The monarchy has now been gone for more than a month and the 'people's war' ended two years ago, but there is no sign of the peace dividend. The country is without a head of state and run by a caretaker government two months after elections.

With scarcely any time left to produce next year's fiscal budget, which we were promised would reflect revolutionary change, the political parties continue to bicker. They have spent two precious months exchanging threats and mutual recriminations over what should have been simple democratic, consensual decision-making.

At issue have been an agreement on how to form and dissolve the government, the return of property seized by the Maoists, the demilitarisation of the YCL, and the merging of Maoist soldiers into the regular army.

These now seem to have been sorted out, but in the meantime the sand under the political parties has shifted. While the NC and UML initially worked together to get the Maoists to agree to these conditions, the UML is now increasingly aligned with the Maoists in a move to make a UML politician the first president of Nepal.

Similarly, the MJF, the fourth main party and largest in the Tarai, went along with the NC and UML at first, but is now intent on holding up the assembly sessions by demanding an autonomous Madhes even before a new constitution is written. It is being supported in this by the TMDP and the SP, who hitherto were political rivals.

There is a strong feeling of déjà vu in all this. Most of the conditions negotiated with the Maoists were agreed after the 1990 andolan, but things only went downhill thereafter. During the subsequent 14 years of unfettered 'democratic' practice, political corruption and waywardness flourished. The NC and UML vied ruthlessly to control the government, not hesitating to enter into opportunistic alliances with the leaders of the Panchayat regime they had ousted. The present squabbling simply emphasises the self-serving nature of our politicians.

The people are desperate for food, jobs, income, healthcare and education. They were promised these during the elections, but now that the politicians are comfortably ensconced, these issues are being ignored in the power plays. Whatever sense of collective accountability that appeared at election time has vanished into thin air.

The donor community seems concerned. A stream of senior foreign aid officials have been visiting Kathmandu recently, obviously hoping that their presence and promise of funds would somehow help restore normalcy.

But, judging by the post-1990 era, the availability of easy money without policy and institutional reforms only fuels corruption. Surely donors must realise that Nepal has been an aid recipient longer than most other countries but continues to wallow in chronic poverty. Ill-conceived aid does in fact do more harm than good: it amounts to killing with kindness.

For there to be a peace dividend, donors must insist on the empowerment of the people, with aid money going directly to the people.

Look at the success of the community forest projects. The World Bank in 1987 made user management of forests a condition for its $50 million Structural Adjustment Loan, thus forcing the government to amend forestry legislation in 1988.

This did not cost the bank a single cent, but it made Nepal a model for successful forest protection and the user groups themselves became significant conduits for local development. Thus the cardinal rule of responsible aid-giving should be to help Nepal devolve authority to its primary stakeholders