The Gen Z movement has given Nepal something rare: A moral clarity. For the first time in years, politics is being driven by a generation demanding accountability, elevating the stakes of the upcoming election. Beyond leadership turnover, this election presents a choice: Whether Nepal will sustain political continuity long enough to support economic progress. Stability is more than governance or political issues. It is a foundational economic variable that affects investment, employment and long-term growth.

Cost of uncertainty

Businesses invest when rules are stable. Frequent government changes increase the risk of policy reversals, regulatory uncertainty, delayed approvals and contract renegotiation risks. Uncertainty raises the cost of capital. Investors wait, and growth slows. Stability, meanwhile, lowers risk premiums and boosts investor confidence. This alone can create economic momentum.

Foreign Direct Investment (FDI) offers a clear illustration. Nepal has long sought to attract external capital to accelerate industrialisation and job creation, yet inflows remain modest. According to Nepal Rastra Bank's survey for FY 2023/24, net FDI stood at just Rs8.4 billion (approximately $63 million). Of the Rs69.83 billion in committed investment, only 12 percent was actually realised.

Nepal’s domestic market is small. But market size alone does not explain investor caution. Political volatility compounds structural constraints. When ministerial leadership changes frequently and policy direction shifts with coalition dynamics, long-term investors adopt a wait-and-see approach.

Reform cannot be reset annually

Government tenure in Nepal has averaged just nine months during the multiparty democratic periods. Since 2015, only one government, Oli's second term, lasted longer than two years. Structural reforms such as tax administration, energy restructuring, and federal fiscal coordination cannot mature in 18 months. They require inter-ministerial coordination, administrative learning, political capital and evaluation and course correction. Frequent changes erode institutional memory, and economic transformation becomes episodic rather than cumulative. Reform, by definition, is a long game. A system that resets every year cannot play it well.

Fiscal discipline needs continuity

Short-lived governments face incentives for populist spending and constituency appeasement. This leads to fragmented capital projects, turning public investments into political optics rather than economic infrastructure that provide long term returns. Consider the trajectory of old age allowances. What began as Rs100 per month in 1994 reached Rs4,000 by 2021, a 3,900 percent increase. The allowance doubled from Rs1,000 to Rs2,000 in just one year (2014-2015) as coalition dynamics shifted. In 2018, the eligibility age dropped from 70 to 65, just before local elections. In 2021, the left alliance promised Rs5,000 per month during the campaigns. The eventual government delivered Rs4,000. The fiscal impact is telling. Social security spending surged from Rs26 billion in FY 2010/11 to Rs258 billion in FY 2024/25, now consuming 14.8 percent of the national budget.

Social protection is essential, but design matters. For example, a 75-year-old from a wealthy Kathmandu family receives the same allowance as an elderly Dalit widow in rural Karnali.

Stable governments can reform these programs: Introduce means testing, link benefits to verifiable need, and create automatic adjustment mechanisms. Short-lived governments cannot.

Building capacity through consistency

Institutions strengthen when leadership remains long enough to professionalise the bureaucracy, align incentives and improve procurement systems. Constant political reshuffling produces administrative paralysis and blurs lines of responsibility. When ministers and senior officials rotate frequently, no one remains in office long enough to be held accountable for outcomes. Policies fail, projects stall, and responsibility becomes diffused.

The Melamchi Water Supply Project exemplifies this dysfunction. Initiated in 1998 to solve Kathmandu's water crisis, it was supposed to be completed by 2006. Instead, it took 23 years to first deliver water. A simple example: In FY 2022/23, the government dissolved the Melamchi Water Supply Development Board, the implementing agency, through a budget speech, then reinstated it months later via Cabinet decision. For nine months, no work occurred at all.

This pattern repeats across Nepal's infrastructure. Projects begin with ambition, slow under administrative uncertainty, pause during political transitions, and restart under new leadership with revised priorities.

What voters should demand

Nepal's instability is structural. The proportional representation system, designed to ensure inclusivity, has made coalition governments the norm. Without a single-party majority, no government can claim a clear mandate or resist coalition bargaining. This is a constitutional reality.

But voters can change what they reward.

The Gen Z movement has shown that public pressure matters. What voters demand from coalitions shapes how those coalitions behave. If the electorate continues to reward short-term promises over long-term credibility, parties will continue to treat governance as a bargaining chip.

Are key economic positions going to technocrats or party loyalists? The central bank’s governorship should signal seriousness. When these positions rotate with coalition shifts or go to political appointees with no relevant expertise, economic policy becomes transactional.

This election, voters should ask harder questions. Not “When will you fix the pipe in front of my house?” but “How will you ensure that projects are completed on time and within budget?” Not “What will you give me this year?” but “How will you build institutions that outlast your term?”

A country that wants prosperity must first choose stability, and this election presents that choice.