Academic journal article Journal of Southeast Asian Economies

Vietnam: Decentralization Amidst Fragmentation

Academic journal article Journal of Southeast Asian Economies

Vietnam: Decentralization Amidst Fragmentation

Article excerpt

1. Introduction

Formal decentralization in Vietnam started with Doi Moi (economic innovation) in 1986 and accelerated in the late 1990s. Since then, the scope of decentralization has continuously been expanded. However, the scope has been mostly limited to fiscal and administrative decentralization rather than political or personnel decentralization. Decentralization was expected to "promote strong dynamism, creativity, autonomy, self-responsibility at all local government levels in their management and implementation of socio-economic development tasks" (Nghi quyet 08/2004/NQ-CP cua Chinh phu ve tiep tuc day manh phan cap quan ly nha nuoc giua Chinh phu va chinh quyen tinh, thanh pho true thuoc Trung uong, hereafter Resolution 08).

To date, the results have fallen short of the government's expectations. From the central government's perspective, decentralization has undermined the uniformity of national policies and encouraged unhealthy competition between local governments. On one hand, it has resulted in a decline in the central government's control over local governments; on the other, it has resulted in an increase in localism. For local governments, decentralization has not always been accompanied by institutional autonomy and necessary financial resources. Moreover, there has been a lack of synchronization between central ministries as well as consistency between different dimensions of decentralization. As a result, local governments were confused in many circumstances, and therefore became passive, relying heavily on instructions from the centre. Finally, the people and businesses --those ultimately affected by the decentralization policy--have neither been involved nor had a voice in the most important policies that affect their life and economic activities.

Within the Vietnamese state hierarchy, four fundamental tensions have emerged during the process of decentralization. The first is that decentralization necessarily requires a fundamental shift in the role of the state, from social planner and decision-maker to facilitator and rule-setter. However, in such a hierarchical and unitary system like Vietnam, this shift is never simple as it not only involves changes in the government's internal organization, but also undermines its inherently discretionary power. The second tension results from the fact that, in many cases, more decentralized responsibility is not accompanied by a sufficient increase in capacities and resources, causing serious overload for the local government. The third tension is between accountability and autonomy, as increasing autonomy for the local government does not by itself ensure accountability. Finally, the local government's increasing self-governance may break the consistency and uniformity of national policies.

This article analyses common and crosscutting issues shared by different dimensions of decentralization in Vietnam since Doi Moi, focusing on the relationship between the two most important levels of government, namely the central and the provincial. A major theme running through this article is that despite being a unitary state, there has been serious fragmentation among different levels of government as seen in the growing number of provinces, districts, and communes in the last three decades.

The remainder of this paper is organized into five sections. Section 2 presents an overview of decentralization in Vietnam since Doi Moi. Section 3 describes sub-national-central relations and allocations of powers between central and provincial governments. Section 4 analyses two recent debates about decentralization in Vietnam, namely the removal of the People's Council at the district and commune levels, and the consequences of decentralization on institutional integrity at the provincial level. Section 5 provides a general assessment of the successes and limitations of decentralization in Vietnam. Section 6 concludes and provides some policy recommendations, which emphasize the need for a fundamental change in the concept and design of decentralization in Vietnam. …

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