Limited but Evolving

The Political Economy of Social Protections in Nepal

Bibliographic Data

ID4900858
AuthorsUdaya R Wagle (0000-0002-4971-2055, Western Michigan University, corresponding author)
Year2015
Volume45
Issue1
Pages92-112
Publication date2015-01-02
Peer ReviewedYes
Open AccessNo
TypeARTICLE
VenueJournal of Contemporary Asia (JOURNAL)
Journal identifiersISSN: 0047-2336 • E-ISSN: 1752-7554
PublisherInforma UK Limited (PUBLISHER • GB)
DOI10.1080/00472336.2014.900570
OpenAlexW2066233379
LanguageEN
Citations received6
References cited33

Nepal’s awakening to growing social protection needs occurred only lately with most policies introduced in the 1990s. While comparable by Asian and particularly South Asian standards, these protections are limited and inconsistent. This article takes stock of social protection policies in Nepal with particular emphasis on the extent of coverage relative to needs. It explores the political economy, demand and political contexts to explain why social protections have developed the way they have in Nepal’s modern history. The understanding of Nepal’s struggle with this globally contested issue also helps draw parallels to other low-income countries.Key Words: Social protectionrisk and vulnerabilitypoliticspolitical economyNepal Notes1 According to the Census Bureau of Statistics (CBS Citation2011), for example, the official poverty incidence declined from 41% in 1995 to 25% in 2010, a 2.6% reduction per year. Poverty also declined using the international poverty line of $1.25 (purchasing power parity: PPP) a day of income from 78% in 1985 to 25% in 2010, showing an even more impressive reduction of 2.7% per year (World Bank Citation2012a). Also, the poor identified this way are, in fact, severely poor since incomes at these national and international poverty thresholds do not take consumption very far relative to the growing basic needs. If one uses the more relevant international poverty line of $2.50 a day of income, for example, poverty incidence will jump to 57% in 2010. While this estimate is lower than that for 1985, the decline would be less impressive at 1.45% per year.2 In Nepal, the formal sector “establishment” is generally understood to include businesses/organisations with 10 or more paid employees (Nepal Labour Act Citation1992).3 While increasing labour migration to urban areas and foreign countries may have reduced the size of the workforce in the informal sector since 2004, this decline may have been far from drastic since the creation of formal sector enterprises has not increased greatly.4 The qualifying age is 60 in the case of Dalits (untouchables) and residents of the Karnali zone.5 It is reasonable to use different household sizes for different forms of protection. For example, using four-people households is appropriate for minimum wages derived directly from the market. The same holds for the old age pension even though the beneficiaries are expected to be without family obligations making two-people households more appropriate. The old age, survivor and disability allowances are assumed to be for single members and the Cash for Work benefits are assumed to be for two-people households. These are used to make equivalence scale adjustments, typically made for poverty comparisons (Wagle Citation2009). This calculation is done for illustration only and can change depending on assumptions about the household size.6 In the case of the Cash for Work program for Kernali residents, however, using the poverty lines for the Mountains region would be more appropriate.7 While these poverty lines are not specific to the given context, they provide a basic idea about different categories of poverty.8 Household sizes are shrinking over time. Compared to 5.6 people in 1971, for example, average households included about 4.9 people in 2010 (CBS Citation2007, Citation2012).9 Data show that close to 56% of the households received remittance (both foreign and domestic) averaging close to Rs. 80,000 in 2010 (CBS Citation2012). Over 80% of this amount constituted foreign remittance.10 Imports have skyrocketed, whereas exports have stagnated in Nepal. Data show that imports accounted for 36% of the GDP in 2010, a fourfold increase since 1971 (World Bank Citation2012a). The size of exports relative to GDP, which was almost one-half the size of imports in 1971, did not even double.11 Of the elected members, for example, women and Muslims comprised less than 2% each, with tribal groups in Terai at 8% and no member from the Dalits.12 According to one recent poll, for example, only 26% of the randomly selected voters expressed confidence in political parties – which is lower than the 29% support for the former king – with other political institutions like the central government and parliament securing even less support (Askvik, Jamil, and Dhakal Citation2011

Basic needs · Consumption (sociology · Culture of poverty · Development economics · Economic growth · Economics · Extreme poverty · Political science · Politics · Poverty · Purchasing power parity · Social science · Sociology · Employment and Welfare Studies · Law · Social Policy and Reform Studies · Youth Education and Societal Dynamics

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