Leveraging Federalism: Economic Growth and Doing Business for Prosperity is an attempt to provide for a dialogue exploring the economic angle of the federal debate. The report has been divided into two parts – Part 1 takes a look specifically at Federal Nepal and explores the economic history, political developments, constitutional evolution, economic capacities and the characteristics of the federal structure of Nepal. This background study provides the foundational base which helps decipher the nature and scope of different federal principles seen in Nepal. Furthermore, it also explores the future developmental plans that Nepal is heading towards and the resultant effects they would have on the Nepalese federation. Part 2 discusses the existing literature available exploring the subject of economic governance under the new structure. Targeted focus has been given to the doing business component with a further exploratory study in regulatory aspect of banking and financial institutions, labour markets and business corporations, and sectoral review of agriculture and tourism.