The role of the state in Vietnam’s economic transition

Abstract

This paper discusses Vietnam’s economic development for the three decades since the early 1980s, and the changing role that the state played in this process. The success of the first major liberalization step (Doi Moi ) is attributed, in large part, to the microeconomic/structural reforms that occurred throughout the 1980s and to the confluence of economics and politics. This did not continue into the second half of the 1990s when reforms stalled. Since the Asian financial crisis in 1997/98, the pace of reforms has accelerated. This paper argues that, for the reforms to be effective, the state has to be viewed as performing a catalytic role whilst permitting the private sector to contribute directly to economic growth.