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The Impact of Recentralization on Public Services: A Difference-in-Differences Analysis of the Abolition of Elected Councils in Vietnam

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  • Malesky, Edmund
  • Nguyen, Cuong
  • Tran, Anh

Abstract

Comparative political economy offers a wealth of hypotheses connecting decentralization to improved public service delivery. In recent years, influential formal and experimental work has begun to question the underlying theory and empirical analyses of previous findings. At the same time, many countries have grown dissatisfied with the results of their decentralization efforts and have begun to reverse them. Vietnam is particularly intriguing because of the unique way in which it designed its recentralization, piloting a removal of elected People’s Councils in ninety-nine districts across the country and stratifying the selection by region, type of province, and urban versus rural setting. We take advantage of the opportunity provided by this quasi-experiment to test the core hypotheses regarding the decision to shift administrative and fiscal authority to local governments. We find that recentralization significantly improved public service delivery in areas important to central policy-makers, especially in transportation, healthcare, and communications.

Suggested Citation

  • Malesky, Edmund & Nguyen, Cuong & Tran, Anh, 2013. "The Impact of Recentralization on Public Services: A Difference-in-Differences Analysis of the Abolition of Elected Councils in Vietnam," MPRA Paper 54187, University Library of Munich, Germany.
    • Handle: RePEc:pra:mprapa:54187
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    3. Raúl A Ponce-Rodríguez & Charles R Hankla & Jorge Martinez-Vazquez & Eunice Heredia-Ortiz, 2018. "Rethinking the Political Economy of Decentralization: How Elections and Parties Shape the Provision of Local Public Goods," Publius: The Journal of Federalism, CSF Associates Inc., vol. 48(4), pages 523-558.
    4. Manh‐Tien Bui & Thai‐Ha Le & Donghyun Park, 2023. "Impacts of fiscal decentralization on local development in Vietnam: A disaggregated analysis," Economics of Transition and Institutional Change, John Wiley & Sons, vol. 31(1), pages 3-31, January.
    5. Yu Qi & Jinliang Yu, 2023. "Decentralization and local pollution activities: New quasi evidence from China," Economics of Transition and Institutional Change, John Wiley & Sons, vol. 31(1), pages 115-159, January.
    6. Maier, Carl, 2016. "Local public goods as perfect substitutes -- centralization vs. decentralization," VfS Annual Conference 2016 (Augsburg): Demographic Change 145928, Verein für Socialpolitik / German Economic Association.
    7. Carlitz, Ruth D. & Povitkina, Marina, 2021. "Local interest group activity and environmental degradation in authoritarian regimes," World Development, Elsevier, vol. 142(C).
    8. Federico Revelli, 2016. "Tax limits and local elections," Public Choice, Springer, vol. 166(1), pages 53-68, January.
    9. Quang Nguyen, 2017. "Do Natural Disasters Open a Window of Opportunity for Corruption?," Journal of Development Studies, Taylor & Francis Journals, vol. 53(1), pages 156-172, January.
    10. Foa, Roberto Stefan, 2022. "Decentralization, historical state capacity and public goods provision in Post-Soviet Russia," World Development, Elsevier, vol. 152(C).
    11. Cai, Meina & Sun, Xin, 2018. "Institutional bindingness, power structure, and land expropriation in China," World Development, Elsevier, vol. 109(C), pages 172-186.
    12. John Rand, 2017. "Are politically connected firms less constrained in credit markets?," WIDER Working Paper Series wp-2017-200, World Institute for Development Economic Research (UNU-WIDER).
    13. Trinh, Trong-Anh & Feeny, Simon & Posso, Alberto, 2022. "Political connections and post-disaster assistance in rural Vietnam," European Journal of Political Economy, Elsevier, vol. 72(C).
    14. Zarychta, Alan, 2020. "Making social services work better for the poor: Evidence from a natural experiment with health sector decentralization in Honduras," World Development, Elsevier, vol. 133(C).
    15. Kosec, Katrina & Song, Jie & Zhao, Hongdi, 2021. "Bringing Power to the People or the Well-Connected? Evidence from Ethiopia on the Gendered Effects of Decentralizing Service Delivery," 2021 Conference, August 17-31, 2021, Virtual 315258, International Association of Agricultural Economists.
    16. Jose M Alonso & Rhys Andrews, 2019. "Fiscal decentralisation and local government efficiency: Does relative deprivation matter?," Environment and Planning C, , vol. 37(2), pages 360-381, March.

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    More about this item

    Keywords

    Recentralization; Elected Councils; Household Survey; Vietnam;
    All these keywords.

    JEL classification:

    • A1 - General Economics and Teaching - - General Economics
    • H0 - Public Economics - - General
    • P0 - Political Economy and Comparative Economic Systems - - General

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