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During 1960s, educational planning in Asia was focused on to provide trained manpower. This manpower approach gave less priority to basic and first-level education. In the past, many catchy educational slogans were formulated e.g. 'modernization through education', 'education for social change', 'social transformation through education', 'open education', 'non-formal education' and so on. UN celebrated 1990 as Literacy year, it has declared the year 2003-2012 as United Nations Literacy Decade and every year at September 8th it celebrates International Literacy Day. Furthermore, UN has approved the year 2005-2014 as Decade of Education for Sustainable Development. Similarly, SAARC celebrated 1996 as SAARC Literacy Year. But experiences of developing countries have revealed that mere slogans and celebrations cannot increase the poor people's effective participation in educational system. Thus, the problem of 'universal provision for elementary education' - as emphasized by Dakar (2000) and Jomtein (1990) Conferences - and the abolition of 'educational inequality or disparity', by addressing the issues of vulnerable and disadvantaged, ethnic minority, and girl children - as emphasized by Dakar goal: One, Two, and Five - require determined efforts and political will for their realization. This goal has been further reinforced by Millennium Development Goals declared in Millennium Summit, 2000 AD.
The principle of right to education is spelled out in the 1948 Universal Declaration of Human Rights, which states that "Everyone has the right to education" (Article 26). The same thought was included in the 1960 UNESCO Convention against Discrimination in Education, the 1966 ICESCR, the 1979 CEDAW, and the 1989 CRC. All these human right instruments stress the right to universal and compulsory primary education and that it is free in the areas where it is offered. In addition, the campaign of 'Education for All' initiated in Jomtein (1990), reinforced in Dakar (2000) and popularized by MDGs asks for support to childhood development and appropriate educational opportunities for all children. The campaign has set an internationally agreed target to attain completely free universal primary education by 2015, and gender parity in school enrolments by 2005. These goals are tied with the MDG funding and/or the FTI for Funding by UNESCO/World Bank.
In line with its commitment to achieve 'education for all' Government of Nepal prepared Basic and Primary Education Master Plan (1991-2001) and implemented the Basic and Primary Education Project (BPEP-I) in July 1992, covering 40 districts at the time of its completion in 1998. Similarly, National Education Commission (1992 and 1997) was formed to review the national status of education and to find out the aspiration of the people. The structural reform of Ministry of Education and adopting more participatory approach by involving local bodies, NGOs, and the community organizations were initiated. With the adoption and implementation of Basic and Primary Education Program Phase II (BPEP-II) a new policy approach - i.e. Sector-Wide Approach (SWAp) began in 1999. Succeeding EFA program 2004-2009 has been fully run under SWAp framework with the collaborative effort of Government of Nepal and donors. With the adoption of this approach both parties - government and donors - have expected that it will increase greater policy coherence, increase the scope for evidence-based planning, ensure effective targeting of resources for the overall development of education sector.
Since August 2009, Government of Nepal has promulgated School Sector Reform Plan (2009-15) under the sectoral approach. "The SSRP is a continuation of the on-going programmes such as Education for All (EFA), Secondary Education Support Programme (SESP), Community School Support Programme (CSSP) and Teacher Education Project (TEP)".  In the SSRP policy document Ministry of Education/Government of Nepal has claimed that SSRP has been build on the lessons learnt and achievements made in the sector which also includes new reforms initiatives characterised by strategic interventions like: restructuring of school education, improvement in quality of education, and institutionalization of performance accountability. The five-year School Sector Reform Plan has been prepared with seven year horizon, and it intends to increase the funding commitment of development partners to bridge the funding gap.
1.2 Statement of the Problem
Education finance has been one of the most important factors for educational development. Current expenditure by government and other public sources together with household expenditure are indicators to show future picture of the educational development of a country or region. The picture of educational financing can be divided into two broad categories as: supply side expenditure and demand side expenditure.  The demand side expenses are done by the households who are considered as the demanders of education, while the supply-side educational expenditure is done mostly by government - through its own sources and/or from other sources.
