Geopolitics and Shifts in Development Aid Policies: The Effects on Poverty in Nepal

Abstract

Current debates on global poverty reduction have renewed scholarly interest in foreign aid. As a result of recent concerns over global security, donors and aid agencies have redirected aid funding to countries of strategic political interest. To comply with the political agendas of the North, major aid donors (such as USAID, CIDA, and the EU) have shifted their priorities from humanitarianism and sustainable development to freedom and international security. Such shifts undermine interventions critical to easing widening socioeconomic disparities, and poor countries like Nepal have experienced a significant decline in international development aid. This paper explores the implications of current aid policy on the division between Northern and Southern countries. The use of a multidisciplinary approach in the analysis of development aid policies is beneficial for understanding the complexities and tensions involved in the provision and distribution of development aid.

Market-Based Aid and Economic Reform

“…They were controlled and dominated by donors and small controlling elites in recipient states with vested interest. This contributed to their failures as the masses in recipient states found it difficult to embrace this new idea (Ayittey, 2012;Kieh, 2008;Vasquez, 1998;Alesina and Dollar, 1998;Tamang, 2009;Milner and Tingley, 2013;Stiglitz, 2000Stiglitz, , 2004.…”

“…This is paramount because as SSA states are allowed to take or are given more ownership of market reforms it will have a positive effect on macroeconomic performance (Hezel, 2009;Harrison, 2006;Milner and Tingley, 2013;Tamang, 2009).…”