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Economics of Nepal: Class note on Poverty Alleviation and Employment (Eco: 539: MA 2nd year) Chakra Khadka

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Department of Economics, Patan Multiple Campus.

20015

EFFORT TOWARDS POVERTY ALLEVIATION
Nepal faces a severe problem of economic stagnation. Difficult topography and the difficult
natural environment are obstacles to development. The country has a high rate of population
growth, extremely low agricultural productivity, and weak agricultural support. Natural resources,
except water, are almost nonexistent, or their degree of exploitation is low. Rural economic
activity, also at a very low level, is not changing. Some of the factors responsible for economic
stagnation are beyond Nepal's control. The initial period of Nepal's planned development had
infrastructure and institution-building as major objectives. Investments to establish the basic
infrastructure is not fully reflected in growth terms. However, that policy can influence economic
growth in many ways, and the task is to exploit as many as possible of these policies for the
economic well-being of the Nepalese. (Sharma, Asian Survey, Vol. 26, No. 8, Aug., 1986), pp.
897-908.
Poverty measurement and analysis, inequality which kills social welfare, Monitoring and
evaluation, development targets and costs, strengthening statistical systems, public spending,
participation,
governance,
community-driven development,
gender,
environment,
macroeconomic issues , trade policy, rural poverty, urban poverty, Social protection, health,
nutrition and population, education, energy, transport, Water and sanitation, information and
communication technology, utilization of mining is the other side’s problems Nepalese economy (A
sourcebook for poverty reduction strategies, World Bank, 2005).
But, our country is experiencing a type of republic banana. Out of them principally there are
three central problems in Nepalese economy which dominated national economy and they are the
fundamental challenges for economic development:
1. Poverty
2. Inequality
3. Unemployment
Poverty
Subjective Measures of Poverty
Subjective perceptions can be used to measure poverty. Such measures of poverty are based on
questions to households about (a) their perceived situation, such as, “Do you have enough?” “Do
you consider your income to be very low, rather low, sufficient, rather high, or high?” (b) A
judgment about minimum standards and needs, such as, “What is the minimum amount necessary
for a family of two adults and three children to get by?” or “What is the minimum necessary for
your family?” or (c) poverty rankings in the community, such as “Which groups are most vulnerable
in the village?” On the basis of the answers to these questions, poverty lines can be derived.
Answers to the second group of questions could provide a line for different types of reference
households, and answers to the first group of questions can be compared with actual income to
infer the income level that households judge to be sufficient. This income level could then be used
as the poverty line. Subjective measures can be used not only to assess the situation of a
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the food-energy intake method defines the poverty line by finding the consumption expenditures or income level at which a person’s typical food energy intake is just sufficient to meet a predetermined food-energy requirement. political and academic whose understanding is distorted by subject specific views of reductionist science. As discussed in Ravallion and Bidani (1994) and Wodon (1997a).Economics of Nepal: Class note on Poverty Alleviation and Employment (Eco: 539: MA 2nd year) Chakra Khadka. however. This might be the case in discrimination against girls or other particular groups in society. Department of Economics. Methods of Setting Absolute Poverty Lines Different methods have been used in the literature to define absolute poverty lines (see Deaton 1997. The choice of method can greatly affect poverty measures and who is considered poor. equivalence scales. For comparisons over time. 2|Page . the observed perceptions of poverty need not provide a good basis to establish priority public actions. the stability and consistency of the poverty line need to be ensured. ecological cultural. the underlying food consumption pattern of the population group consuming only the necessary nutrient amounts will vary. Subjective measures might reproduce existing discrimination or exclusion patterns if these patterns are perceived as normal in the society. The linkage (nexus) of production relation of poverty: Production is conducted within a network of discursive and non discursive relations technical. and regional cost-of-living differences. If applied to different regions within the same country. economies of scale. More generally. with one household above and another below the line. This method can thus yield differentials in poverty lines in excess of the cost-of-living differential facing the poor. where an explicit bundle of foods typically consumed by the poor is first valued at local prices. which should be addressed by public policy. however. and Wodon 1997a). social. Ordinal ranking of welfare crucial for the poverty profile is more important than cardinal ranking. Subjective assessments could then fail to capture discrimination. 20015 particular household but also to set or inform the choice of poverty lines. Ravallion and Bidani 1994. It is important to derive poverty lines that provide consistency in welfare measurement in space and time: two people with the same real consumption should be considered either poor or nonpoor. This may be the case if policymakers have a different time horizon or a different understanding of the determinants of social welfare from the population providing the subjective measures of poverty. Ravallion 1994. An alternative is the cost of basic needs method. Self-reported measures have important limitations. Patan Multiple Campus. It can also be useful to compare subjective and self-reported measures of well-being to objective measures based on observed income and consumption data.