Funding from donors has been one of the most important sources of supply-side financing for education, which even determines the success or failure of any of the educational policies, plans or projects in Nepal. The funding from donors has been an instrument of development and interest articulation by the donors in Nepal. In this respect it is imperative to find out how different types of donors are involved in educational financing in Nepal and what are their roles and motivations in the process of educational financing in Nepal.
With the variety of approaches taken by donors and actors in Nepalese education sector a broad picture of donor involvement can be figured out. The primary sources of educational funding have been the regular ODA flow to the country through multilateral and bilateral sources. A large chunk of money also comes from the INGO and other informal channel which is still not accounted in National Budget. That portion of money is mostly spent in informal education, capacity building and human resources development activities of small projects initiated by those organizations. Inflow of FDI in the education sector of Nepal has been non-existent.
In this respect, the inflow of money from bilateral and multilateral sources is the most important source of educational financing in the supply-side. Among the multilateral sources of funding World Bank-IDA is the single major donor with little addition by UNESCO and some EU institutions. Furthermore, the WB-IDA has tied its support plan with the government's periodic and annual plans through PRSP and Country Assistance Strategy. Thus, this study has skipped the multilateral sources of ODA for this study and has only focused on bilateral donors. The data gained from OECD online database (Table I.1 and I.2) shows that among the bilateral sources of funding Japan, Denmark, Germany, Norway and United Kingdom have been the primary sources both in terms of ODA commitment and disbursement. Among these donors, Japan and Germany have consistent and moderate amount of aid commitment each year while other three have large commitment in one or two year and other years very low amount committed. While the disbursement trend of all these donors have been similar. This shows their relative emphasis on project based (3 donors) or budgetary (2 donors) aid support for Nepal.
Thus, the purpose of this paper is to analyze the aid dynamics of Japan and four EU member countries in terms of their approach to funding and relative policy emphasis. In doing so I would like to focus on these main and supporting research questions:
Main Research question/problem:
What is the role of donors in the formulation of school education policies in Nepal?
Supporting research questions:
How is the education aid between individual and/or groups of the five major donors similar or different from each other?
Why these donors are motivated to act/focus on certain modality or policy area of aid flow?
What is the reflection of donors' agenda on educational policies of Nepal: A case study of four major school sector education policies after 1990s - viz., BPEP-I, BPEP-II, EFA Policy, and SSRP?
Through the analysis presented in these research questions this study aims to compare and find relations between donors' focus on education sector and Nepal's school education policy. By doing this it will try to sketch out the role of bilateral donors in the formulation of education policies in Nepal.
1.3 Limitations and Scope of Research
The scope of this research would be highly limited. It will focus on the segment of ODA flow leaving aside all other types of money flow to education sector of Nepal. Even within ODA, it will limit itself to study on bilateral sources of educational funding. Among bilateral sources it has selected five largest donors during recent years: Japan, Germany, Norway, Denmark and United Kingdom. While studying the role of donors in educational policy making and implementation, it will concentrate on school sector education selecting only public education system run or supported by government. Thus, it does not analyze the educational dynamics of private schools, schools being run by trusts, and community schools.
The limitations would be also in the educational financing dynamics of school education. Its scope is limited to study supply side educational financing contributed by bilateral donors which is being accounted in national budget. Hence, it doesn't study all other educational expenses like: household expenditure on education, private sector investment in education, expenses done by trusts, community organizations, individual charity and other expenses on demand or supply side. This study is fully based on the analysis of secondary data on ODA flow and policy documents of respective countries and selected four policy documents of Government of Nepal. The errors in those documents can also affect on this research which is considered as its limitation.
