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The Political Economy of Civil Conflict in Nepal


  • Sonali Deraniyagala


Nepal, the poorest country in South Asia with a high incidence of income poverty and markedly low levels of human development, has experienced violent civil conflict over the past 7 years. The “People's war” launched by Maoist guerrillas against the state has led to widespread loss of lives and livelihoods and has had serious negative effects on the country's development prospects. This paper examines the economic causes of the civil conflict in Nepal. We show that relative deprivation and related economic grievances are key causal factors of the conflict. However, our analysis also goes beyond demonstrating the links between economic deprivation and conflict and attempts to locate the conflict within the political economy of the country. We, therefore, show deprivation and conflict to have been the outcome of an uneven process of development that led to the social and economic exclusion of large segments of the population. Given that the conflict in Nepal began during a period of economic liberalization, we also examine the links between economic reform and conflict and argue that reform is likely to have had some negative distributional effects that may have intensified the conditions for violent insurrection against the state.

Suggested Citation

  • Sonali Deraniyagala, 2005. "The Political Economy of Civil Conflict in Nepal," Oxford Development Studies, Taylor & Francis Journals, vol. 33(1), pages 47-62.
  • Handle: RePEc:taf:oxdevs:v:33:y:2005:i:1:p:47-62
    DOI: 10.1080/13600810500099659

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    References listed on IDEAS

    1. Addison, Tony & Murshed, S. Mansoob, 2001. "From Conflict to Reconstruction: Reviving the Social Contract," WIDER Working Paper Series 048, World Institute for Development Economic Research (UNU-WIDER).
    2. Addison, Tony, 2001. "From Conflict to Reconstruction," WIDER Working Paper Series 016, World Institute for Development Economic Research (UNU-WIDER).
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    Cited by:

    1. Arghya Ghosh & Peter Robertson, 2012. "Trade and expropriation," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 50(1), pages 169-191, May.
    2. Lamichhane, Kamal & Ballabha, Damaru & Kartika, Diana, 2014. "Analysis of Poverty between People with and without Disabilities in Nepal," Working Papers 77, JICA Research Institute.
    3. Nidhiya Menon & Yana van der Meulen Rodgers, 2010. "War and Women’s Work: Evidence from the Conflict in Nepal," Working Papers 19, Brandeis University, Department of Economics and International Businesss School.
    4. Annemarie Westendorp & Leontine Visser, 2015. "Farmer Field Schools: Unexpected Outcomes of Gendered Empowerment in Wartime Nepal," Journal of Asian Development, Macrothink Institute, vol. 1(1), pages 1-22, October.
    5. Bista, Chirangivi, 2010. "Is Deprivation Index is a vaible tool to analyze poverty: A case study of Nepal," MPRA Paper 28331, University Library of Munich, Germany.

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