foreign loan. infrastructure is poor. noise accompany production and the growth of GDP. Department of Economics. regulator. for example.  Composition and distribution of output: A more unequal distribution which appears to be occurring would have reverse effect. foreign aid.  Per capita output: population is also growing rapidly per person standard of living may be constant or even declining. legislator: [Linguistic corruption. corruption is rampant. social capital. education is inadequate:  Poor product quality: Quality improvement clearly affects economic well-being as much as does the quantity of goods.  National income and the environment: Dirty air and water toxic waste. The underground economy: Engage in illegal activities. [change in meaning to a language: Parmanda Jha]. social. (Parliament. Institutional corruption. 3|Page . trade and market [cartel]. 20015 Figure1: The linkage (nexus) of production relation of poverty Academic BIOGENIC DIET Technical HEALTH CARE Ecological END-USE APPROPRIATE ENERGY CLOTH AND HOUSING FUNCTIONAL LITERACY Political Cultural Social Poverty: the experience of many poor countries special reference to Nepal The "Join the Club" view: This view argues that poor economic policies. Patan Multiple Campus. cultural.Economics of Nepal: Class note on Poverty Alleviation and Employment (Eco: 539: MA 2nd year) Chakra Khadka. knowledge [human capital].

[change to data in storage]. Corrupted forget moral principle and is a evil. inability to program foreign aid. The magnitude of this effect is an empirical question. media pollution.  Political corruption. sickness. the market failure argument: In efficiency or absence of well organized commodity. innovation and technical change. Putrefaction [decomposition]). Planned targets are not met. and embezzlement.  It is argued that competitive markets will tend to generate in to socially low priority areas and to disregard the extra benefits to be derived from a planned and co-coordinated long term investment program. Very large in geographical and populated neighbors China and India and an opposite ideology. Department of Economics. and severely limited capacity to administer development-given for the failure of planning. The "Missed the Boat" view: This view accepts the argument of the "Join the Club" views that. malignance. 20015 [policies within an organization that break the law]. as the dysfunction of a political system or institution in which government officials.  Utilization of unskilled manpower. Planning in Nepal has little to do with anything that happens in that country. Special attention is 4|Page . cronyism. private information talent management regulation or brain management. The "Geographic Disadvantage" view: This view accepts the arguments of land lock country. relative command and control. Data corruption. nepotism. Factor and capital markets is said to reduce considerably the ability to economic system to function effectively without some form of external interference. indirect repercussions and long term objectives. Theoretical economic incentives are assumed to promote more innovation and cost reductions in pollution control. political officials or employees seek illegitimate personal gain through actions such as bribery. but rather in the context of external economies. Planning and program can not complete timely because of so many lame excuses. Planned expenditures are not made. few and poor project proposals. Patan Multiple Campus. insufficient information. of the economy which loss of innocence or purity. patronage. to act in a way conducive to efficient production and distribution  Poorly developed in financial institutions  The market is too said lead to a misallocation of present and future resources  The resource mobilization and allocation argument: investment project must be chosen not only on the basis of a partial productivity analysis dictated by individual industrial output ratios. extortion.  The third world economies cannot afford to waste their limited financial and skilled manpower resources on unproductive ventures.  Basic environmental pollution: such as urban air pollution.  Commodity and factor markets are poorly organized  Absence of well organized commodity  Producers and consumers lack of necessary information.  Change their original religion: Hindu to christen. opposition of the finance ministry. graft.Economics of Nepal: Class note on Poverty Alleviation and Employment (Eco: 539: MA 2nd year) Chakra Khadka.

