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Economic Inequality in the ‘Democratic’ Nepal: Dimensions and Implications
Unformatted Document Text:  26 society. Their political and social consequences are partly what is happening in Nepal today. The main agenda of the Maoists has consistently been rising inequality, which has led to their dominant role in the national politics (Deraniyagala 2005; Hachhethu 2004; Khadka 1998; Murshad and Gates 2005; Lawoti 2005; Pfaff-Czarnecka 2004; Ganguly and Shoup 2005). Economic inequality provides domestic privilege to those who are in power so that it can be perpetuated in society (Pieterse 2002). This is further justified given that inequality can effectively prevent the poor from being well educated, thus further retarding democratization (Pieterse 2002). Yet, what is currently happening in Nepal appears to be consistent with the thesis that inequality especially when it results from economic transformation such as industrialization likely increases social unrest and induces democratization (Acemoglu and Robinson 2000; Alesina and Perrotti 1996). The spatial and especially horizontal form of inequality can have important implications for the political stability of a country since the oppressed groups often incite social unrest in order to institute democratic processes and achieve an equal footing (Acemoglu and Robinson 2000; Hachhethu 2004; Sharma 2006). At the same time, however, the social unrest, ethnic strife, and class struggle triggered by these inequality outcomes also pose a danger of breaking the national unity apart and thus collapsing the state (Ganguly and Shoup 2005), an increasingly harsh reality the government and political leaders in Nepal are currently grappling with. Economic inequality has enormous implications for the government policies that have not secured successful implementation in the past. Discrimination based on gender, caste, ethnicity, religion, and other socio-demographic identifies, for example, is outlawed by the Constitution of Nepal and yet continues to take place in the homes, workplaces, and communities. Policies designed to foster the lower castes, Janjatis, and other minorities have not been either adequately

Authors: Wagle, Udaya.
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society. Their political and social consequences are partly what is happening in Nepal today. The
main agenda of the Maoists has consistently been rising inequality, which has led to their
dominant role in the national politics (Deraniyagala 2005; Hachhethu 2004; Khadka 1998;
Murshad and Gates 2005; Lawoti 2005; Pfaff-Czarnecka 2004; Ganguly and Shoup 2005).
Economic inequality provides domestic privilege to those who are in power so that it can be
perpetuated in society (Pieterse 2002). This is further justified given that inequality can
effectively prevent the poor from being well educated, thus further retarding democratization
(Pieterse 2002). Yet, what is currently happening in Nepal appears to be consistent with the
thesis that inequality especially when it results from economic transformation such as
industrialization likely increases social unrest and induces democratization (Acemoglu and
Robinson 2000; Alesina and Perrotti 1996). The spatial and especially horizontal form of
inequality can have important implications for the political stability of a country since the
oppressed groups often incite social unrest in order to institute democratic processes and achieve
an equal footing (Acemoglu and Robinson 2000; Hachhethu 2004; Sharma 2006). At the same
time, however, the social unrest, ethnic strife, and class struggle triggered by these inequality
outcomes also pose a danger of breaking the national unity apart and thus collapsing the state
(Ganguly and Shoup 2005), an increasingly harsh reality the government and political leaders in
Nepal are currently grappling with.
Economic inequality has enormous implications for the government policies that have not
secured successful implementation in the past. Discrimination based on gender, caste, ethnicity,
religion, and other socio-demographic identifies, for example, is outlawed by the Constitution of
Nepal and yet continues to take place in the homes, workplaces, and communities. Policies
designed to foster the lower castes, Janjatis, and other minorities have not been either adequately


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