Using panel data from Vietnam, this paper estimates the determinants
of consumption growth for the period 2002-04, using a microgrowth
model. While controlling for individual heterogeneity, particular
attention is devoted to the question of whether geography,
broadly defined to include natural and man-made characteristics at
the level of the commune, can be responsible for lower growth rates
and, consequently, poverty persistence. We find very limited support
for this hypothesis. Neither public nor private investment at commune
levels seem to have, per se, a significant effect on growth. However,
local poverty rate does have an important, nonlinear, relation with
growth rate of consumption at individual level, suggesting the importance
of local externalities in this process. The policy implications of
this finding are discussed.