20015 paid to the tortuous release of funds and the effort to overcome basic political and administrative factors through surface changes in the form of organization for planning. dulls the finer feelings. Department of Economics. Marshall stated: We scarcely realize how subtle.] Poverty in Nepal Poverty in Nepal is a deeply entrenched and complex phenomenon. . Definition and Measurement of Poverty The World Bank’s 2000 World Development Report defines poverty as an unacceptable deprivation in human wellbeing that can comprise both physiological and social deprivation.. 298-99. In these areas household food security and poor nutrition are still major concerns. and the average landholding is only 0. Henry George. and shelter. education. lack of autonomy. Small. fragmented subsistence farming is a characteristic of Nepalese agriculture. Despite some progress in poverty reduction in recent years and declining rates of urban poverty. Life is a constant struggle for survival. that cramps the higher nature. George stated: The poverty to which in advancing civilization great masses of men are condemned . and lack of self-respect. The most vulnerable groups are the lowest social castes. vulnerability. The concept of physiological deprivation is thus closely related to. and drives men by its pain to acts which the brutes would refuse. including inadequate nutrition. is a degrading and imbruting slavery. Physiological deprivation involves the non fulfillment of basic material or biological needs. About 30. low monetary income and consumption levels. have large families. and are landless or have very small landholdings. About four fifths of the working population live in rural areas and depend on subsistence farming for their livelihoods. Rural poor people are generally illiterate. (1879) Progress and Poverty. health. Given that different definitions of deprivation often go beyond physiological deprivation and sometimes give greater weight to social deprivation. 125. Patan Multiple Campus. . Social deprivation widens the concept of deprivation to include risk. he may never have conceived how glorious a thing it is to be able to think and to feel about things and with many men. indigenous peoples and women. 3. local populations (including poor communities) should be engaged in the dialogue that leads to the most appropriate definition of poverty in a country.8 hectares. A person can be considered poor if he or she is unable to secure the goods and services to meet these basic material needs. pp. Rural poor people in Nepal include: 5|Page . education. p. clean drinking water and sanitation services.Economics of Nepal: Class note on Poverty Alleviation and Employment (Eco: 539: MA 2nd year) Chakra Khadka.9 percent (World Development Report 2008) of Nepalese live below the poverty line of US$12 per person/per month. all-pervading and powerful may be the effect of the work of man's body in dwarfing the growth of the man . powerlessness. [Henry George.. or what delight in art. Most households have little or no access to primary health care. the poor laborer may live and die without even realizing what a joy there is in knowledge. (1898) the Science of Political Economy. but can extend beyond. the problem remains widespread and most indicators suggest that it is on the rise.

Overall.000 have been internally displaced or made homeless. These areas are also physically isolated.  Civil unrest in the highlands Poverty. In addition. Why are Nepal’s rural people poor? Land ownership in Nepal has traditionally been concentrated in the hands of a few. For most poor rural families access to land is extremely limited. especially in the Terai region. and increasing marginalization has led to political unrest and violence in the highlands of Nepal. the conflict has wreaked havoc on the country’s economic performance. More than 14. such as sick or disabled persons. including overgrazing and deforestation. Because of poor growth in the agricultural sector. 6|Page . remote regions have been kept in isolation. Many areas fell completely under rebel control. Department of Economics. including small farmers who are at risk of slipping deeper into poverty as a result of factors such as conflict. but the process is still in its very early stages. Increasing population pressure has led to unsustainable use of natural resources.000 Nepalese were killed in the conflict and about 600.Economics of Nepal: Class note on Poverty Alleviation and Employment (Eco: 539: MA 2nd year) Chakra Khadka. debt and land degradation. And erosion in the uplands causes flooding in the lowlands that can be devastating to crop yields. Many rural areas have been devastated. which also supports many landless migrants from the hills. Almost 70 percent of households have holdings of less than 1 ha and many of them depend on plots that are too small to meet their subsistence requirements. with poor communications and infrastructure and inadequate access to natural resources. living standards in rural areas are deteriorating and poverty is increasing. abandoned children and displaced persons  Extremely poor people. inputs and extension services. and agriculture has been particularly affected. including illiterate or landless persons or those with very few assets  Moderately poor people. A Maoist rebellion that began in 1996 in the remote hill districts of the Mid-Western region later intensified and spread across large parts of the country. 20015 Destitute people. The rugged terrain and harsh climate do not generate good crop yields. agricultural production has severely declined and business investment has ground to a halt. such as those who have small farms but are often heavily indebted  People who are ‘nearly poor’. steps have been taken to bring the decade-long conflict to an end. Patan Multiple Campus. Fighting has occurred largely in rural areas. The growing population has put huge pressure on cultivable land. Following a ceasefire in April 2006. Productivity levels remain low as a result of limited access to new farming technologies. more than 2 million people are believed to have fled to India (Human right publication 2007). lack of economic growth. Many factors contribute to chronic poverty in Nepal’s steep and mountainous areas.

