Nepal, Jan. 21 -- Defendants of the rationales of federalism argue that such a system would better ameliorate the 'problems of accountability associated with traditional modes of delivery involving centralised bureaucracies [which] include cost padding, service diversion, limited responsiveness to local needs, limited access and high prices charged especially to the poor.'

But the same devolution of fiscal autonomy has often proven to be a major threat to the very fate of the federal system, as it also effectively decentralises the practices of financial defalcation, corruption and irregularity. These risks, to a large extent, are structurally embedded in the federal system itself, because corruption-related investigation, control and pr...