Root cause analysis uses a simple but powerful method where you keep asking ‘why’ until the root source of a problem shows up. Each question strips away assumptions, leaving us with simpler explanations. I learned this not in economics or politics, but in science as a signatory for lab reports. My name was on the line. If results were wrong, it was my fault. No excuses. Accreditors demanded proof of the root cause and a fix to prevent repeats.

It’s a straightforward way to break down complicated technical systems. But when we shift to questions like “Why do nations fail to create enough wealth?”, the terrain becomes more complex with multiple causes that are inseparably tangled. Still, I’m interested in how far this kind of thinking can take us by simply continuing to ask ‘why’ and seeing how deep the chain goes. Let’s start.

Why is our country poor? Because our economic growth lags behind richer nations. And why does it lag? Because we do not produce enough goods and services, especially the high-value ones that command strong prices in the global marketplace.

Why don’t we produce enough high-value goods and services? Because we lack the right skills and incentives, and we have not yet built a comparative advantage in more valuable activities.

Why is this? Because our institutions do not protect and enable domestic production (internal consumption or export). Also, our institutions do not sufficiently reward hard work and innovation. Moreover, our educational institutes have not equipped our people with skills that the economy needs.

Why are our institutions broken? Because institutions only function when a critical mass of people inside them are incentivized to choose the collective good over personal gain. Here is the hardest why: why don’t more of us choose the collective good over personal gain? Because whenever opportunity appears, most of us instinctively perform a cost–benefit calculation in our heads.

In our case, that calculation almost always favors corruption. The benefits are immediate and concrete: cash to meet family needs, faster promotions, coveted postings, political protection, social prestige, and the ability to secure jobs and favors for relatives. The costs, by contrast, are weak and uncertain: detection is unlikely because corruption is widespread; social status is insulated from the source of wealth; enforcement is selective and politicized; and even when cases surface, money and connections can delay, dilute, or derail accountability.

Why are our institutions broken? Because institutions only function when a critical mass of people inside them are incentivized to choose the collective good over personal gain. Here is the hardest why: why don’t more of us choose the collective good over personal gain?

In this environment, corruption becomes the rational choice. Over time, it hardens into a social default, a habit so ingrained that complete honesty feels unnatural, even showy. No one debates whether to participate anymore; the only moral dilemma left is one of scale: petty graft or grand theft, compromising a bridge’s quality or inflating procurement invoices.

Let’s move from why to how. If this diagnosis sounds abstract, the mechanics are anything but. How does the sordid underbelly of our institutions operate?

The extractive structure is not new. It has run from Rana courts to Panchayat loyalists to today’s ministerial cartels. It relies on a permanent bureaucratic layer of intermediaries who outlast governments, control postings, procurement, and files, and induct each new political class into the mechanics of corruption.

Intermediaries provide system knowledge; politicians trade postings and contracts for loyalty; bureaucrats execute extraction and recycle rents through patronage and party finance. Each group supplies what the others lack: politicians offer protection and appointments, bureaucrats provide administrative control, and intermediaries coordinate flows. Together, they capture one another in a mutually reinforcing cycle. The logic is uncannily familiar to Adam Smith’s invisible hand: individual self-interest aligns and coordinates behavior without central direction. The difference is brutal: instead of creating national wealth, this system extracts it, efficiently and innovatively.

Occasionally, reformers arrive promising to break the cycle, but they begin at a fatal disadvantage: they lack intimate knowledge of both formal rules and informal networks and must rely on the very intermediaries they intend to dismantle. As they learn how the system works, they do so incrementally and under information constraints, forcing them into bad alliances and unholy compromises, each small concession framed as necessary to function. By the time they fully understand the machinery, they are already entangled: a favor accepted, a posting approved, a contract signed.

Political leaders, who are meant to dismantle this extractive system, fall prey to the same corrosive forces. The ruin begins from internal factions, constant compromise, and the relentless focus on personal position over public duty. I remember Gagan saying in an interview that one of the root causes of governance failure is politicians spending most of their energy on internal competition, coalition formation, and maintaining their own position, instead of doing their actual governance job.

History rarely offers comfort, but it does offer patterns. As the book “Why Nations Fail (Acemoglu and Robinson)” shows, extractive systems rarely dismantle themselves. Economic progress usually follows critical junctures, moments of shock or deliberate choice that force a new path: Singapore in 1965, Taiwan after 1947, Deng’s reforms in 1978, and South Korea after the devastation of the 1950s war.

Political leaders, who are meant to dismantle this extractive system, fall prey to the same corrosive forces. The ruin begins from internal factions, constant compromise, and the relentless focus on personal position over public duty.

If this is our critical juncture, the question becomes not theory but choice. Whoever wins has a chance to steer us toward economic progress. Reading the manifestos, I am cautiously hopeful. RSP, Congress, and Ujyalo Nepal all converge on growth and employment. We appear, finally, to have grasped the essential truth: it’s the economy, stupid.

RSP edges Congress on economic focus. While I admire Gagan Thapa’s leadership and remain wary of Balen’s style, I must admit that Swarnim Wagle appears to have thought this through most carefully. His agenda shows ruthless prioritization of growth: bolder hydropower targets, aggressive efforts to slash production costs, and a clear sequencing that grows producers first. Congress’s plan is solid too. That’s not what worries me. I worry about the internal party politics. It’s a pressure cooker of pent-up ambitions and expectations, both good and bad. A win makes it explosive because everyone wants a share, and a loss is just as dangerous because everyone looks for a scalp.

My first unsolicited piece of advice is to find a way to separate internal party politics from the task of running governance. My second is to focus on the economy even before institutions. Why Nations Fail insists institutions come first, but as I showed earlier, we must first change the cost–benefit calculation for the individuals who run our institutions. I believe Eric Reinert offers a more pragmatic path toward that end: prioritize and protect domestic production, focusing on high-value economic activity like energy, IT, and AI services. Lock in a virtuous circle: grow a middle class of technicians and coders whose wages crush bribes and fill state coffers with taxes. As this class expands, it will demand accountability and drive continuous improvement of institutions because they now have skin in the game.

My view is simple: it’s the middle class, stupid.

Anil Gautam, PhD (Chemistry), is an Australia-based environmental scientist specializing in scientific consultancy for infrastructure projects. He provides expert environmental impact advice to government agencies, leveraging his technical background to guide sustainable development and regulatory decision-making.