since a smaller share of resources is obtained by those at the bottom of the distribution of income or 7|Page . landless laborers. Many rural women live in severe poverty. and illiteracy is far more common among women than men. without any means of improving conditions for themselves and their families. telephones. indigenous peoples and women. Excluded groups include smallholder farmers. The recent conflict caused the most productive members of households to leave the villages or to take part in the fighting. and access to health. especially in rural areas. Where are Nepal’s rural poor people? The highest concentration of poor rural people is found in the Mid-Western and Far-Western regions. Agricultural holdings per household are the smallest in the country. Patan Multiple Campus. Insufficient calorie intake can lead to chronic malnutrition in the infants they feed. As a result more and more women have been heading households alone and taking on the burden of sustaining the rural economy. higher inequality implies higher poverty. First.Economics of Nepal: Class note on Poverty Alleviation and Employment (Eco: 539: MA 2nd year) Chakra Khadka. The Terai plains area has good potential for food production but is increasingly overtaxed by the needs of a growing population. this figure increases to 45 per cent in the Mid-Western region and 41 per cent in the Far-Western region (CBS). lower castes. Women constitute more than 60 per cent of the agricultural labor force but have little access to land. In this way the poverty cycle is perpetuated into the next generation. Poor families are often obliged to send their children to work rather than to school. water supply and sanitation services is very limited. Department of Economics. nutrition. Within households women often have less to eat than men. In these remote hill and mountain zones the terrain is rugged. The number of landless and marginalized poor people is rising in the region. rainfall is low and the soil is poor and difficult to farm. The conflict has exacerbated the extreme isolation of these regions. for any given level of economic development or mean income. Most people in the dalit caste work as wage laborers for higher-caste farmers. 20015 Who are Nepal’s rural poor people? Social discrimination plays a significant role in keeping the most disadvantaged people in rural Nepal poor and marginalized. While the overall poverty rate for Nepal is 31 per cent. education. Discrimination on the grounds of caste is officially illegal in Nepal but is in fact widespread. production technology and training. and electricity. roads. Inequality High levels of inequality contribute to high levels of poverty in several ways. or untouchable) are the most disadvantaged group. There is a wide gap between women and men when it comes to access to health. It is estimated that about one quarter of the children in Nepal between four and five years old are engaged in some kind of family or wage labor. Infant mortality is much higher for girls. Members of the lowest caste (dalits. education and participation in decision-making.

        Inequality in health: High rate of infant mortality. therefore.6 44. negative effect on welfare. then whatever the rate of growth. morbidity Inequality in education: Test results.366 consumption and 0. inequality has a direct. negative impact on social welfare. mortality. male and female household heads. 2003: Rural population (million).0 240. 2003: Population living below $1 a day (%)2003/04: Population living below $2 a day (%). access to credit and other resources may be concentrated in the hands of privileged groups.5 % Population living below 2 $per day.1 68. for any given level of income in a country. 2003 Population density (people per km2). 2003: Population living below $1 a day (%)1995/96: Population living below $2 a day (%). The negative impact of inequality on growth may result from various factors. if a single person has all the resources. 24. Second. Inequality in the home: physical violence. Therefore. in less poverty reduction. poverty will never be reduced through growth. Economic inequalities: Nepal Gini coefficient of 1996 was 0. At the extreme. high inequality has a direct. Inequality of human capacities: Appointment in PEOs cronyism rather than competition. There are good reasons to be interested in inequality and social welfare from the perspective of a comprehensive evaluation of public policies and social programs that go beyond their impact on poverty. 1995/96: GNI per capita (USD).5 8|Page . Table: 1: Inequality Statistics of Nepal: Total population (million). Individuals also compare themselves with others. higher initial inequality may result in lower subsequent growth and. education. Inequality of power: top down approach for policy making. 20015 consumption.2 9. 2003/04: 24. Patan Multiple Campus. economic welfare. According to the theory of relative deprivation. sexual violence.7 82. access to teachers.513 incomes.0 37.5 2.0 24.0 44.5 42. 1995/96: GNI per capita (USD). 1995/96: Population living below the national poverty line (%)1995/96: Rural population below the poverty line (%). Inequality of justices: Combating elite capture and discrimination. 4% populations are sharing more than 80% of national income and output. For example. High impact health services.Economics of Nepal: Class note on Poverty Alleviation and Employment (Eco: 539: MA 2nd year) Chakra Khadka. independent of inequality’s impact on poverty. higher levels of inequality may reduce the benefits of growth for the poor because a higher initial inequality may lower the share of the poor’s benefits from growth. rural and urban households. 1% Population living below 1$ per day. Third. project selecting Inequality trap for women: Fewer opportunities in health. tradition violence. Department of Economics. political power which also known gender inequality. We argue that. individuals and households do not assess their levels of welfare in terms of their absolute levels of consumption or income only. and 68. 2003: Number of rural poor (million) (approximate): Rural population below the poverty line (%).0 240.7 21. and quality of education. thereby preventing the poor from investing. household decision.

