IDEAS home Printed from
   My bibliography  Save this paper

Economy of Vietnam


  • Adam McCarty

    (Institute of Social Studies, The Hague)


Viet Nam was a country ruled by colonists, divided, or at war for most of the 20th century. Unification of the country in 1976 was followed by the invasion of Cambodia in 1978, and a subsequent brief but violent war with the People’s Republic of China. This legacy had profound consequences for economic development in general and for attempts to impose central planning in particular. Central planning was introduced in North Viet Nam in the 1950s, and in South Viet Nam after 1976, but less extensively. The implementation of central planning was therefore relatively brief and incomplete. Viet Nam’s economic transition, which is typically identified as having been initiated in 1986, was a relatively smooth period of structural adjustment and stabilization—at least for the first decade. The state sector was never large in Viet Nam, where 80% of the population lived in rural areas and were mostly engaged in the cultivation of rice. Furthermore, by 1986 the planned part of the economy was thoroughly undermined. The collapse of trading relations with the Council for Mutual Economic Assistance (CMEA—which Viet Nam joined as a full member in 1978) forced a restructuring of the modest state-owned enterprise sector, which disposed of almost one- quarter of its labour force during 1988–92. Institutional reforms also, however, generated growth in the urban household services economy, which offset the increase in the numbers of unemployed. The shift to markets was relatively easy without the burden of a large military-industrial complex, and goods hitherto exported to the CMEA found new Western markets without difficulty. During the 1990s the economy of Viet Nam underwent a transformation. Structural changes occurred during 1987–91, but changes in institutions were slower to occur, and the legacy of administrative control continued. Furthermore, important services, such as accounting, banking and the legal system, remained highly rudimentary. In some regards, therefore, ‘transition’ involves a generational process.

Suggested Citation

  • Adam McCarty, 2001. "Economy of Vietnam," Development and Comp Systems 0110002, EconWPA.
  • Handle: RePEc:wpa:wuwpdc:0110002
    Note: Type of Document - ; pages: 27; figures: included. Published in the "Far East and Australasia 2001", 32nd Edition.

    Download full text from publisher

    File URL:
    Download Restriction: no

    File URL:
    Download Restriction: no

    File URL:
    Download Restriction: no

    References listed on IDEAS

    1. Deaton, Angus, 1992. " Household Saving in LDCs: Credit Markets, Insurance and Welfare," Scandinavian Journal of Economics, Wiley Blackwell, vol. 94(2), pages 253-273.
    2. Reinhard H. Schmidt & Claus-Peter Zeitinger, 1996. "Prospects, problems and potential of credit-granting NGOs," Journal of International Development, John Wiley & Sons, Ltd., vol. 8(2), pages 241-258.
    3. Gonzalez-Vega, Claudio & Meyer, Richard L. & Navajas, Sergio & Schreiner, Mark & Rodriguez-Meza, Jorge & Monje, Guillermo F., 1996. "Microfinance Market Niches And Client Profiles In Bolivia," Economics and Sociology Occasional Papers 28332, Ohio State University, Department of Agricultural, Environmental and Development Economics.
    4. Braverman, Avishay & Guasch, J. Luis, 1986. "Rural credit markets and institutions in developing countries: Lessons for policy analysis from practice and modern theory," World Development, Elsevier, vol. 14(10-11), pages 1253-1267.
    5. Yaron, J., 1992. "Assessing Development Finance Institutions; A Public Interest Analysis," World Bank - Discussion Papers 174, World Bank.
    Full references (including those not matched with items on IDEAS)


    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.

    Cited by:

    1. Pansini, Rosaria Vega, 2004. "La Fissazione della International Poverty Line: una nuova proposta applicata al Vietnam
      [Setting a new International Poverty Line: a new proposal applied to Vietnam]
      ," MPRA Paper 4923, University Library of Munich, Germany.

    More about this item


    economy; Vietnam;

    JEL classification:

    • O53 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - Asia including Middle East

    NEP fields

    This paper has been announced in the following NEP Reports:


    Access and download statistics


    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:wpa:wuwpdc:0110002. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (EconWPA). General contact details of provider: .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.