The incorporation of peripheral groups into a central state is often viewed as an
essential part of the state-building process. While benefits may be conferred to states
that consolidate power, incorporation may have more ambiguous effects for groups
being integrated. In this article, I compare economic outcomes for ethnic minority
communities in Vietnam who were exposed to twenty years of autonomous rule with
those exposed to fully assimilationist policies. In contrast to many scholars that predict
positive returns to assimilation, I find that autonomous rule has a large positive effect
on present day living standards. Using a geographic regression discontinuity design,
I find an approximately 23% increase in household income among communities that
were within autonomous regions. This effect is robust to a variety of specifications
and functional form assumptions. Furthermore, analysis of public service delivery and
participation data reveals that the primary mechanism by which the autonomous region
policy affects contemporary economic development is through increased educational
attainment levels.