The study on Contract Enforcement discusses three major problems in contract enforcement.
First, Nepal’s government is a known contract defector in itself. Second, the courts are cumbersome and crowded making the monitoring of contracts both costly and time consuming for the parties of the exchange. Third, informal contract enforcement institutions, such as reputation-based deterrence, are limited in scope.
While there are alternative dispute resolution mechanisms that also help enforce contracts, they are not in popular use and are not cost-feasible for low volume transactions.
Therefore, this paper focuses on low cost measures like mediation. It also discusses some marginal reforms in the existing state based mechanism for contract enforcement.
It is also published in Nepali.
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