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‘Sustainable development’ is one of the emergent and widely discussed
ecological concepts of development. Originally, the term was introduced in
1987 by Brundtland Commission as “… mee� ng the needs of the present
without compromising the ability of future genera� ons to meet their own
needs” (UNO, 1987: 24). This concept helped to convert conven� onal rivalry
rela� onship between ‘growth’ and ‘environment’ into the supplementary
rela� onship. This induced aid agencies to adopt ‘environmental
moderniza� on’ strategy (Jones, 2006: 210). Sustainability has entered into
development discourse as a part of nexus among ‘poverty’, ‘inequality’ and
the ‘environment’. The environmental degrada� on is an issue of poverty
because poverty exacerbates degrada� on. Similarly, degrada� on exacerbates
poverty by reducing well-being (Akiyama et al., 2003). As � me passes on, the
original strict environmental sense of ‘sustainable development’ expanded
to the longevity of the social impact of development and projects (Ostrom et
al., 2002:8). Aid policies of both the donors and the recipient countries have
been greatly infl uenced by the approach of "Sustainability".
‘Basic needs’ concern put forward by the Interna� onal Labour
Organiza� on (ILO) in 1976 also occupied substan� al space in the development
literatures. ‘Basic needs’ is defi ned as minimum consump� on requirements
of a family; including food, clothing, shelter, and other essen� al services,
including educa� on, health and so on. During 1980s, ‘basic needs’ was taken
as primary objec� ve of the development. Produc� vity is also the func� on
of the fulfi lment of the ‘basic needs’ because an individual with empty
stomach cannot be produc� ve. Poor people have willingness to work but
they lack assets. Therefore, they must get subsidy (Streeten et al., 1981: viii,
8). Proponents of ‘basic needs’ approach argue that the growth approach
could not be inclusive of the poor. Therefore, world an� -poverty program get
focused on equality (Myrdal, 1970). It has drawn a� en� on of development
thinkers and prac� � oners from growth to higher living standard; ins� tu� onal
changes; role of social capital and human capital. Aid management issues
have also to be changed accordingly over � me.
Since early 1990s to date, the ‘new views’ are prevailing with high
importance of the ins� tu� ons, formal and informal 'rules of the game', in
economics. ‘New views’ seem to be con� nua� on of ‘basic needs’ approach,
which contributed to devise human development indicators to measure
development qualita� vely. Much of the aid today is opera� ng on basis of
‘new views’. Unlike earlier economists who considered ‘industrializa� on’
as the indicator of development, ‘new views’ believe on the “presence of
appropriate ins� tu� ons”. Development is taken as ins� tu� onal success while
underdevelopment as ins� tu� onal failure. Studies have iden� fi ed that the
trust, coopera� on among the economic agents, judicial systems etc were
the ins� tu� onal factors of success in East Asian Economies. The failures in
transi� onal economies, including Russia were due to the lack of ins� tu� ons.
Ins� tu� on is a vague term that encompasses all type of formal and informal
establishments (Coase, 1937; North, 1990; Olson 1965; S� glitz, 1998a; and
Williamson, 1975).
Changing paradigms of aid eff ec� veness in Nepal 55