Donors could help in devising and installing an effective incentives system in addition to using their leverage to push civil service reform as a basic condition. Projects should be approved, extended or cancelled based on governance-related performance criteria. To increase the pro-poor character of aid donors need to reduce the concentration on large physical infrastructure projects and programmes, and shift the allocation of aid more towards the social and human development sectors, especially the basic social services. In physical infrastructure, maintenance of the existing stock should be emphasised as much as new construction. The focus of aid should be on building rural infrastructure, integrating of rural and remote areas with the national economy and markets, building tourism infrastructure and developing the of power sector, with due regard for ecological, social and fiscal concerns.
Most donors lack a thorough understanding of the political and socio-cultural aspects of poverty.
The geographical dimensions of poverty and deprivation are only superficially known and play a minor role in project identification and selection. Donors often know little about each other's failures and successes. Local and regional research organisations should be commissioned to undertake the necessary research. Donors should also pay more attention to the choice and balance of modes of intervention. This requires a better understanding of what is actually needed and what has proved to be feasible in the Nepalese social and political context.