and disagreement on which is most severe. Monetarism. and will lead to increased employment. Different countries experience different levels of unemployment.9 7. the Nepal currently experiences higher unemployment levels than the other 9|Page . and is currently seeking work. Department of Economics. The rate is determined as the percentage of those in the labor force without jobs. There is disagreement on how to measure unemployment.2)2003/04 30 - (20. Patan Multiple Campus. depending on the cause.9)1995/96 20 10 0 + + + + + + 10 20 30 40 50 60 + + 70 80 + 90 + 100 % of income recipients Unemployment Unemployment is the state in which a person is without work. thinks that controlling inflation to facilitate growth and investment is more important.Economics of Nepal: Class note on Poverty Alleviation and Employment (Eco: 539: MA 2nd year) Chakra Khadka.6 Figure 2: the Lorenz Curve of income inequality statistics of Nepal 100 90 80 - % of income 70 Line of equality 60 50 40 - (25. Different economic theories suggest different measures to limit it and on its importance. 2003/04: Source: WDR 30. for example. 20015 Population living below the national poverty line (%)1995/96: Share of poorest 20% in national income or consumption (%): Rural population below the poverty line (%). There are a variety of different types of unemployment. available to work.6 34.

Dr.Economics of Nepal: Class note on Poverty Alleviation and Employment (Eco: 539: MA 2nd year) Chakra Khadka. Unemployment increases susceptibility to malnutrition. This may pertain to geographical location. This is often ascribed to government intervention. Structural unemployment. Department of Economics.4% more arrests. If such a mismatch exists. Surroundings of unemployment in Nepal       Frictional unemployment occurs when a worker moves from one job to another: imperfect information in the labor market. 1.7% more suicides. Structural unemployment problems: inefficiencies. If the market for goods is a buyers' market. and loss of self-esteem. M.8% more assaults reported to the police. skills. and other regulations that may discourage the hiring of workers. Seasonal unemployment: occurs when an occupation is not in demand at certain seasons. This is caused by a business cycle recession and wages not falling to meet the equilibrium rate. 20015 countries and it also changes over time throughout economic cycles. and many other factors. 10 | P a g e . Patan Multiple Campus. Keynesian unemployment may ensue while a limiting production capacity is more consistent with classical unemployment. Failure to pay mortgage payments or to pay rent may lead to homelessness through foreclosure or eviction. Classical or neoclassical economics view: minimum wage laws. mental stress. leading to depression. frictional unemployment is likely to be more significant as well. Keynesian (Seasonal) unemployment: Cyclical or Keynesian unemployment. as with the minimum wage. Causes of unemployment      Keynesian view: Keynesian economics emphasizes unemployment resulting from insufficient effective demand for goods and service in the economy.7% increase in cardiovascular disease. 0. also known as demand deficient unemployment. inherent in labor markets. illness. taxes. a 1.2% in total mortality. Unemployment in a free market economy: that is the law of supply and demand is not really applied to the price to be paid for employing people. 1.3% more cirrhosis cases. and 0. Structural unemployment: is caused by a mismatch between jobs offered by employers and potential workers. Classical unemployment: Classical or real-wage unemployment occurs when real wages for a job are set above the market-clearing level. Harvey Brenner conducted a study in 1979 on the "Influence of the Social Environment on Psychology. occurs when there is not enough aggregate demand for the labor." Brenner found that for every 10% increase in the number of unemployed there is a 1. Government regulation: in under developing countries like Nepal unemployment is often caused by burdensome Costs of unemployment Unemployed individuals are unable to earn money to meet financial obligations.

