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Agriculture and Income Distribution in Rural Vietnam under Economic Reforms: A Tale of Two Regions

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Author Info
Loren Brandt ()
Dwayne Benjamin ()

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Abstract

This paper exploits the panel dimension of the Vietnam Living Standards Survey (VLSS) in order to analyze the main changes occurring in agriculture in Vietnam over the period 1993- 1998. This period was marked by a continuation of the reforms that began in 1988 with the implementation of Resolution 10, Vietnam’s own version of the Chinese Household Responsibility System. We focus on the impact of two main policy changes: first, the increase in the rice export quota and the significant increase in the price of rice, especially in the south; second, liberalization of the fertilizer market and the sharp drop in the price of fertilizer. To this end, we document changes in the empirically observable “institutional environment,” exploring changes in rice and other crop prices as well as fertilizer prices. With this as background, we explore changes in r ice production, consumption and marketing, and their links to changes in prices and incomes. We also estimate the degree to which these increases can be “explained” by increased use of inputs like fertilizer, cropping intensity, and increased yields. Finally, we investigate the distributional impacts of these changes, including a detailed examination of the linkages between rice marketing and income distribution using nonparametric econometric techniques. We find that the agricultural reforms had a largely beneficial impact on the well being of rural households throughout Vietnam, but that farmers in the south gained most, consistent with expectations given the policy changes. More generally, our conclusions suggest that market reforms can have a significant impact on incentives, without adverse consequences for income distribution.

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Paper provided by William Davidson Institute at the University of Michigan Stephen M. Ross Business School in its series William Davidson Institute Working Papers Series with number 519.

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Length: 58 pages
Date of creation: 01 Mar 2002
Date of revision:
Handle: RePEc:wdi:papers:2002-519

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Related research
Keywords: economic reforms in Vietnam; trade liberalization; agricultural productivity; welfare distribution;

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Find related papers by JEL classification:
P3 - Economic Systems - - Socialist Institutions and Their Transitions
Q12 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Micro Analysis of Farm Firms, Farm Households, and Farm Input Markets
Q17 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Agriculture in International Trade
Q18 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Agricultural Policy; Food Policy

