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Reform, growth, and poverty in Vietnam

Author

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  • Dollar, David

Abstract

Vietnam grew rapidly in the 1990s, and yet by many measures it has poor economic institutions. Dollar seeks to explain this apparent anomaly. Between the 1980s and 1990s Vietnam carried out significant economic reforms, notably stabilization, the introduction of positive real interest rates, trade liberalization, and initial property rights reform in agriculture. Relating these changes to the empirical growth literature, the author finds that Vietnam's growth acceleration is about what would be predicted. Conditional convergence also suggests that the country's high growth rate will decelerate unless further reforms are taken. The author then looks at the level of institutional and policy development in Vietnam compared with other emerging market economies. While Vietnam's policies have improved, they did so starting from a very low base. So, it can be simultaneously true that Vietnam's policies have improved a lot and yet are rather poor in comparative perspective. A comparison of governance indicators, financial sector issues, and the infrastructure of international integration reveals serious institutional weaknesses in Vietnam that need to be addressed if a high growth rate is to be sustained.

Suggested Citation

  • Dollar, David, 2002. "Reform, growth, and poverty in Vietnam," Policy Research Working Paper Series 2837, The World Bank.
  • Handle: RePEc:wbk:wbrwps:2837
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    References listed on IDEAS

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    Citations

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    Cited by:

    1. Goldbaum, David, 2008. "Coordinated investing with feedback and learning," Journal of Economic Behavior & Organization, Elsevier, vol. 65(2), pages 202-223, February.
    2. Klaus Deininger & Songqing Jin, 2008. "Land Sales and Rental Markets in Transition: Evidence from Rural Vietnam," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 70(1), pages 67-101, February.
    3. Xuan-Binh Vu & Son Nghiem, 2016. "Analysis of GDP trends and inequalities in Vietnam`s provinces and groups of provinces," Asian Journal of Empirical Research, Asian Economic and Social Society, vol. 6(7), pages 167-186, July.
    4. Eric Edmonds & Nina Pavcnik, 2002. "Does Globalization Increase Child Labor? Evidence from Vietnam," NBER Working Papers 8760, National Bureau of Economic Research, Inc.
    5. 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.
    6. Mohamed Fenira, 2015. "Trade Openness and Growth in Developing Countries: An Analysis of the Relationship after Comparing Trade Indicators," Asian Economic and Financial Review, Asian Economic and Social Society, vol. 5(3), pages 468-482, March.

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