Table 3: Distribution of population by broad age groups and dependency ratio.5 Ecological Zone 100 Mountains 39.00 % 183 0.2 21. The percentage of economic active population is 52. lack of financial resources.4 100 88.00 % 189 -10.9 West 39. Society: During a long period of unemployment. Department of Economics.8 7.9 100 11 | P a g e .0 6.9 93.9 23.8 7.3 22.00 % 186 0. 20015 Another cost for the unemployed is that the combination of unemployment. Patan Multiple Campus.Economics of Nepal: Class note on Poverty Alleviation and Employment (Eco: 539: MA 2nd year) Chakra Khadka.8 28.7 Urban/Rural 100 Urban 30.7 83.00 % 2005 47.3 89. workers can lose their skills. Table 2: Unemployment rate of Nepal: 42% (2004 estimated Year Unemployment rate Rank Percent Change 2003 47.8 and economic inactive population is 47.3 62.1 Tarai 40.4 8. Rising unemployment rate concentrates the oligopsony power of employers by increasing competition amongst workers for scarce employment opportunities.1 100 90.00 % 2006 42.0 30.3 Central 39.5 7.2 6.00 % Source: WDR Date of Information 2001 estimated 2001 estimated 2001 estimated 2004 estimated 2004 estimated 2004 estimated Dependent population (age of 0 to 14 and 60 above): Dependency ratio is the ratio of total population in 0-14 and 60+ age groups to total population in 15-59 age group.14 15-59 years 60 years and Tot Dependency Ratio years Male Female older al Census NLSS II s s 2001 Development Region East 37.2 8.6 24.9 29.4 100 79.1 21. Nepal ((Percent) 00 .8 94.7 29.6 24. Being unemployed can also reduce the life expectancy of workers by about 7 years.7 89.4 23.9 8.7 89.4 Hills 38. and social responsibilities may push unemployed workers to take jobs that do not fit their skills or allow them to use their talents.00 % 9 2004 47.2 Mid West 41.5 29.9 24.2 31.7 30.7 100 84.00 % 2008 42.8 100 81.6 27.0 100 93.2 percentages.4 100 84.0 9.7 89.0 89.00 % 184 0.5 63. causing a loss of human capital.2 Far West 43.8 94.00 % 10 0.7 6.1 88. Unemployment can cause underemployment.2 28.7 6. High unemployment can encourage xenophobia and protectionism as workers fear that foreigners are stealing their jobs.3 28.64 % 2007 42.2 24.7 Rural 41.8 27.

Economics of Nepal: Class note on Poverty Alleviation and Employment (Eco: 539: MA 2nd year) Chakra Khadka. Department of Economics. 12 | P a g e . 20015 Nepal CBS.6 23.9 7. Nepal 2004 89.2 39. inequality and unemployment Normative economic statements express a subjective opinion and involve our value judgments about how things should be. reference to the facts is conspicuously absent. Each of these statements deals with what we think should be and with making judgments about the rightness or wrongness of various aspects of the economy. “Government should do more to help eliminate poverty” is a normative economic statement. Patan Multiple Campus.9 28. With normative economic statements.6 100 84.7 Normative and positive economics of poverty.

Economics of Nepal: Class note on Poverty Alleviation and Employment (Eco: 539: MA 2nd year) Chakra Khadka..being National income is reasonably accurate and extremely useful measure of domestic economic performance. Machinery …. an index of society’s overall well-being its 13 | P a g e . It is not. and was never intended to be.. National income and economic well. object and thesis (discourses) are mutually constituted OBJECT SUBJECT THESIS ACADEMIC T E P C S Figure 3: Significant view of poverty as an alternative to the poverty sector approach FOOD Health Housing Energy Clothing Transport Literacy …... Department of Economics. FERTILIZER Water CHEMICAL Seeds Organic Pesticides …. …. Patan Multiple Campus. 20015 Academic relation of poverty where subject.

