Provincial Disparity, Remittance and Household Well-Being in Nepal: A Political Economy Interpretation from a PMPD Perspective

Abstract

Remittances constitute one of the most significant external financial inflows to Nepal and play a decisive role in shaping household welfare outcomes. This study examines the provincial impact of remittances on household economic well-being using a political economy framework informed by the developmental philosophy of People’s Multiparty Democracy (PMPD). The analysis combines provincial indicators from the Nepal Living Standards Survey 2022/23, published by the National Statistics Office, with household-level survey data from 1,750 returnee migrant workers collected by CEDA across all seven provinces. The findings indicate that remittances substantially improve household welfare: 85.03% of returnees reported improved living standards, 82.88% reported increased property values, and 83.04% perceived increased wealth. However, the magnitude of these gains varies significantly across provinces. Provinces such as Gandaki and Madhesh demonstrate stronger asset-formation outcomes, while Sudurpashchim and Karnali show more consumption-smoothing effects, reflecting structural development disparities. By integrating empirical evidence with PMPD’s emphasis on equitable distribution, productive transformation, and decentralized development, the paper argues that remittances function simultaneously as a household risk-management mechanism and a potential instrument of structural transformation. The study concludes that remittance sensitive provincial policies, local investment channels, and institutional capacity-building measures are essential to convert household welfare gains into sustainable regional development.