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Tiny, Poor, Land-locked, Indebted, but Growing: Lessons for Late Reforming Transition Economies from Laos


  • Kelly Bird
  • Hal Hill


There are few countries where “initial conditions” are as unfavourable as those of Laos. It is a very poor, least developed country. It is land-locked, sharing its international borders with five neighbours. It has the world's highest per capita stock of unexploded ordinance, a legacy of the Indo China war. It has yet to recover from the loss of most of its entrepreneurial class and over half of its tertiary educated population in the aftermath of that war. It is heavily indebted, with substantial Soviet era obligations still outstanding. Its institutions are weak and property rights ill defined. Yet, its reform efforts over the past two decades have been largely successful, with accelerating growth and the beginnings of a relatively smooth transition from plan to market. This examination of the Lao reform programme and the subsequent outcomes suggests that, contrary to some of the prevailing pessimism, late-comers can engage with the international economy, providing their reforms are reasonably effective and credible. Neighbourhood effects have obviously been supportive in the Lao case, but their importance should not be overstated.

Suggested Citation

  • Kelly Bird & Hal Hill, 2010. "Tiny, Poor, Land-locked, Indebted, but Growing: Lessons for Late Reforming Transition Economies from Laos," Oxford Development Studies, Taylor & Francis Journals, vol. 38(2), pages 117-143.
  • Handle: RePEc:taf:oxdevs:v:38:y:2010:i:2:p:117-143
    DOI: 10.1080/13600811003753776

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    Cited by:

    1. Gustav Ranis & Frances Stewart, 2012. "Success and Failure in Human Development, 1970--2007," Journal of Human Development and Capabilities, Taylor & Francis Journals, vol. 13(2), pages 167-195, May.

    More about this item

    JEL classification:

    • O53 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - Asia including Middle East
    • P30 - Economic Systems - - Socialist Institutions and Their Transitions - - - General


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