Nepal : Public Expenditure Review, Volume 3. Social Sectors

Abstract

The report is an overview of
 Nepal's economic development, comprising five volumes,
 which include the main report, followed by reviews on
 agricultural and rural development, on the social sectors,
 and, the transport sector. Although development progress is
 noteworthy in many areas, considerable evidence of improper
 resource spending exist, thus, the main objective of this
 report is to identify the incentives, and institutional
 factors that contributed to this spending, and propose
 recommendations. Systemic factors have consistently hindered
 implementation, and development results, such as deficient
 budget planning, resource allocation, and expenditure
 management, coupled with the lack of ownership of projects,
 and programs which contributed to poor performance.
 Institutional weakness, and governance issues remain the
 most critical aspects affecting effectiveness of public
 spending across sectors in Nepal. The report suggests that
 traditional budget reforms alone, will not be effective to
 improve public resource management, rather, changes in the
 political environment, and institutional capacity are
 required, prior to the much needed reforms. Given the fiscal
 constraints, the government should promote private
 participation to undertake economic activities, and, further
 enhance and promote, public involvement in social sectors
 development, and greater local ownership of public
 expenditure programs.