commercial disputes. It looks at the current contract enforcement scenario and discusses about the alternatives to formal contract enforcement mechanism i.e. through courts.