The impacts of civil society and inequality on the extractive capacity of authoritarian regimes: a conceptual model and the case study of Vietnam


This paper analyses the impacts of civil society and inequality on the extractive capacity of authoritarian regimes and undertakes a case study of Vietnam. The paper argues that civic groups tend to reduce the extractive capacity of such states, defined as the sum of taxation and rent extraction. This induces the government to substitute rent-extraction for taxation. This hypothesis is tested using fixed-effects regression techniques with panel data of 63 provinces for 2009–2014. Our estimates imply that increases in non-profit institutions reduce the regime’s extraction in terms of both budget revenue and informal charges paid by registered firms. Other results are also consistent with our conceptual model. Provinces with larger income gaps exhibit lower extraction, proxied by government expenditures.

This is a preview of subscription content, log in to check access.

Fig. 1

Source: Authors’ design based on Congleton and Lee (2009)

Fig. 2

Source: Authors’ design


  1. 1.

    World Bank’s classification as of 2018 fiscal year, see:

  2. 2.

    See Vietnamese Ministry of Finance (2017) for the detailed proposal.

  3. 3.

    Figures of Vietnamese government’ tax revenue are collected in World Development Indicators, available at World Bank’s website:

  4. 4.

    World Bank’s data show that Vietnam still sets high barriers for doing business when ranking 70th out of 190 assessed economies in terms of ease of doing business in the latest ranking 2020. See more at: Higher barriers are made in staring a business (#115), paying formal tax (#109); and resolving insolvency (#122). These give more room for the state and state’s officials to get rent extraction.

  5. 5.

    Vietnam ranked 117th out of 180 countries and territories in 2018 in CPI; during 2015-2018, Vietnamese government remained relatively high corrupt with the low scores of CPI, around 31-35/100 points.

  6. 6.

    Olson (1965) proposes that group sizes, values that each member can receive, and free-rider elements are key determinants for the success of collective action. When the economy grows, middle and high-income citizens in high-performing autocracies have incentives to carry out more non-profit activities to further their interests. However, the outcomes depend on the efficiency of their collective action and the government’s choices.

  7. 7.

    See Congleton and Lee (2009) for the conditions and corner solutions.

  8. 8.

    Data are collected from PCI’s website:

  9. 9.

    Our suggestion should be careful when some forms of informal charges in Vietnam are taxation and official rent extraction, see Fig. 2.

  10. 10.

    Taking a revolutionary approach, Giovanni et al. (2015) show certain groups such as workers and the middle class can put pressure on the ruler to increase the powers of the parliament and redistribution to keep these groups content, or “encompassed” in non-revolutionary terms.


  1. Acemoglu, D., & Robinson, J. (2000). Why did the west extend the franchise? Democracy, inequality, and growth in historical perspective. The Quarterly Journal of Economics,115(4), 1167–1199.

    Article  Google Scholar 

  2. Acemoglu, D., & Robinson, J. (2006). Economic origins of dictatorship and democracy. Cambridge: Cambridge University Press.

    Google Scholar 

  3. Aidt, T. (2016). Rent seeking and the economics of corruption. Constitutional Political Economy,27, 142–157.

    Article  Google Scholar 

  4. Ángeles Castro, G., & Ramírez Camarillo, D. (2014). Determinants of tax revenue in OECD countries over the period 2001–2011. Contaduría y Administración,59(3), 35–59.

    Article  Google Scholar 

  5. Anheier, H., & Salamon, L. (1996). The international classification of nonprofit organizations: ICNPO-Revision 1, 1996. Working Papers of the Johns Hopkins Comparative Nonprofit Sector Project, No.19.

  6. Ansell, B. W., & Samuels, D. J. (2014). Inequality and democratization: An elite-competition approach. Cambridge: Cambridge University Press.

    Google Scholar 

  7. Benjamin, D., Brandt, L., & McCaig, B. (2016). Growth with equity: Income inequality in Vietnam, 2002–14. IZA Discussion Paper Series, No. 10392.

  8. Bernstein, T. P., & Lü, X. (2000). Taxation without representation: Peasants, the central and the local states in reform China. The China Quarterly,163, 742–763.

    Article  Google Scholar 

  9. Besley, T., & Kudamatsu, M. (2008). Making autocracy work. In E. Helpman (Ed.), Institutions and economic performance (pp. 452–510). Harvard: Harvard University Press.

    Google Scholar 

  10. Bird, R. M., Martinez-Vazquez, J., & Torgler, B. (2008). Tax effort in developing countries and high income countries: The impact of corruption, voice and accountability. Economic Analysis & Policy,38(1), 55–71.

