Until 1990, the beginning of the transformation process, the Mongolian education system was widely acknowledged as exemplary with regard to ensuring access and quality for a nomadic, mobile population. When the socialist system collapsed, Mongolia experienced an economic breakdown, and as a result, was classified as a developing country. This study analyses the impact of the status loss from “Second” to “Third” world on the education of nomads. The focus is on the changing paradigms of external assistance that accompanied the shift from “internationalist” to “international” cooperation. In addition, this article traces various educational reform policies of the 1990s, and analyzes the puzzle why the education of nomads remained an anathema for the international donor and loan communities. The author suggests an interpretative framework used to explain both, the particular “need for externalization” of the Mongolian Ministry of Education and the “transfer vacuum” that international organizations faced with regard to nomadic education.