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References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
  1. Goletti, Francesco & Minot, Nicholas, 1997. "Rice markets, agricultural growth, and policy options in Viet Nam," MTID discussion papers 14, International Food Policy Research Institute (IFPRI). [Downloadable!]
  2. Goletti, Francesco & Minot, Nicholas & Berry, Philippe, 1997. "Marketing constraints on rice exports from Viet Nam," MTID discussion papers 15, International Food Policy Research Institute (IFPRI). [Downloadable!]
  3. Deaton, Angus, 1989. "Rice Prices and Income Distribution in Thailand: A Non-parametric Analysis," Economic Journal, Royal Economic Society, vol. 99(395), pages 1-37, Supplemen.
  4. Shorrocks, Anthony F, 1983. "The Impact of Income Components on the Distribution of Family Incomes," The Quarterly Journal of Economics, MIT Press, vol. 98(2), pages 311-26, May. [Downloadable!] (restricted)
  5. Dwayne Benjamin & Loren Brandt & Paul Glewwe & Li Guo, 2000. "Markets, Human Capital, and Inequality: Evidence from Rural China," Working Papers benjamin-00-01, University of Toronto, Department of Economics. [Downloadable!]
    Other versions:
  6. Shorrocks, A F, 1982. "Inequality Decomposition by Factor Components," Econometrica, Econometric Society, vol. 50(1), pages 193-211, January. [Downloadable!] (restricted)
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  1. Niimi, Yoko & Pham, Thai Hung & Reilly, Barry, 2008. "Determinants of remittances : recent evidence using data on internal migrants in Vietnam," Policy Research Working Paper Series 4586, The World Bank. [Downloadable!]
  2. Ravallion, Martin & van de Walle, Dominique, 2006. "Does rising landlessness signal success or failure for Vietnam's agrarian transition?," Policy Research Working Paper Series 3871, The World Bank. [Downloadable!]
    Other versions:
  3. Alberto, Gabriele & Schettino, Francesco, 2006. "Child Mortality In China And Vietnam In A Comparative Perspective," MPRA Paper 3987, University Library of Munich, Germany, revised Dec 2006. [Downloadable!]
  4. Seshan, Ganesh, 2005. "The impact of trade liberalization on household welfare in vietnam," Policy Research Working Paper Series 3541, The World Bank. [Downloadable!]
  5. Vasco Molini & Guanghua Wan, 2008. "Discovering sources of inequality in transition economies: a case study of rural Vietnam," Economic Change and Restructuring, Springer, vol. 41(1), pages 75-96, March. [Downloadable!] (restricted)
  6. Alan de Brauw & Scott Rozelle, 2003. "Household Investment through migration in Rural China," Department of Economics Working Papers 200, Department of Economics, Williams College. [Downloadable!]
  7. Aksoy, M. Ataman & Isik-Dikmelik, Aylin, 2007. "The role of services in rural income : the case of Vietnam," Policy Research Working Paper Series 4180, The World Bank. [Downloadable!]
  8. Van der Walle, Dominique & Cratty, Dorothyjean, 2003. "Is the emerging nonfarm market economy the route out of poverty in Vietnam?," Policy Research Working Paper Series 2950, The World Bank. [Downloadable!]
    Other versions:
  9. Trung, Le Dang & Tam, Tran Ngo Minh & Baulch, Bob & Hansen, Henrik, 2007. "Testing for Food Market Integration: A Study of the Vietnamese Paddy Market," 81st Annual Conference, April 2-4, 2007, Reading University 7974, Agricultural Economics Society. [Downloadable!]
    Other versions:
  10. Pham, Hung T, 2006. "Rural Nonfarm Employment Under Trade Reform Evidence From Vietnam, 1993-2002," MPRA Paper 6476, University Library of Munich, Germany. [Downloadable!]
  11. Beegle, Kathleen & Dehejia, Rajeev & Gatti, Roberta, 2005. "Why should we care about child labor? The education, labor market, and health consequences of child labor," Policy Research Working Paper Series 3479, The World Bank. [Downloadable!]
    Other versions:
  12. Patricia Justino & Julie Litchfield, 2003. "Poverty Dynamics in Rural Vietnam: Winners and Losers During Reform," PRUS Working Papers 10, Poverty Research Unit at Sussex, University of Sussex. [Downloadable!]
  13. Yoko Niimi & Puja Vasudeva Dutta & Alan Winters, 2003. "Trade Liberalisation and Poverty Dynamics in Vietnam," PRUS Working Papers 17, Poverty Research Unit at Sussex, University of Sussex. [Downloadable!]
  14. Edmonds & Eric V., 2004. "Household composition and the response of child labor supply to product market integration: evidence from Vietnam," Policy Research Working Paper Series 3235, The World Bank. [Downloadable!]
  15. Yoko Niimi, 2005. "An Analysis of Household Responses to Price Shocks in Vietnam: Can Unit Values Substitute for Market Prices?," PRUS Working Papers 30, Poverty Research Unit at Sussex, University of Sussex. [Downloadable!]
  16. Ravallion, Martin & Van der Walle, Dominique, 2003. "Land allocation in Vietnam's agrarian transition," Policy Research Working Paper Series 2951, The World Bank. [Downloadable!]
  17. Edmonds & Eric V. & Pavcnik, Nina, 2004. "Product market integration and household labor supply in a poor economy: evidence from Vietnam," Policy Research Working Paper Series 3234, The World Bank. [Downloadable!]
  18. Dollar, David, 2004. "Globalization, poverty, and inequality since 1980," Policy Research Working Paper Series 3333, The World Bank. [Downloadable!]
    Other versions:
  19. Klump, Rainer & Prüfer, Patricia, 2005. "How to prioritise policies for poverty reduction: Applying Bayesian Model Averaging to Vietnam," Proceedings of the German Development Economics Conference, Kiel 2005 27, Verein für Socialpolitik, Research Committee Development Economics. [Downloadable!]
  20. Harigaya, Tomoko & de Brauw, Alan, 2004. "Migration, Credit Availability, And Expenditure Growth In Rural Vietnam," 2004 Annual meeting, August 1-4, Denver, CO 20030, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association). [Downloadable!]
  21. Deininger, Klaus & Jin, Songqing, 2005. "Land Sales and Rental Markets in Transition: Evidence from Rural Vietnam," 2005 Annual meeting, July 24-27, Providence, RI 19359, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association). [Downloadable!]
    Other versions:
  22. Jones, Nicola & Nguyen, Ngoc Anh & Nguyen, Thu Hang, 2007. "Trade liberalisation and intra-household poverty in Vietnam: a q2 social impact analysis," MPRA Paper 4206, University Library of Munich, Germany. [Downloadable!]
  23. Klump, Rainer & Pruefer, Patricia, 2006. "Prioritizing policies for pro-poor growth: applying bayesian model averaging to Vietnam," Discussion Paper 117, Tilburg University, Center for Economic Research. [Downloadable!]
  24. Isik-Dikmelik, Aylin, 2006. "Trade reforms and welfare : an ex-post decomposition of income in Vietnam," Policy Research Working Paper Series 4049, The World Bank. [Downloadable!]
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