Last week, 2009's winner of the Nobel Memorial Prize for Economic Sciences, Elinor Ostrom, visited Nepal for a whirlwind four-day tour of the capital. She spoke to Kanak Mani Dixit about Nepal's historically successful community management of its resources.
Kanak Dixit: Though Nepal's heritage is ancient, including in managing common property resources such as forests and watercourses, we seem always bent on abandoning our successes. We experimented for five years with local governance, drawing on the legacy of participatory management, but now that has been killed off. Community forestry is under fire. One gets the feeling that some of our decision-takers and opinion-makers are blind to our heritage. 
Elinor Ostrom: Well, that's not unusual. Scholars all over the world greeted Garett Hardin's 1968 article on 'the tragedy of the commons' with enthusiasm because it is very easy to presume that everyday farmers, fisherfolk, and those managing the forests are trapped and cannot break away from overexploiting resources. It's sad, because in Nepal there is an incredible history of communities doing fabulous work. There are state solutions and market solutions that are talked about, and the options given are either privatisation or government takeover, but you have to look at the Nepali example of local governance. Together with scientific knowledge, you have to respect indigenous knowledge.
KD: For decades in Nepal's modern era, we have been seeing fields leading up to shrub-land, then forests. It was only from the 1990s onward that we began to notice sharp delineation between fields and forests, like, shall we say, in the postcards of Switzerland. Are we seeing proof of the success of community forest management, where the transfer of responsibility also brings about these sharp demarcations?
EO: I think so. I have seen how local communities, when they are given real ownership, have the incentive to try to get as much of the forests planted and productive. When there are harvesting rights, for non-timber products, firewood and timber, you create long-term interests. But when there is conflict or if government takes things away, it is not always easy for forests to recover. When highly degraded forests are handed back, it is difficult for the communities to nurse them back to good health. You have to remember that some of Nepal's forests were managed by villagers well into the 1970s and 1980s, and only thereafter came under government control.
KD: While researching the common pool resources of Nepal, I wonder if you have followed our experience with the elected VDCs and DDCs. Today, not only are there no elections, this local government machinery is completely corrupted with a so-called 'all-party mechanism' in place. This is the opposite of what elected local bodies are supposed to be, but even the development agencies are quiet as local government is denied.
EO: I know more about the Panchayat years. Back then, the villages had a lot more power and capacity because they had remained outside the reach of government. When I first started doing research in the middle hills, in areas where the central government was not very active, the locals had to do things themselves or they wouldn't get anything of value. So there was a lot of self-organising going on in irrigation, forestry and other areas.
KD: Your work serves to remind us of a previous reality, which existed in places even during the Panchayat era.
EO: Yes, but of course it was not perfect because one doesn't find people governing themselves in ways that are always fair and efficient. Community management systems can succeed or fail. If it is for yourself, your children and grandchildren and your friends' grandchildren, you have an incentive to do something better. But there are problems. Hetereogeneity can be a challenge in a forest governing unit, in terms of the existing divisions by caste, wealth or ethnicity, even though this does not automatically guarantee failure. It is true that the caste structure did not make success uniform in the community-managed system.
KD: We are at a point in Nepal where a sense of failure pervades the landscape. The long-standing political confusion has made the public at large despondent.
EO: You have such rich heritage! I started doing research here sometime in the late 1970s and early 1980s and I was really impressed with what I saw out in the villages. Compared to government-run irrigation systems, the farmer-managed ones were more efficient and equitable. They were generating higher harvests, there was more water getting to the tail-end users. Remember, they do not use fancy systems �" these are logs and mud canals that control and divert the water, employed with great ingenuity. In the Rapti Valley, there were 85 irrigation systems giving farmers three crops a year. Engineers came in, disregarded these so-called primitive works, and recommended a huge irrigation system to be funded by the Asian Development Bank. It would have ruined the local communities, but fortunately there were some alert scholars who were able to stop the project. In another place in Rapti, a development agency came in and built over the existing farmer-managed irrigation system. Production went down.
KD: How unique are we in Nepal, in terms of putting in place misconceived infrastructure and ignoring local traditions?
EO: This is not unusual, you see a lot of it in Africa, for example. Development workers come in and often disregard the ingenuity of the local people. The mentality is, "We have the engineering, we have knowledge, we can design, we will tell them what to do, and they can learn." This really undercuts communities with rich heritage of indigenous knowledge in managing the commons. But in recognising the local communities, you cannot employ one-size-fits all solutions. Uniform decentralisation of forest or water systems through a single piece of legislation frequently does not work. Managing irrigation for 10 farms from a creek is different from the expensive headworks required to serve 300. There will be different design requirements for systems in the Tarai, hills and upper hills. Rules and ways of management must fit individual situations, and we must get the young people to recognise that there is something to learn from college textbooks as well as from their heritage. Development work does require rigorous research and analysis, but sometimes local communities are able to do a lot on their own.
KD: In the public discourse here, we talk a lot about community forestry but not about farmer-managed irrigation.
EO: (Showing surprise) But it is one of the success stories of the world! I have worked with Nepali colleagues, who have studied both irrigation and forestry very seriously. We have a database of over 250 sites both of farmer-managed and 'agency-managed' irrigation systems, and the former are more efficient, equitable and productive.
KD: As a researcher focused on rural Nepal, how do you feel about what villagers had to go through during the conflict?
EO: It's terrible, and the tragedy is that poverty only gets worse when you have a situation in the villages where you fear to go out to do anything. The big finding from our work in this country and around the world, is my favourite five-letter word �" 't-r-u-s-t'. If you've gone through a civil war, that destroys trust, and rebuilding it is very hard.
KD: How do we rebuild that trust?
EO: It's kind of step-by-step, and a lot can happen in the villages through initiations such as farmer-to-farmer training. Some farmers from Sindhupalchok whose irrigation systems were not working very well were taken to Palpa, where many of the systems are effective. The sharing that the farmers of Palpa did with those from other parts helped build on the social capital and knowledge that was already there.
KD: There are two themes I take away from this conversation �" one, that we can use the social capital that exists in rural Nepal to rebuild trust that has evaporated.
EO: It won't happen fast, but it's essential.
KD: And the other, that people working together will reduce poverty.
EO: As long as they work together on something manageable, then they can be successful. And as long as we recognise that there are multiple ways of doing things.
KD: One last question: does Nepal have a share in your Nobel Prize in Economics?
EO: Yes, indeed! The villagers of Nepal do!
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