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Economic Inequality in the ‘Democratic’ Nepal: Dimensions and Implications
Unformatted Document Text:  24 with the HCH’s. In case of the MCH’s, LCH’s, and Muslims, on the other hand, the degree of vertical inequality does not appear to have changed much over time, an indication that even the best or worst performers have not deviated much from the average performance. The spatial face of inequality is also evident as suggested by the increasing disparities in access to resources along the lines of urban/rural, region, and ecological distinction. While both urban and rural areas experienced growth in access to resources over time, urban areas were far ahead of rural areas on both the averages and the amount of growth in almost every resource category. This is an indication that the oft-cited concept of ‘urban bias’ (Lipton 1976) is increasingly becoming a reality in Nepal. Rural areas realized a negative growth in agriculture and home or in kind production, the two sources in which they have comparative advantage. Because the liberalization policies of the 1990s favored manufacturing industries, the urban-rural gap further widened as evidenced in the deteriorating relative position of the income from employment and business (Deraniyagala 2005; Karmacharya 2001; Khadka 1998; Rankin 2003, 2004; Sharma 2006). This is quite consistent with the relatively poor performance of rural areas with their human development index almost 0.13 points lower than that in urban areas and human poverty index almost 17 points higher than that in urban areas (UNDP 2004). One resource on which rural areas gained relative to urban areas is wealth as the value of real estate and houses declined in the latter where as it increased in the former. The within group inequality too remained almost the same in rural areas where as it increased in urban areas, especially on unadjusted income, indicating that not all in urban areas were able to gain from the positive change in access to resources. Development regions and ecological belts also differ in access to resources. The Center region and Hills belt situating the nation’s capital enjoy the most extensive access. The West and Terai

Authors: Wagle, Udaya.
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with the HCH’s. In case of the MCH’s, LCH’s, and Muslims, on the other hand, the degree of
vertical inequality does not appear to have changed much over time, an indication that even the
best or worst performers have not deviated much from the average performance.
The spatial face of inequality is also evident as suggested by the increasing disparities in access
to resources along the lines of urban/rural, region, and ecological distinction. While both urban
and rural areas experienced growth in access to resources over time, urban areas were far ahead
of rural areas on both the averages and the amount of growth in almost every resource category.
This is an indication that the oft-cited concept of ‘urban bias’ (Lipton 1976) is increasingly
becoming a reality in Nepal. Rural areas realized a negative growth in agriculture and home or in
kind production, the two sources in which they have comparative advantage. Because the
liberalization policies of the 1990s favored manufacturing industries, the urban-rural gap further
widened as evidenced in the deteriorating relative position of the income from employment and
business (Deraniyagala 2005; Karmacharya 2001; Khadka 1998; Rankin 2003, 2004; Sharma
2006). This is quite consistent with the relatively poor performance of rural areas with their
human development index almost 0.13 points lower than that in urban areas and human poverty
index almost 17 points higher than that in urban areas (UNDP 2004). One resource on which
rural areas gained relative to urban areas is wealth as the value of real estate and houses declined
in the latter where as it increased in the former. The within group inequality too remained almost
the same in rural areas where as it increased in urban areas, especially on unadjusted income,
indicating that not all in urban areas were able to gain from the positive change in access to
resources.
Development regions and ecological belts also differ in access to resources. The Center region
and Hills belt situating the nation’s capital enjoy the most extensive access. The West and Terai


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