"total crop yield in Nepal is frequently higher around small primitive dams built from stone, mud and trees and managed locally, than near large concrete and steel dams where irrigation users have little incentive to concern themselves with necessary dam maintenance."
The battle between China and India for regional influence will potentially benefit Nepal. A positive externality (for Nepal) from competing economic policies for regional influence by two emerging giants.
Indian Railways has chalked out a comprehensive plan to build rail links with Nepal and Bhutan in an apparent bid to counter the recent Chinese move to build rail links in South Asia. China is building a 1,956-kilometer rail route connecting Qinghai province and Tibet with Kathmandu across the Tibetan plateau.
China is also planning to build an internal railway network in Nepal linking it to Pakistan via the Karakoram Highway and Bangladesh via Myanmar. Indian Railways proposes to build six rail links with Nepal and three with Bhutan on a priority basis. Recently, the railways has mooted a proposal to link India directly with Nepal to achieve its all-round development and enhance connectivity between the two neighboring countries.
This year’s Nobel Prize in economics went to Elinor Ostrom (the first woman to win the prize in economics) and Oliver Williamson for their work in economic governance.
Economic transactions take place not only in markets, but also within firms, associations, households, and agencies. Whereas economic theory has comprehensively illuminated the virtues and limitations of markets, it has traditionally paid less attention to other institutional arrangements. The research of Elinor Ostrom and Oliver Williamson demonstrates that economic analysis can shed light on most forms of social organization.
Elinor Ostrom has challenged the conventional wisdom that common property is poorly managed and should be either regulated by central authorities or privatized. Based on numerous studies of user-managed fish stocks, pastures, woods, lakes, and groundwater basins, Ostrom concludes that the outcomes are, more often than not, better than predicted by standard theories. She observes that resource users frequently develop sophisticated mechanisms for decision-making and rule enforcement to handle conflicts of interest, and she characterizes the rules that promote successful outcomes.
Oliver Williamson has argued that markets and hierarchical organizations, such as firms, represent alternative governance structures which differ in their approaches to resolving conflicts of interest. The drawback of markets is that they often entail haggling and disagreement. The drawback of firms is that authority, which mitigates contention, can be abused. Competitive markets work relatively well because buyers and sellers can turn to other trading partners in case of dissent. But when market competition is limited, firms are better suited for conflict resolution than markets. A key prediction of Williamson's theory, which has also been supported empirically, is therefore that the propensity of economic agents to conduct their transactions inside the boundaries of a firm increases along with the relationship-specific features of their assets.
Economists react:
Paul Krugman says its “an institutional economics prize”
also, here
The IPC has published a collection of its popular One Pagers as a book. Very insightful and interesting short papers. Link here.
Very Keynesian:
Self-interest is still the best motivator we know – or more accurately, the only consistent motivator. So I’m for market economies. But I’m for market economies with strong safety nets, with adult supervision in capital markets, with public provision of goods the private sector does badly (like basic research and much of education.) An idealized New Deal is about as far as I go.
The UNDP has published Human Development Report 2009, an annual publication that ranks countries based on the level of human development (HDI). This year’s topic is Overcoming barriers: Human mobility and development, which explores how better policies towards labor mobility can enhance human development. With Human Development Index (HDI), the development agency ranks countries based on the progress made in human development.The HDI provides a composite measure of three dimensions of human development: living a long and healthy life (measured by life expectancy), being educated (measured by adult literacy and gross enrolment in education) and having a decent standard of living (measured by purchasing power parity, PPP, income).
The HDI value for Nepal is 0.553, placing it in 144 position out of 182 countries included in the study. The higher the index value, the better is human development in a given country. The report notes that between 1980 and 2007 Nepal's HDI rose by 2.16% annually from 0.309 to 0.553 today. HDI scores in all regions have increased progressively over the years although all have experienced periods of slower growth or even reversals.
| Nepal’s human development index 2007 | ||||
| HDI value | Life expectancy at birth (years) | Adult literacy rate (% ages 15 and above) | Combined gross enrolment ratio (%) | GDP per capita (PPP US$) |
| 1. Norway (0.971) | 1. Japan (82.7) | 1. Georgia (100.0) | 1. Australia (114.2) | 1. Liechtenstein (85,382) |
| 142. Swaziland (0.572) | 113. Guyana (66.5) | 128. Yemen (58.9) | 134. India (61.0) | 163. Uganda (1,059) |
| 143. Angola (0.564) | 114. Tajikistan (66.4) | 129. Papua New Guinea (57.8) | 135. Morocco (61.0) | 164. Afghanistan (1,054) |
| 144. Nepal (0.553) | 115. Nepal (66.3) | 130. Nepal (56.5) | 136. Nepal (60.8) | 165. Nepal (1,049) |
| 145. Madagascar (0.543) | 116. Mongolia (66.2) | 131. Mauritania (55.8) | 137. Swaziland (60.1) | 166. Madagascar (932) |
| 146. Bangladesh (0.543) | 117. Pakistan (66.2) | 132. Morocco (55.6) | 138. Kenya (59.6) | 167. Myanmar (904) |
| 182. Niger (0.340) | 176. Afghanistan (43.6) | 151. Mali (26.2) | 177. Djibouti (25.5) | 181. Congo (Democratic Republic of the) (298) |
The HDI is a broader measure of well being, as opposed to using GDP figures. This is how Nepal stands in HDI and GDP per capita.
