Abstract

Global governance is increasingly shaped by challenges that transcend national borders, including climate change,pandemics, migration, international economic instability, technological transformation, artificial intelligence, andsustainable development. These challenges have expanded opportunities for small states to exercise influence throughmultilateral institutions, coalition-building, niche diplomacy, normative entrepreneurship, knowledge diplomacy, andinstitutional innovation. This study examines Nepal’s evolving role in global governance through a comparative analysis ofNepal, Bhutan, Rwanda, and Costa Rica. It asks why Nepal’s substantial international participation has not consistentlytranslated into equivalent agenda-setting influence and identifies institutional mechanisms that could strengthen itsfuture role. The study adopts a qualitative comparative design based on government documents, internationalinstitutional reports, scholarly literature, official statistics, and researcher-collected materials. The analysis focuses onmultilateral participation, institutional capacity, niche and normative diplomacy, knowledge and governance innovation,and coalition-building. The study develops the concept of Institutional Conversion Capacity, defined as the ability of astate to transform diplomatic participation, institutional access, knowledge, expertise, normative legitimacy, andinternational networks into sustained agenda-setting, coalition leadership, and policy influence. The findings suggest thatNepal possesses substantial diplomatic assets, including long-standing multilateral engagement, a major UN peacekeepingcontribution, participation in developing-country coalitions, a distinctive Himalayan identity, and growing climatediplomacy. Nepal also currently serves as President of the UN Economic and Social Council for 2025–2026 and isscheduled to graduate from the least developed country category in 2026. However, significant institutional constraintslimit conversion of these assets into sustained influence. Fragmented institutional responsibilities, weak inter-agencycoordination, limited technical specialization, policy inconsistency, bureaucratic inefficiency, and insufficient public–private collaboration have particularly constrained economic diplomacy. Comparative evidence indicates that Bhutandemonstrates normative entrepreneurship, Rwanda illustrates institutional and governance innovation, and Costa Ricademonstrates the strategic use of environmental diplomacy and international reputation. The study argues that Nepalshould not copy these models but adapt their mechanisms. It proposes a Himalayan Global Governance Innovation Modelcentred on climate and mountain diplomacy, knowledge diplomacy, peacekeeping and peacebuilding, post LDC economicdiplomacy, digital and AI governance, strategic coalition-building, and domestic institutional reform. The study concludesthat Nepal’s future objective should not be to compete with major powers in material capabilities but to become a highlyeffective small state capable of converting distinctive national resources into international agenda-setting and policyinfluence.