Nepal, Aug. 21 -- Nepal's economic institutions have always been physically close to one another. Around Thapathali, Maitighar and Singha Durbar, the country's central-banking, planning and finance offices sit within a short distance of one another. Yet for much of our modern history, fiscal policy and monetary policy have often moved as if they belonged to different worlds.

A finance ministry under political pressure naturally looks toward spending, public promises, and visible relief. A central bank, responsible for prices, reserves, credit and financial stability, is often forced to act as the institutional brake. One side is accused of being reckless; the other is accused of being too cautious. The result is a familiar cycle: Budgeta...