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Abstract

This paper asks what motivates Western donors to provide foreign aid to Nepal. Results reveal existence of both donor interest and recipient need considerations in the disbursement of aid to this country over the period 1981 to 2005. Donors’ desire for promotion of commercial opportunities, their general economic affluence, as well as Nepal’s per capita GDP are all significant determinants of aid. On the other hand, neither Nepal’s economic growth nor its people’s political freedoms and civil liberties bear a significant relationship to the level of assistance it receives.

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