Erosion of Social Contract: Ramesh Shrestha

A contract without a lawyer

There are written and unwritten rules that govern relationships between governments and the people where the government becomes the custodian and the citizens become the receiver of government eservices and protection from harm. And in return citizens abide by the state laws including paying taxes. Within families too there are written and unwritten rules that govern roles and responsibilities between parents and offsprings and between siblings.

The 'Will' is a written rule and all other everyday relationships are conducted with unwritten rules founded on traditional values, trust and emotions. These unwritten rules governing our relationship with each other and with the government is what philosophers called social contract, first used by Thomas Hobbs in the 17th century. As the governance system evolves over time so has the social systems and value influencing how social contracts are executed. In the past decades the dissatisfactions with social contracts (resentments) with the governments were largely due to ideology such as against communism and dictatorships. In recent decades almost all countries in the world practice some form of democracy yet, people seem growingly unhappy with their governments which negatively impacts the execution of social contract between the government and its citizens. Are there good reasons for erosion of social contracts and lack of trust in government?

Political corruption

Citizens are questioning the legitimacy of the ruling class as signs of political corruption with income inequality as an outcome becoming increasingly visible globally. It is also true that whenever a government needs to 'adjust' its budget the target is to slash social sector budgets while at the same time increase taxes. All such actions result in erosion of trust between the government and citizens. There is also external political influence that makes the government's behaviour different than what people expect which makes people question the government's intentions on social and economic policies with often broken promises. Disappointments of people against governments are palpable everywhere.

Globalisation of the economy and related components such as transportation, communication, banking and spread of private corporations contributed to economic growth but it also created untouchable mega corporations. They have the capacity to dictate terms and conditions of national and international economic and trade policies benefiting the investors and shareholders. The government's focus is on GDP growth which needs cooperation of the industries and financiers. It leads the corporations to dictate terms that suit them but not the interest of the general public. This is perhaps the seed that destroys the social contract between the government and the citizens. Industrialisation and GDP growth as such is not the problem. The issue is how it is managed, such as by Vietnam and the People's Republic of China. But people are prejudiced against communism. People seem to forget that one need not be a communist to manage your country's economic policy.

Abuse of authority

Many political elites have their ego bigger than life which makes them feel invincible. It leads to unfair practices including corruption with full impunity. It creates unequal opportunities often creating gaps between those with political connections and those who do not. When service providers are politically protected it creates deep roots of corruption breaking off or inefficient social services as the service providers are immune from prosecution. It is the early sign of the erosion of social contract between the government and the citizens. The ultimate outcome is the wealth disparity, a seed of political unrest. Over the past fifty years or so the world has seen many political upheavals when the governments fail in fulfilling its part of the social contract. One of the most notable political movements was the demonstration against the late President Marcos of the Philippines that started on 22nd February in 1986, which led him to flee the country on 25 February 1986 after twenty years of autocratic rule.

In Nepal there was people's movement in 1990 which ended absolute monarchy that had reigned since 1768. The constitutional monarchy, institutionalised in 1990 faced another people's movement in 2008 which resulted in the abolishing of monarchy replaced by a multiparty democratic system. Recently there was yet another political movement in September 2025 demanding political changes in Nepal, led by Gen Z, leading to the collapse of the government within 27 hours. Nepal's Gen Z movement seems to have caught on in countries far flung such as Madagascar, Morocco and Peru. In all these cases the common cause is abuse of authority and corruption by the political elites. In Nepal we had one King and his heir for 240 years but we now have three Emperors with their extended family and network of henchmen since 1990 suckling on Nepal's economy.

In South Asia, the Middle East and several North African countries there were dozens of variously named coloured movements and 'Arab Springs', yet people's plight for stable income and political stability has not materialised. There are also external political influences in some countries, which makes it even more complicated.

Beyond corruption

Oxford dictionary defines Freedom as for people to do whatever they wish to do, "within reasons". However, the exercise of freedom by people may have indeed destroyed nature as well as people's lives itself as people forget the "within reasons" component of freedom. It started with the exercise of freedom by a powerful few with 'immunity from obligations' which resulted in a sense of individualism – me, myself and I, distorting a sense of community belonging, even distorting family relations taking the social contract to the brink.

Freedom may also have contributed in weakening the governance, not because freedom is wicked but because the idea of freedom has penetrated deep into the heart of the private sector which has taken control of all basic social services for profit rather than a public service. It has even privatised water, a basic necessity for survival of people. If it is a question of cost recovery, provision of basic services should be at least based on non-profit basis but it is not. It has marginalised ordinary people in every possible way. Certain groups of people have converted the unwritten social contract with the government into an unwritten business contract, which has put the majority of people, especially in developing countries, at great disadvantage. Private sector has made the cost of communications free globally but it is recouped by sky rocketed prices on everything else. Freedom of the private sector has converted the lives of people into private businesses. Even basic education, health care and water have become unaffordable for many. The idea of social contract is in collusion with economic liberalism pushed by the globalist agenda of the few. In this intertwined world it is essential for countries to reform the market and integrate the economy with international finance but should not be at the cost of country' citizens. It is especially harming the citizens in low-income countries. It is a complete breach of trust between government and citizens.

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