In Human Poverty Index (HPI), Nepal ranks 99th among 135 countries for which the index has been prepared.
| Selected indicators of human poverty for Nepal | ||||
| Human Poverty Index (HPI-1) | Probability of not surviving to age 40 (%) | Adult illiteracy rate (%ages 15 and above) | People not using an improved water source (%) | Children underweight for age (% aged under 5) |
| 1. Czech Republic (1.5) | 1. Hong Kong, China (SAR) (1.4) | 1. Georgia (0.0) | 1. Barbados (0) | 1. Croatia (1) |
| 97. Haiti (31.5) | 88. Uzbekistan (10.7) | 128. Yemen (41.1) | 71. Venezuela (Bolivarian Republic of) (10) | 125. Pakistan (38) |
| 98. Equatorial Guinea (31.9) | 89. El Salvador (10.7) | 129. Papua New Guinea (42.2) | 72. Occupied Palestinian Territories (11) | 126. Ethiopia (38) |
| 99. Nepal (32.1) | 90. Nepal (11.0) | 130. Nepal (43.5) | 73. Nepal (11) | 127. Nepal (39) |
| 100. Rwanda (32.9) | 91. Kazakhstan (11.2) | 131. Mauritania (44.2) | 74. Kyrgyzstan (11) | 128. Burundi (39) |
| 101. Pakistan (33.4) | 92. Guatemala (11.2) | 132. Morocco (44.4) | 75. Syrian Arab Republic (11) | 129. Afghanistan (39) |
| 135. Afghanistan (59.8) | 153. Lesotho (47.4) | 151. Mali (73.8) | 150. Afghanistan (78) | 138. Bangladesh (48) |
In Gender-related Development Index (GDI), Nepal scored a value of 0.545. Its GDI value is 98.6% of its HDI value. Out of the 155 countries with both HDI and GDI values, 111 countries have a better ratio than Nepal's. Meanwhile, Nepal ranks 83rd out of 109 countries in Gender Empowerment Measure (GEM), which reveals whether women take an active part in economic and political life.
| The GDI compared to the HDI – a measure of gender disparity | |||
| GDI as % of HDI | Life expectancy at birth (years) 2004 | Adult literacy rate (% ages 15 and older) 2004 | Combined primary, secondary and tertiary gross enrolment ratio 2004 |
| | Female as % male | Female as % male | Female as % male |
| 1. Mongolia (100.0%) | 1. Russian Federation (121.7%) | 1. Lesotho (122.5%) | 1. Cuba (121.0%) |
| 110. Algeria (98.4%) | 183. Nigeria (102.1%) | 128. Senegal (63.1%) | 137. Guatemala (92.6%) |
| 111. Iran (Islamic Republic of) (98.4%) | 184. Uganda (102.0%) | 129. Morocco (62.9%) | 138. Zambia (92.0%) |
| 112. Nepal (98.4%) | 185. Nepal (101.9%) | 130. Nepal (62.0%) | 139. Nepal (91.6%) |
| 113. Honduras (98.4%) | 186. Kenya (101.5%) | 131. Bhutan (59.5%) | 140. Senegal (90.0%) |
| 114. Burkina Faso (98.4%) | 187. Pakistan (101.0%) | 132. Burkina Faso (58.8%) | 141. Sudan (89.3%) |
| 155. Afghanistan (88.0%) | 190. Swaziland (98.0%) | 145. Afghanistan (29.2%) | 175. Afghanistan (55.6%) |
Nepal has an emigration rate of 3.9%. The major continent of destination for migrants from Nepal is Asia with 95.0% of emigrants living there. In 2007, US$1,734 million in remittances were sent to Nepal. Average remittances per person were US$61, compared with the average for South Asia of US$33.
| Remittances | |||
| Total remittance inflows (US$ millions) | Remittances per capita (US$) | ||
| 1. India | 35,262 | 1. Luxembourg | 3,355 |
| 1. India | 35,262 | 67. Sri Lanka | 131 |
| 17. Pakistan | 5,998 | ||
| 36. Sri Lanka | 2,527 | ||
| 45. Nepal | 1,734 | 91. Nepal | 61 |
| 63. Iran (Islamic Republic of) | 1,115 | 98. Bangladesh | 41 |
| 151. Maldives | 3 | 102. Pakistan | 37 |
| 133. Maldives | 10 | ||
| 157. Burundi | 0 | 157. Burundi | 0 |
| Global aggregates | |||
| South Asia | 53,201 | South Asia | 33 |
| Least developed countries | 17,293 | Least developed countries | 26 |
| Medium human development | 189,093 | Medium human development | 44 |
| World | 370,765 | World | 58 |
If the political process continues to be as messy as it is today, then once again the human development goals would be overshadowed and progress on these fronts stalled. As of today, stalemate in finding a solution to the political impasse has been the most binding constraint to forging a national strategy to make progress in human development fronts.