Forest Governance under Federalism in Nepal for Forest Restoration and Equitable Livelihoods

The policy outcomes in forest restoration depend less on restoration rhetoric and more on how the restoration is operationalized through specific management regime, determining who manages forests, who benefits from them, and how ecological recovery is balanced with livelihood and economic objectives. This policy brief draws on over 25 years of ForestAction Nepal’s (FAN) research and policy engagement in forest management, restoration, forestry economics, and forest governance to delve deeper into these evolving issues.

Key Messages

Nepal’s response to forest degradation has evolved through three dominant management paradigms: strict protection, community management with subsistence use, and in recent years market led economic justifications, each shaping restoration in distinct ways.

Past efforts have generated significant achievements in forest restoration. However, there are serious gaps in the economic realization of resources and equity and livelihood aspects of people.

Policy confusions, exhaustive regulatory and administrative requirements, and limited technical and investment capacity of both government agencies and forest user groups have constrained materialization of economic potential of the forests.

Greater institutional clarity and functional reallocation may address the existing capacity gap by positioning local governments as selective administrative and supporting authorities. This will also allow DFOs to concentrate on technical forestry and environmental integrity.

Citation: Gautam, A., Paudel, N.S., Banjade, M.R., Karki, R., Acharya, H.N. and Gotame, B, 2026. Forest governance under federalism in Nepal for forest restoration and equitable livelihoods. Policy Brief No. 56. ForestAction Nepal.