In the past five decades, Nepal has followed the standard modernization path with mixed results. The country witnessed the growth of rent seeking elites and increased income inequality, in spite of huge national and international expenditures. This article presents a retrospect of the major socio-economic development policies that Nepal adopted in the past 50 years during which a variety of politico-economic decision-making systems were introduced. The initial years in the fifties, after emancipation from a very autocratic regime of more than 100 years, were particularly chaotic. The second half of the fifties ushered in a period of reform but this was interrupted by King Mahendra's unfortunate political coup of 1960. The socioeconomic development of 1961 to 1990 was very sluggish, regionally biased and unproductive, which led to mass poverty level in Nepal. The socio-economic progress after 1990 seems encouraging but the real achievements have been overshadowed by the weakness of the politico-economic character of the ruling classes. Furthermore, the emergence of the Maoists in 1996 created a politico-economic crisis and halted the opportunities for socio-economic development. A new understanding among political parties including the Maoists in 2006 provides hope for building a new Nepal. A politico-economic structural change is required to enhance village/rural economy along with human and social capital enrichment strategies that will pave the way to break the poverty cycle. A novel constitution that guarantees rights, resources and responsibility, accountability at different levels and empowers people, rather than a simple politico-administrative makeshift at the central level is expected.
The first civilizations in Nepal, which flourished around the 6th century B.C., were confined to the fertile Kathmandu Valley where the present-day capital of the same name is located. It was in this region that Prince Siddhartha Gautama was born c. 563 B.C. Gautama achieved enlightenment as Buddha and spawned Buddhism.
Nepali rulers' early patronage of Buddhism largely gave way to Hinduism, reflecting the increased influence of India, around the 12th century. Though the successive dynasties of the Gopalas, the Kiratis, and the Licchavis expanded their rule, it was not until the reign of the Malla kings from 1200–1769 that Nepal assumed the approximate dimensions of the modern state.
The kingdom of Nepal was unified in 1768 by King Prithvi Narayan Shah, who had fled India following the Moghul conquests of the subcontinent. Under Shah and his successors, Nepal's borders expanded as far west as Kashmir and as far east as Sikkim (now part of India). A commercial treaty was signed with Britain in 1792 and again in 1816 after more than a year of hostilities with the British East India Company.