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Education, Education Financing, and the Economy in Viet Nam


  • Jim Cobbe

    () (Department of Economics, Florida State University)


The government of Viet Nam emphasizes expanded investment in human capital to accelerate economic growth and in recent years, upper secondary and higher education have expanded rapidly, while disparities in the provision and financing of primary and lower secondary education have increased, despite official commitments to universalization of basic education and equity in provision. Official policy seeks to increase the fraction of government expenditure devoted to public education while simultaneously increasing the share of the cost of education borne by students, their families, and communities. Allowing institutions and students greater freedom has resulted in perceived imbalances in enrollment patterns and deterioration in quality. Governance and financing of educational institutions, at all levels, are in flux, and conflicts between various interests, central and local, urban and rural, rich and poor, are more apparent. The rapidly changing legal and administrative framework of education results in widely differing interpretations of both obligations and requirements in different places. The paper pays particular attention to primary education, the consequences of the financing system for the public sector and the growth of supplemental and informal fees, and the interaction between the education system and the labor market. It emphasizes that the Ministry of Education and Training is responsible for 'professional' issues at all levels, but has no operational or budgetary control over most institutions. Decisions on the allocation of central funds to Provinces are made centrally, but the center does not make allocation decisions for lower levels, although it attempts to provide guidance and influence them. At Provincial, District, and Commune levels the People's Councils have constitutional authority over expenditure and personnel, and actual decisions are strongly influenced by local party authorities and the permanent administrative bureaucracy. Other issues include foreign assistance to education, and its influence on actual policy and outcomes; and the implications for equity of escalating reliance on private contributions to the total cost of education. At issue is the soundness, from a social point of view, of huge and growing investment by the public sector and individual families in education. The data available are inadequate to draw firm conclusions, but sufficient information exists to permit some informed speculation. The key issue is that when the educational qualifications of those entering the labour force are escalating more rapidly than the educational requirements of new employment opportunities, what is best from the point of view of individuals and their families may not be optimal from the point of view of the society as a whole, unless one has a very long time-horizon and believes that the external benefits of education are extremely large. It is doubtful that either is warranted in Viet Nam, implying that it is plausible that at least some levels of education are being allowed or even encouraged to expand 'too fast' in some meaningful sense. One aspect is the appropriate interpretation of 'equity' in debates about education and its financing. One extreme interpretation looks solely at the equity implications between individuals of State contributions to the cost of education, when considering say those who complete primary education versus those who complete higher education. A desire for equity on that dimension argues for more complete State funding of primary and perhaps lower secondary education, but a reduction in State funding to higher education. An alternative view is that envisaged in the call for papers, namely equity between identifiable groups such as ethnic, rural-urban, income level, class origin, gender, etc. That implies assessing equity outcomes more in terms of the composition of graduates from each program, and the reduction of barriers to completion by under-represented groups. Official policy is murky on what the equity objectives of government are, but it is probable that perceptions of what they should be differ among different groups and are evolving.

Suggested Citation

  • Jim Cobbe, 2007. "Education, Education Financing, and the Economy in Viet Nam," Working Papers wp2007_11_01, Department of Economics, Florida State University, revised Jul 2009.
  • Handle: RePEc:fsu:wpaper:wp2007_11_01

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    References listed on IDEAS

    1. Eric A. Hanushek & Ludger Woessmann, 2008. "The Role of Cognitive Skills in Economic Development," Journal of Economic Literature, American Economic Association, vol. 46(3), pages 607-668, September.
    2. Wagstaff, Adam, 2005. "Decomposing changes in income inequality into vertical and horizontal redistribution and reranking, withapplications to China and Vietnam," Policy Research Working Paper Series 3559, The World Bank.
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    Cited by:

    1. Ulrik Beck & Saurabh Singhal & Finn Tarp, 2016. "Coffee price volatility and intra-household labour supply," WIDER Working Paper Series 016, World Institute for Development Economic Research (UNU-WIDER).

    More about this item


    Viet Nam; Education; Educational Finance;

    JEL classification:

    • O53 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - Asia including Middle East
    • I21 - Health, Education, and Welfare - - Education - - - Analysis of Education
    • I22 - Health, Education, and Welfare - - Education - - - Educational Finance; Financial Aid
    • I28 - Health, Education, and Welfare - - Education - - - Government Policy


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