During the review period, the first local elections in 20 years were held. The elections have been widely hailed as free and fair. While the rule of law and governance remain weak in Nepal, this crucial first step after a period of turbulence, however, should not be discounted.

Economically, Nepal appears to be moving past the 2015 earthquakes and the Indian trade blockade of 2015 to 2016. Though rebuilding after the earthquakes continues and full recovery remains some distance away, economic progress has done much to ameliorate conditions for average Nepalis.

Political elites have instrumentally used polarization techniques to create cleavages along ethnic and regional lines. Nepal’s new institutional framework, and federalism in particular, should manage these risks better than its old institutions, but only time will tell if it is truly up to the task.

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