Foreign aid policy and its growth effect in Nepal

Abstract

Donors are perplexed, as aid has been unable to reinforce growth in many underdeveloped countries. In this paper, specific attention has been diverted towards various issues pertinent to the aid-growth relationship; in particular, we discuss Nepal due to its uniqueness. A general conclusion is that donors should conduct more research to country-specific problems and attributes, such as the sociocultural factors before they disburse any kind of aid. In case of Nepal, the country would be better off if the donors assume exclusive control over the project and work directly with the local bodies, NGOs or other consulting companies, rather than the government.