    Article  Google Scholar 

  11. Boix, C., & Stokes, S. C. (2003). Endogenous democratization. World Politics,55(4), 517–549.

    Article  Google Scholar 

  12. Brennan, G., & Buchanan, J. M. (1980). The power to tax: Analytical foundations of a fiscal constitution. Cambridge: Cambridge University Press.

    Google Scholar 

  13. Calo-Blanco, A., & García-Pérez, J. I. (2013). On the welfare loss caused by inequality of opportunity. Journal of Economic Inequality,12(2), 221–237.

    Article  Google Scholar 

  14. Chen, K., & Liu, Q. (2015). Economic development and corruption in China in the shadow of rent seeking. In R. Congleton & A. Hillman (Eds.), Companion to the Political Economy of Rent Seeking (pp. 395–409). Cheltenham: Edward Elgar.

    Google Scholar 

  15. Choi, I. (2001). Unit root tests for panel data. Journal of International Money and Finance,20(2), 249–272.

    Article  Google Scholar 

  16. Congleton, R. (2019). The political economy of rent creation and rent extraction. In R. Congleton, B. Grofman, & S. Voigt (Eds.), The Oxford handbook of public choice (Vol. 1). Oxford: Oxford University Press.

    Google Scholar 

  17. Congleton, R., & Lee, S. (2009). Efficient mercantilism? Revenue-maximizing monopoly policies as Ramsey taxation. European Journal of Political Economy,25(1), 102–114.

    Article  Google Scholar 

  18. Cooley, T. F., & Ohanian, L. E. (1997). Post-war British economic growth and the legacy of keynes. Journal of Political Economy,105(3), 439–472.

    Article  Google Scholar 

  19. Diamond, L. J. (1994). Rethinking Civil society: Toward democratic consolidation. Journal of Democracy,5(3), 4–17.

    Article  Google Scholar 

  20. Do, Q., & Campante, F. R. (2009). Keeping dictators honest: The role of population. Research collection school of economics. Retrieved June 25, 2017 from

  21. Dung, P. (2018). Tăng kịch trần thuế môi trường xăng dầu: Lãnh đạo Bộ Tài chính nói “không bị phản ứng” [Increases in environmental protection tax rate for petroleum: The Representative of Vietnamese Ministry of Finance said ‘No opposition from citizens’]. Dantri. Retrieved June 10, 2018 from

  22. Fukuyama, F. (1989). The end of history. The National Interest, No. 16 (Summer 1989), pp. 3–18.

  23. Fukuyama, F. (2001). Social capital, civil society and development. Third World Quarterly,22(1), 7–20.

    Article  Google Scholar 

  24. Fukuyama, F. (2011). The origins of political order: From prehuman times to the French revolution. New York: Farrar, Straus and Giroux.

    Google Scholar 

  25. PPWG, GPAR, & Gencomnet. (2016). Vai Trò của các Tổ Chức xã Hội dân sự trong phát triển kinh tế, xã hội và văn hóa Việt Nam [Roles of Civil Society Organizations in cultural, social, and economic development of Vietnam]. Retrieved JUne 10, 2018 from

  26. Gilson, R. J., & Milhaupt, C. J. (2011). Economically benevolent dictators: Lessons for developing democracies. The American Journal of Comparative Law,59(1), 227–288.

    Article  Google Scholar 

  27. Giovanni, P., Cama, G., & Seghezza, E. (2015). Democracy, extension of suffrage, and redistribution in nineteenth-century Europe. European Review of Economic History,19(4), 317–334.

    Article  Google Scholar 

  28. Grossman, H. I. (1994). Production, appropriation, and land reform. The American Economic Review,84(3), 705–712.

    Google Scholar 

  29. Heinrich, V. F. (2005). Studying civil society across the world: Exploring the Thorny issues of conceptualization and measurement. Journal of Civil Society,1(3), 211–228.

    Article  Google Scholar 

  30. Herb, M. (2005). No representation without taxation? Rents, development, and democracy. Comparative Politics,37(3), 297–316.

    Article  Google Scholar 

  31. Hillman, A. L., & Ngo, L. (2019). Rent seeking: The social cost of contestable benefits. In R. Congleton, B. Grofman, & S. Voigt (Eds.), Oxford Handbook of public choice (pp. 489–518). Oxford: Oxford University Press.