1.4 Variables to be analyzed
The research variables, its nature, required data, time period for study and source of data to be analyzed is presented in Table 1:
Table 1. Selected Variables and Data for analysis
Sub-sector of education where EODA is/was to be spent
EODA flow to: Education level unspecified, Basic education, Secondary education, Post secondary education
Policy objective for EODA
only participatory development/good governance,
gender and environment,
gender and participatory development/good governance,
environment and participatory development/good governance,
gender and environment and participatory development/good governance,
Type of aid in EODA flow
only investment project
only sector program
investment project and sectoral program
investment project and technical cooperation
sectoral program and technical cooperation
investment project and sectoral program and technical cooperation
Policy focus and motivations of selected donors in education sector
Policy documents and guidelines, Flow of ODA in certain sectors
Relevant website and publications
School sector policies and performance in Nepal
Policy focus of Nepali school education after 1990
Policy orientation of four selected policies: BPEP-I, BPEP-II, EFA, and SSRP
Education performance as shown by Gross Enrollment Rate, Graduation Rate, Survival Rate, etc.
Source: Created by author.
1.5 Research Methodology
This research has chosen 1990-2009 as a timeline for studying education policies and donor funding initiatives in Nepal due to various reasons. The year 1990 was when the international community showed united commitment in improving the lives of children through education in World Conference on Education for All held in Jomtein, Thiland. On the other hand, during same time Nepal ended three-decade-long autocratic rule of Panchayat Regime (a system introduced by the then King of Nepal who was practically the supreme power of the land during the regime) and introduced multiparty democratic system. The democratic government formed by popular election introduced many educational reform programs guided by the national commitment shown in international arena and among the voters. Due to these reasons this study intends to analyze the major policy orientations of the period on school education sector - with particular emphasis on policies of Basic and Primary Education Program-Phase I and II, Education for All, and School Sector Reform Program.
While doing this, the approach would be to apply mixed method of analysis by using both quantitative and qualitative data. The quantitative data would be collected by using secondary sources, while the qualitative data would be compiled from both the secondary and primary sources. The qualitative data from secondary sources would be extracted from document analysis of policy papers, guidelines, periodic plans, and other publications found in internet or library platform. The qualitative data would be further furnished by interview with key persons involved in education planning of Nepal - one from National Planning Commission, one from Ministry of Finance, one from Ministry of Education, two/three from Department of Education, two academician involved in educational policy analysis. As far as possible, researcher would also interview with key persons in major bilateral organizations of selected countries. While selecting these key respondents a criterion would be applied, which will focus on the experience and knowledge of the respondents on the issue, representation of mid-level bureaucrat/development worker directly involved in educational policy making process, and education policy research experience of selected professor.
The approach of analysis would be comparative, by utilizing document data, statistical data and interview data collected during the course of research. This research will utilize selected major policy documents of five selected donor countries and four selected policy documents of Nepali education sector effective during 1990-2009. The documents would be used to find out answers to first and third minor research questions posed earlier. Furthermore, statistical data and interview data would also be analyzed to verify second and third minor research questions. At last, the comparative analysis of all available data based on a conceptual framework will be able to give a clear picture on the research result.
2. LITERATURE REVIEW
2.1 Issues of Recipient
Human capital theorists argue that education is crucial in advancing economic development.  They say that there is high significance of educational expenditure in their return to the person's life. Gomanee et al. argue that increased social spending on health and education "not only increases human welfareâ€¦ but also tends to do so in a manner that is pro-poor, more so as the level of spending increases."  They argue that though governmental spending on these sectors does not necessarily prove to be good for redistributive development but it is for sure that "the poor, and the public more generally, do benefit."  Recent updates on returns to education show that the social and private return is highest from primary schooling; return is highest for low income countries from all level of schooling in social return, and from higher education in private returns; both social and private return of education is highest for Sub-Saharan Africa from all schooling levels.  This recognition on the importance of educational financing has been important understanding to policy makers in UN Summit when they were preparing for MDGs targets and strategies for achieving them.
