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A survey of Viet Nam's legal framework in transition


  • Lichtenstein, Natalie G.
  • DEC


Viet Nam is trying to preserve its sociopolitical system while moving gradually toward a different economic system, recognizing that law is a valuable instrument for effecting orderly change. It has begun to enact the laws and decrees needed in such areas as company law, contract law, banking law, and, especially, laws on foreign investment. Further progress toward a market system will require more legislative activity. The author highlights four areas of special priority. Thoroughly implementing the new land law, by issuing detailed regulations to"marketize"the leasehold system, clarify land-use rights in liquidating state enterprises or making them corporations, and establish a firm basis for mortgage financing. Deepening state enterprise reform through a new legal framework for state enterprises, to be established under a revised company law, to permit state enterprises to operate under the same framework as nonstate enterprises. This should be accompanied by a new state management of its shares in enterprises. Revising the framework of company law and foreign investment law to implement and expand pilot corporatizations. Finalizing the civil code and commercial law to provide rules of the game for everyday business transaction and for resolution of the disputes that will inevitably result from them. Other areas less far-reaching in impact but important for market development include regulations to implement bankruptcy law, competition law, and securities law. In addition, the author notes the need to guard against separate legal regimes for state enterprises, nonstate enterprises, and foreign-investment enterprises, as this would interfere with efficient competition among enterprises with different ownership structures. It is also important to coordinate foreign legal traditions and preferences, especially in such areas as dispute resolution.

Suggested Citation

  • Lichtenstein, Natalie G. & DEC, 1994. "A survey of Viet Nam's legal framework in transition," Policy Research Working Paper Series 1291, The World Bank.
  • Handle: RePEc:wbk:wbrwps:1291

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    References listed on IDEAS

    1. Hanson, James A., 1992. "Opening the capital account : a survey of issues and results," Policy Research Working Paper Series 901, The World Bank.
    2. Deaton, Angus, 1991. "Saving and Liquidity Constraints," Econometrica, Econometric Society, vol. 59(5), pages 1221-1248, September.
    3. Williams,Jeffrey C. & Wright,Brian D., 2005. "Storage and Commodity Markets," Cambridge Books, Cambridge University Press, number 9780521023399, December.
    4. Claessens, Stijn & Coleman, Jonathan, 1991. "Hedging commodity price risks in Papua New Guinea," Policy Research Working Paper Series 749, The World Bank.
    5. Deaton, A.S., 1992. "Commodity Prices, Stabilization, and Growth in Africa," Papers 166, Princeton, Woodrow Wilson School - Development Studies.
    6. Larson, Donald F. & Coleman, Jonathan, 1991. "The effects of option hedging on the costs of domestic price stabilization schemes," Policy Research Working Paper Series 653, The World Bank.
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    Cited by:

    1. Pham van Thuyet, 1995. "The emerging legal framework for private sector development in Viet Nam's transitional economy," Policy Research Working Paper Series 1486, The World Bank.


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