Policy Transfer

Aid Conditionality for Reform: Effects on Country- ownership in Nepal

Donors have applied several models of conditionality for inducing policy reforms and institutional development in developing countries. This paper reviews the conditionality of policy-based lending (or structural adjustment) programs of Bretton Woods Institutions (BWIs)—the World Bank and IMF. They are the largest providers of policy- based lending for supporting member countries’ adjustment programs. The contents of the review section include: understanding conditionality; adjustment lending as a policy tool; criticism of traditional conditionality; new approaches to conditionality; and improving country-ownership. The present study examines the effects of aid conditionality on the country-ownership aspect of governance in Nepal. The survey data reveal that all the governance-related conditionalities have been positively affecting for improving the country-ownership in Nepal. It was also identified that there is no correlation between the level of the enforcement of aid-conditionality and its effects on the country-ownership in donor-funded activities.
Laxmi Kant Paudel's picture

The Privatization Policy Transfer: A Nepalese Experience

After three decades of state intervention throughout the world the 1980s and 1990s have seen a marked reversal in economic policies. Instead of government intervention, control and centralized planning, there has been a renewed and invigorating emphasis on a market oriented strategy. Privatization constitutes one of the cornerstones of that strategy. During the 1980’s there was a remarkable change in Nepalese economic policy, thereby, liberalizing its economy to facilitate the private sector and a competitive market system. The new initiative- from the commanding heights of the states to market forces- is entirely based on the external inducement by the IMF and the World Bank. This change culminated in the early 1990s when the Koirala government published a white paper ‘Policy Paper on the Privatization of Public Enterprises’ (1991), which clearly aimed to introduce a balanced approach between the public sector and private sector. To accelerate the process the government has also made various reforms on the registration and licensing, pricing and subsidies, financial markets etc. The main motive of this paper is to explain that the move towards privatization, in the Nepalese context, is a case of policy transfer. This paper tries to explain the causes of the occurrences of policy transfer, who transferred and what was transferred.
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