Central Data Catalog

Citation Information

Type Working Paper
Title Applying Historical Precedent to New Conventional Wisdom on Public Sector Roles in Agriculture and Rural Development, Vietnam Case Study
Publication (Day/Month/Year) 2009
URL http://www.aafv.org/IMG/pdf/AdamFforde_Agriculture_RuralDevelopment-Vietnam.pdf
For many analysts and commentators, Vietnam in recent years has been a
developmental ‘success’. The central task facing this paper is to explain the ways in
which this success is the result of past history. In meeting this task I advance a series
of arguments, many of which are perhaps rather surprising. On the one hand, they
suggest that, given the historical background, Vietnam’s recent success with a market
economy and what is widely thought to be a strong state presence was to be expected.
On the other, they should provoke reflection on how politics, and what is learnt from
politics, may heavily influence developmental outcomes; in Vietnam, only when
political issues, viewed in the wide, had been adequately resolved could economic
logics operate.
To start with, in thinking about the possible roles of official policy in Vietnam it is
vital to appreciate that since the emergence of a market economy at the start of the
1990s the reported state share of GDP has generally increased. This has combined
with macro-economic stability (fiscal and external balances), a general absence of
distortions to the main macro-economic prices (interest rates, exchange rate, price of
labour), rather fast recorded declines in poverty and rapid trend rates of growth of
GDP, including agriculture.
After the emergence of a market economy in the early 1990s political structures
controlled by the Vietnamese Communist Party (VCP) continued to play active roles
in development, as they have since the VCP formed a government in Hanoi in 1954
(or earlier, depending upon historical interpretation). For much of the period prior to
the early 1990s these roles included strong efforts to prevent emergence of a market
economy, and I argue below that the institutions of family-based production and
markets that are the foundations of success since the early 1990s appeared despite
VCP intentions: policy accepted, rather than driving, change.
Stability with a reportedly buoyant state sector is, of course, so unorthodox as to
amount to a challenge to ‘development economics 101’, since standard narratives
stress the economic costs of intervention. For example the ‘rent-seeking literature’
argues that the above picture is inconsistent with economic logics. This suggests that
there must, if economic logics are as they must be part of the story, be recourse to
other economic logics to explain what has happened. Yet it is possible to argue that
development would have been better had the recorded state sector not been so
significant, not least because of arguments about its effects upon democratisation.
Such conclusions depend of course upon how development is evaluated.

Related studies