Any government inheriting such immense challenges with so slender a mandate was probably doomed to disappoint, and the first Nepali Congress government's honeymoon was short-lived. Prime Minister Girija Prasad Koirala, brother of the late B. P. Koirala, Nepal's first democratically elected prime minister, lost little time not only in attracting the enmity of the opposition Communists but also alienating many in his own party.

Antagonism between the Indian-sponsored Congress Party and the Communists, who looked to China as their only remaining ideological mentor, produced strong political polarities on almost every issue. For example, Congress supported the cause of Tibetan refugees in a way that the panchaayat regime never did, which the Communists viewed as provocative to China. Yet the Communists certainly spoke for many Nepalis when they accused Congress leaders of selling out Nepal's interests to India. This frustration coalesced into a long squabble over the Tanakpur project - a $65 million hydroelectric diversion built by India on the Mahakali River, which forms the western border between the two countries - in which the government was accused of signing away most of Nepal's rights to the water and power generated from the river.

Unemployment, unrest, Indianization and political infighting produced widespread disillusion, forcing Koirala to step down in 1994. The ensuing election produced a hung parliament, with the Communist Party of Nepal-United Marxist-Leninist (CPN-UML) , the largest of several communist parties, stepping forward to form a minority government. Among supporters, Asia's first democratically elected Communist government kindled much idealism, but lacking a parliamentary majority, CPN-UML leader Manmohan Adhikari could only pursue a modest programme of reform.

The Communists' leadership came to an abrupt end after only nine months, when in 1995 the Supreme Court nullified the earlier election results and reinstated the previous parliament. This controversial decision, in which the Court interpreted the Constitution as barring the prime minister from calling midterm polls, was to have a crippling effect on the functioning of the Nepalese state: in effect, it saddled the country with a hung parliament and prevented the voters from doing anything about it until the next scheduled election. This set in train five years of political chaos, with no fewer than six governments attempting to cobble together coalitions in every combination: left, centre-right, left-right and centre-left.

A Nepali Congress-led government, headed by Sher Bahadur Deuba, lasted eighteen months with a slim majority before falling in early 1997. The Rastriya Prajanatantra Party (RPP) , a rightist group comprised mainly of Panchaayat-era veterans, presided over the two short-lived governments that followed. However, the RPP proceeded to self-destruct in early 1998, provoking a constitutional crisis and causing power to return to the Nepali Congress Party under G. P. Koirala. As if things weren't unstable enough, the CPN-UML then split in two, adding further fragmentation and acrimony. That opened the door for the Nepali Congress to take on the breakaway CPN-ML as its minority partner, but the bitter rivalry between the CPN-ML and the UML opposition created paralysis. By the end of 1998, the ML had pulled out of the coalition, and the Nepali Congress, seeing the writing on the wall, formed a caretaker government with essentially no role but to conduct fresh elections the following May.

These political upheavals took a toll on Nepal and its already lagging development. Preoccupied by short-term concerns and petty crises, successive governments were in no position to take decisive action or follow through on earlier plans. Nepalis looked on helplessly as their unaccountable leaders engaged in unseemly squabbles, forged Machiavellian alliances and lined their pockets at the public's expense. Corruption and cronyism became institutionalized as political parties relied on kickbacks to support themselves and created elaborate systems of patronage, and as constant political infighting meant that any accusation of wrongdoing could be dismissed as party-political. Frequent changes of government gave politicians a further incentive to grab it while they could. All this caused Nepalis to lose faith in their new democracy. Many concluded that it had merely transferred power from one set of elites to another, and some sought to overthrow the system through armed rebellion. Even the normally apolitical donor community began sending a clear message that foreign aid to Nepal was in jeopardy if the government didn't clean up its act.