book1

4
Challenge of Managing Aid in
Evolving Development Dynamics
50
Changing paradigms of aid eff ec� veness in Nepal
-Dhakal, Narayan 1
Development ini� a� ves taken a� er introduc� on of the Marshall Plan
could not perform well in most of the developing country contexts. One
reason behind low performance is exogenously imposed ‘blueprint’ of
development imposed with aid fl ow. Another is paucity of capacity and
preparedness in the recipient countries for owning and leading own
development process and internalizing outcomes. Each development
approach of two extremes, namely "Exogenous" and "Endogenous"
off ered only one-sided incen� ves to the development actors for
managing aid so as to achieve development results. This paper reviews
concepts of development approaches, with special focus on the two
extremes and a� empts to explore whereabouts of aid management
ini� a� ves in the evolving development dynamics. It concludes that
pragma� c avenue for eff ec� ve aid management could be mutually
customized development approach, where context ma� ers the most.
Key words: exogenous, endogenous development, incen� ves, aid
eff ec� veness, capacity.
1. Email: narayan_dhakal@yahoo.com. Part of this paper is based on PhD disserta� on on
"Socioeconomic Evalua� on of the Donor Harmoniza� on" submi� ed by the author to the
Graduate School of Economics, the Kyoto University, Japan in 2007.