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Economic Inequality in the ‘Democratic’ Nepal: Dimensions and Implications
Unformatted Document Text:  4 a highly disadvantaged position (Deraniyagala 2005; Murshed and Gates 2005; Sharma 2006). This unequal treatment of the different castes and ethnic groups, for example, may have culminated in the powerful Maoist insurgency and the resulting aftermath with intricate political stalemate in this ethnically, culturally, and geographically diverse country (Riaz and Basu 2007). Economic inequality in Nepal has economic, political, and social dimensions with its horizontal, vertical, and spatial faces. No doubt, the changing political landscape with the policies of the government during the era of parliamentary democracy has directly contributed to this rising inequality. Yet, it would be difficult to fully disentangle the effects of these different factors on inequality since they tend to gradually change over time. The fact that inequality has remained historically low in Nepal, and in South Asia in general, compared to other countries or regions in the world further complicates the issue. Economic inequality can take many forms including inequality in the ability to consume or spend, the ability to earn income, and the possession of property-wealth. While income can turn into consumption and while one can use the given stock of wealth to derive income and/or consumption, each manifests a specific type of the access to economic resources. The magnitude of inequality, too, may be different across these and their underlying sources. Where as the widely used consumption estimates show enormously rising inequality in Nepal, how would the inequality scenario alter across different types of economic resources as well as different sources of wealth and income? To what extent do the oft-cited notions of horizontal and vertical inequality hold across different resources and over time? This, in other words, is to ask how different population groups—such as by caste, ethnicity, and space—compare within themselves and with others. Finally, what do the findings mean to the economy, polity, and society of Nepal? A careful examination of these questions will help understand the economic inequality

Authors: Wagle, Udaya.
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a highly disadvantaged position (Deraniyagala 2005; Murshed and Gates 2005; Sharma 2006).
This unequal treatment of the different castes and ethnic groups, for example, may have
culminated in the powerful Maoist insurgency and the resulting aftermath with intricate political
stalemate in this ethnically, culturally, and geographically diverse country (Riaz and Basu 2007).
Economic inequality in Nepal has economic, political, and social dimensions with its
horizontal, vertical, and spatial faces. No doubt, the changing political landscape with the
policies of the government during the era of parliamentary democracy has directly contributed to
this rising inequality. Yet, it would be difficult to fully disentangle the effects of these different
factors on inequality since they tend to gradually change over time. The fact that inequality has
remained historically low in Nepal, and in South Asia in general, compared to other countries or
regions in the world further complicates the issue.
Economic inequality can take many forms including inequality in the ability to consume or
spend, the ability to earn income, and the possession of property-wealth. While income can turn
into consumption and while one can use the given stock of wealth to derive income and/or
consumption, each manifests a specific type of the access to economic resources. The magnitude
of inequality, too, may be different across these and their underlying sources. Where as the
widely used consumption estimates show enormously rising inequality in Nepal, how would the
inequality scenario alter across different types of economic resources as well as different sources
of wealth and income? To what extent do the oft-cited notions of horizontal and vertical
inequality hold across different resources and over time? This, in other words, is to ask how
different population groups—such as by caste, ethnicity, and space—compare within themselves
and with others. Finally, what do the findings mean to the economy, polity, and society of
Nepal? A careful examination of these questions will help understand the economic inequality


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