tax abuse. generating rural and urban capital formation. project selection. such as reduction of crime and violence. invest in human capital. formulate bottom up approach for policy making. and why more output will not necessarily make society better off.Economics of Nepal: Class note on Poverty Alleviation and Employment (Eco: 539: MA 2nd year) Chakra Khadka. sexual violence. that is greater production should move society towards” the good life”. diversify the rural economic activities. sex and alcohol abuse. develop the financial institution. control rural urban migration. 20015 total satisfaction. economic welfare. Patan Multiple Campus. Government can play promotional roles for economic development in Nepalese economy through: 1. improved racial harmony. National income is merely a measure of the annual volume of goods and services produced. appoint in PEOs with a higher competition . correct monetary policy and fiscal policy. Adjustment macroeconomic disequilibrium: Mobilize the unemployed labor force. choose the reasonable development and planning theory. stop combating elite capture and discrimination. reduce economic inequalities and redistribute of national income and output. Many things could make a country better off without necessary raising National income. provide equal of justices. education. more opportunities in health. control the corruption. proper utilize the foreign aid and foreign investment. greater equality of opportunity. 3. 14 | P a g e . tradition violence. improve health nutrition and education for the poor. External and internal macroeconomic checks: Reset the trade and development policy. decentralized rural planning. control physical violence. Thus we must understand some of the shortcomings of National income why it might understate or overstate real output. Nevertheless it is widely held that there should be a strong positive correlation between real National income and economic well-being. Department of Economics. 2. providing essential social services to all rural people. political power which also known gender inequality. provide subsidy for deprive group. correction of balance of payments. better understanding between parents and children and reductions of drug. harmonized with private sector as a partner of development. set the priority and objectives of the planning. household decision. Stimulate needed social and economic changes rather than political shocks: The most important is the political commitments.

Population Census 2001: National Report. Kathmandu. National Sample Census of Agriculture Nepal 2001/02. Volume One. New York: Oxford University Press. Volume Two. Children and Households: Between Census Household Information. Nepal. Department of Economics. Monitoring and Evaluation System (BCHIMES). Nepal Demographic Health Survey 2001. Nepal Living Standards Survey Report 1996: Main Findings. Kathmandu.2)2003/04 50 30 20 10 - X1 + t-2 + t-1 + + + t0 t+1 t+2 -10 - + t+3 + + t+4 t+5 + X t+n Time Line -20 -30 Y1 References Central Bureau of Statistics. Nepal. 15 | P a g e . 2003. 2001. Kathmandu. Kathmandu. Kathmandu. Nepal. Kathmandu. Nepal. Volume Two. World Development Report 1990: Poverty. Reports on the Situation of Women.Economics of Nepal: Class note on Poverty Alleviation and Employment (Eco: 539: MA 2nd year) Chakra Khadka. Volume One. Nepal Living Standards Survey Report 1996: Main Findings. 2003. 1996. Nepal. 1990. Nepal. World Bank. Central Bureau of Statistics. Population Monograph of Nepal. Central Bureau of Statistics. Central Bureau of Statistics with UNFPA. Ministry of Health (Nepal). 2004. 1996. Kathmandu. Kathmandu. Patan Multiple Campus. Nepal. and ORC Micro. World Development Report 1980. Central Bureau of Statistics. 2002. Population Monograph of Nepal. World Bank. Central Bureau of Statistics (Nepal) with UNICEF. 20015 Figure 5: Effect of economic growth with political shock and stimulate. New ERA. Central Bureau of Statistics. Economic growth 40 Y - (25. New York: Oxford University Press. 2002. Nepal. 1980.

2000c.Washington. Washington. 16 | P a g e . 1997c. New York: Oxford University Press. DC: World Bank. Washington. Patan Multiple Campus. World Bank. World Bank Policy Research Report 1993. Coverage: The Scope of Protection in Retirement Incomes. World Bank. The East Asian Miracle: Economic Growth and Public Policy.Economics of Nepal: Class note on Poverty Alleviation and Employment (Eco: 539: MA 2nd year) Chakra Khadka. World Bank. Department of Economics. 2001b. Equity and Development. Washington. 1997b. 20015 World Bank. World Development Report 1994: Infrastructure for Development. Sharing Rising Incomes: Disparities in China. DC: World Bank Pension Reform Prime Note. New York: Oxford University Press. World Bank. Social Protection Unit. DC: World Bank. 1993. World Bank. 2006. World Development Report 1997: The State in a Changing World. 1994. Making Transition Work for Everyone: Poverty and Inequality in Europe and Central Asia. DC:World Bank. New York: Oxford University Press.