The universally accepted declaration of UN Millennium Summit created eight Millennium Development Goals (MDGs) which has targets for health, income, environment, gender, development cooperation and educational development. All of these goals are to be met by 2015. The educational goal of MDG is "Goal 2: Achieve Universal Primary Education." Nepal has also rectified UN MDGs and is putting a lot of effort to achieve all these goals by 2015. MDG Progress Report 2005 prepared jointly by UNDP and Government of Nepal (GoN) is reported to have claimed that "despite the decade-long conflict, (Nepal) was likely or potentially able to meet all except two goals, the ones on universal primary education and HIV and AIDS."  So, there are still problems in educational policies and their implementation.
The formulation and implementation of educational policies in Nepal has been supported by the aid regime. Literally, aid is defined as: "A transactionâ€¦ if it is administered in order to promote the economic development and welfare of developing countries as its main objective, is concessional in character and conveys a grant element of at least 25 percent (calculated at a discount rate of 10 percent)."  Such aid has been important in Nepal's political and economic sphere since the opening up of the country after independence from Rana Autocratic rule in 1950. After that time, the importance of aid has been growing faster and faster. Even sometimes the amount of aid received is considered as the measure of success or failure for a ruling government. "No government in Nepal feels that it can survive without an increased level of aid from abroad,"  argue Hossain and others.
Though Nepal has been receiving foreign aid from last 60 years, her progress in terms of reducing poverty and increasing the human development is still low. The World Development Report 2000/01 published by World Bank claims population living below absolute poverty increased from 30 percent in 1977 to 42 percent in 2001.  While the latest Economic Survey published by GoN in 2009 considers the poverty level to be around 30.9 percent.  Though there are differences in data and questions are raised by critics regarding the validity of poverty estimate due to frequent changes in poverty measurement methods and poverty line, above data makes it clear that there has been virtually no progress in reducing poverty level during last 30 years.
If there is no progress in the stated objective of poverty reduction, what has been the impact of aid in Nepal? The impact of aid has been severe on the socio-political environment of the country. The comment made by a leading scholar, ex-minister of finance and ex-bureaucrat Mr. Devendra Raj Pandey shows the impact on society: "In fact, a threshold has been reached where it is not only the state that is dependent on foreign aid, but also the whole society that has become dependent on it."  Similarly, its impact on Nepalese polity has been: reduced responsibility and accountability of politicians and governments to the people due to its long history of aid dependency.  These seeming impacts of aid in Nepalese society and polity have been a challenging issue for the growth of entrepreneurship and long term self sustainability of Nepalese economy.
There are questions raised by scholars as to why in spite of continuous aid flow to the country, Nepal's efforts for development and poverty reduction has not been successful as expected. Leaving aside the current aid effectiveness debate initiated by donors and capacity of the recipients, and focusing on the motivations for donors to 'aid' Nepal, we can get a critical point. From this perspective, there have been two trends of aid motivation for donors in Nepal before 1990 and after. Before 1990, though there was an image of Nepal as a peaceful and least developed country which can easily motivate donors, "foreign policy considerations of the major players in regional and global politics during the Cold War wereâ€¦ important determinants of aid."  Neither Nepal's need nor the performance of its economy were the determinants of aid flow but donor aid competition among USA-USSR, India-China, and United Kingdom "seemed to have reasonable explanation of their interest in using aid to counteract that given by other donor with whom they were in rivalry."  After 1990, the emergence of multi-polar world and globalization has changed the aid dynamics in Nepal. Though there is strategic interest due to competition between India and China for regional leadership and their potential claim for world leadership in 21st century, the fundamentals of aid motivation is now divided among many actors like: Japan, China, India, Germany, United Kingdom, USA, Norway, Finland, Denmark,  etc.
