Fish or steel? New evidence on the environment-economy trade-off in developing Vietnam

Abstract

Trade and investment have contributed to the improvement of living standards in developing countries, but have also put severe pressure on natural environments. How do citizens in low-income countries manage this trade-off between economic growth and environmental protection? Using a discrete choice experiment conducted as part of three large, face-to-face nationally representative surveys of Vetnamese citizens (N=>12,500 respondents per wave), we find that prospective economic benefits increase public support for investment projects, whereas potential environmental harm resulting from investment decreases the public appetite for them. When economic and environmental factors are considered jointly, our results point to the existence of an environmental risk threshold. Environmental costs beyond that threshold lead citizens to reject investment projects, even when they generate considerable economic benefits. Our results challenge the theory that individuals in low-income countries prioritize development over environmental protection, and have implications for political leaders in designing their countries’ future investment policies.