A glance at costs of conducting polls in Nepal

As the general elections (Province + Federal) closes in, the_farsight takes a quick glance at the costs of conducting polls in Nepal over the past 15 years, along with campaign finance and some of their implications:

Rising costs of election

The cost of holding elections in Nepal has typically been disproportionate compared to the country's economic capacity. 

During the first CA election in 2008, it is estimated the election commission alone spent NRs 7.6 billion. This election, the commission has sought a budget of NRs 10 billion, while already spent NRs 5.34 billion for the local election. The total is twice the budget of the first CA election. 

Although the 2017 and 2022 elections include three tier elections, and the commission's expenditure may be justified, the elections entail other costs too, mostly spent on ensuring election security. This brings the estimated costs to over NRs 29.71 billion which may rise further as the election concludes. 

During the 2017 election, the total government spending is estimated at NRs 34.72 billion.

The extent of money that flows into conducting elections and campaign finance, for cash-strapped econonomy like Nepal, is alarming. 

Although there are few ways to reduce the costs like adoption of Electronic Voting Machines (EVM) and digitisation of the election process, political parties are still not convinced on adopting the technology as there are a large number of political parties to accommodate in the EVM.

Campaign spending

Other than government spending on conducting polls, candidates also spent massively for campaign financing. 

'A Study on the election campaign finance local, federal and provincial in 2017’ by the Election Observation Committee revealed that election campaign finance amounted to NRs 96.9 billion during the 2017 elections. 

With the government expenditure to conduct polls combined, the total election bill amounted to NRs 131.62 billion. 

Even top political leaders like Prachanda and Shashank Koirala have openly acknowledged that candidates have to spend massively for election campaigning to increase their winning chances. 

Such expensive election campaigns without transparency diminishes election integrity as candidates feel compelled to recoup their election spending once assuming the office. Excess flow of money into politics also increases the likelihood of corruption and nefarious influence of elites and businesses, eventually threatening democracy and governance.

Hidden economic costs of election

Determining the true economic cost of elections is challenging, beyond the already daunting estimates of polling and campaign expenditures.

Elections spur short-term demand as money pumps into the market during polls and campaigns. But election fever across media, villages and metropolitan cities, closure of schools and businesses during election times and prolonged vote counting have different economic effects as work and productivity stall.

Expensive elections are more likely to lead to poor economic outcomes, especially when they result in the victory of incompetent candidates and increase the risk of corruption. 

Opportunity costs of election spending

For Nepal, the massive amount of finances that goes into elections (conducting polls + campaign finance) have huge opportunity costs. Public finance on elections can be used for much needed public investments. Similarly, election campaign finance can go into social welfare and private investments like businesses.

Lost investment due to invalid votes

According to the Election Observation Committee study, election spending per voter was NRs 4,923 during the 2017 local election (polls + campaign combined).

With 17% of the votes cast deemed invalid, an estimated NRs 11.42 billion in election spending went to waste. 

Such wastage, which is one of the highest in the world, further raises the question about the effectiveness and credibility of overall spending on elections.