Literatures contextualizing international foreign aid regime also support that "the pattern of aid disbursements do not seem to have any ties with needs in developing and transitional economies."  Akram (2003) have quoted some writers who argue that foreign aid is often used for wasteful public consumption;  disbursement of aid follows the strategic considerations of donor countries rather than the needs of the recipient countries  and that corrupt governments receive more aid than non-corrupt governments.  Study has shown that "level of per capita income of a country does not seem to have any effect on the volume of aid provided or the level of per capita aid received"  and that aid disbursement "does not drop as countries move to middle income status." 
Consistent emphasis of aid regime on education has been on the ground that there is high return of investment in education in the long run. "In the 40-plus year history of estimates of returns to investment in educationâ€¦ many more estimates from a wide variety of countries, including over-time evidenceâ€¦ reaffirm the importance of human capital theory."  It is widely accepted that returns to schooling has high visibility in future income generation and innovation leading to better technology both of which are essential for development. Recent updates on returns to education show that the social and private return is highest from primary schooling; return is highest for low income countries from all level of schooling in social return, and from higher education in private returns; both social and private return of education is highest for Sub-Saharan Africa from all schooling levels.  These indicators have been influential in determining increasing aid flow in education sector and with emphasis on primary education.
This knowledge has led to a shift in the focus of education aid preference. Mark Bray argues:  "In Nepal, much of the early assistance was for technical and higher education, but the bulk of assistance in 1997/98, reflecting the priorities of external agencies, was for basic and primary education." Furthermore, the trend from 1981-85 to 1997-98 has been that of increasing percent of loan and reducing share of grants  but the recent trend has been increasing amount of grant from OECD/DAC and multilateral agencies (Figure 1) for education sector of Nepal. The higher proportion of grant has both negative and positive effect. Some would argue that though increased amount of loan increases debt burden, it will make governments' activities self-sustaining and will increase its commitment to success.
Figure 1. ODA Grants and Loans disbursed in Education Sector of Nepal (Gross Disbursement at 2008 constant price, US$ millions)
Source: OECD, 2010 (Figure created by the author using the sourced data).
The transitional state of Nepal's polity and decade long conflict together has had negative impact on almost every sector of the country. This long political turmoil has made the country's ability to finance its educational and other public expenses weak. This situation of early years of 2000s has a significant implication for the amount of grant received not only from OECD/DAC group but also from multilateral agencies who have almost always advocated for self-sustainability of the economy and helping this process through their concessional loan during 1990s. Nevertheless, following section shows, whatever may be the source or type of ODA, it has high significance in terms of their effect on school education of Nepal during last 20 years.
2.2 Issues of Donors
The motivations for donor to education aid in Nepal may be multiple. It may be a response to the international trend of spending in education. With the popularity of arguments put forward by human capital theorists on the importance of education for future growth and individual capability enhancement a large stimulus for aid in education generated. Recognition of education as human right and international Conventions after 1990 led this international trend on increasing donor support for education to higher levels. One of the major donors of Nepal, i.e. Japan, had virtually no education policy papers written by Ministry of Foreign Affairs or the Japan International Cooperation Agency (JICA) before 1990.  After publication of first education policy paper in 1994, Japan went on to produce many others in the subsequent years.
Study done by Kijima showed that, Japanese foreign aid policy on education was different from other aid agencies. It is unique in type (school construction), subject (math, science, and technology - MS&T education), and modality (project-type aid).  He argues that Japan employs education aid as a method to address its own economic concerns and to attain status in international community. Moreover, his second point says that it has adopted a strategy fully utilizing its comparative advantage in delivering education aid without intervening in the recipient country's political, social, and cultural ideology.  Thus, taking the stance from neo-realist theoretical approach he argues that Japanese education aid is motivated to promote its own national interest. And at the same time, he argues that Japan exhibits concern for humanitarian assistance while providing educational aid, taking stance of liberal idealist paradigm.
1.3 Conceptual Framework
Hypothesis 1: The education aid being provided by the five donors are different, representing their national or regional interests or agendas.
Hypothesis 2: The modality of aid flow and the policy concentration of those aid agencies are the primary determinants of education policy priorities in Nepal.