    Google Scholar 

  32. Hoa, N. T. (2019). How large is Vietnam’s informal economy? Economic Affairs,39(1), 81–100.

    Article  Google Scholar 

  33. Holcombe, R. G. (2017). Political incentives for rent creation. Constitutional Political Economy,28(1), 62–78.

    Article  Google Scholar 

  34. House, Freedom. (2017). Freedom in the World 2017. Washington: Freedom House.

    Google Scholar 

  35. Kuznets, S. (1955). Economic growth and income inequality. The American Economic Review,45, 1–28.

    Google Scholar 

  36. Lambsdorff, J. G. (2002). Corruption and rent-seeking. Public Choice,113(1–2), 97–125.

    Article  Google Scholar 

  37. Le, T. (2018). Đề xuất thu thuế tài sản: ‘Người thu nhập thấp càng thêm gánh nặng’ [Proposals for property tax: ‘low-income citizens get more burdens’]. Vneconomy. Retrieved June 10, 2018 from

  38. Lü, X., & Landry, P. F. (2014). Show me the money: Interjurisdiction political competition and fiscal extraction in China. American Political Science Review,108(3), 706–722.

    Article  Google Scholar 

  39. McGuire, M. C., & Olson, M. (1996). The economics of autocracy and majority rule: The invisible hand and the use of force. Journal of Economic Literature,34(1), 72–96.

    Google Scholar 

  40. NESDB, & JHU/CCSS. (2011). Non-profit Institutions Satellite Account of Thailand, 20062008 Edition (ISSN 2228-9119).

  41. Nguyen, K. G., Nguyen, Q. T., & Nguyen, T. T. (2017). Does growth in non-profit institutions improve government transparency? A case study from Vietnam. Asia & the Pacific Policy Studies,4(2), 286–295.

    Article  Google Scholar 

  42. OECD. (2016). Promoting productivity and equality: A twin challenge. OECD Economic Outlook,14(1), 59–84.

    Article  Google Scholar 

  43. Olson, M. (1965). The logic of collective action: Public goods and the theory of groups. New Haven: Yale University Press.

    Google Scholar 

  44. Olson, M. (1993). Dictatorship, democracy, and development. The American Political Science Review,87(3), 567–576.

    Article  Google Scholar 

  45. Paldam, M. (2002). The cross-country pattern of corruption: Economics, culture and the seesaw dynamics. European Journal of Political Economy,18(2), 215–240.

    Article  Google Scholar 

  46. Paldam, M. (2003). Economic freedom and the success of the Asian tigers: An essay on controversy. European Journal of Political Economy,19(3), 453–477.

    Article  Google Scholar 

  47. Pallas, C. L., & Nguyen, L. (2018). Transnational advocacy without northern NGO partners: Vietnamese NGOs in the HIV/AIDS sector. Nonprofit and Voluntary Sector Quarterly,47(4), 159–176.

    Article  Google Scholar 

  48. Pasquier-Doumer, L., Oudin, X., & Thang, N. (2017). The Importance of household business and informal sector for inclusive growth in Vietnam. Vietnam Academy of Social Sciences and the French National Research Institute for Sustainable Development.

  49. Peltzman, S. (1980). The growth of government. Journal of Law and Economics,23(2), 209–287.

    Article  Google Scholar 

  50. Ringen, S. (2016). The perfect dictatorship: China in the 21st century (Reprint ed.). Hong Kong: Hong Kong University Press.

    Google Scholar 

  51. Salamon, L., & Anheier, H. (1999). Civil society in comparative perspective. In L. M. Salamon (Ed.), Global civil society: Dimensions of the nonprofit sector. Baltimore: The Johns Hopkins Center for Civil Society Studies.

    Google Scholar 

  52. Tang, T., Mo, P. L. L., & Chan, K. H. (2016). Tax collector or tax avoider? An investigation of intergovernmental agency conflicts. The Accounting Review,92(2), 247–270.

    Article  Google Scholar 

  53. Teets, J. C. (2013). Let many civil societies bloom: The rise of consultative authoritarianism in China. The China Quarterly,213, 19–38.

    Article  Google Scholar 

  54. Thayer, C. A. (2009). Vietnam and the Challenge of Political Civil Society. Contemporary Southeast Asia,31(1), 1–27.

    Article  Google Scholar 

  55. United Nations. (2008). International Standard Industrial Classification of All Economic Activities (ISIC), Rev. 4. New York: United Nation Publication.

  56. Vietnam Government Office (2017). Regulations on conditional business lines

  57. Vietnamese Ministry of Finance. (2017). Tờ trình Đề nghị xây dựng Luật sửa đổi, bổ sung một số điều của Luật thuế giá trị gia tăng, Luật thuế tiêu thụ đặc biệt, Luật thuế thu nhập doanh nghiệp, Luật thuế thu nhập cá nhân và Luật thuế tài nguyên (dự án Luật) [Report on the Law’ Project on Proposing the Law amending and supplementing some articles of Law on Value Added Tax, Law on Special Consumption Tax, Law on Corporate Income Tax, Law on Personal Income Tax and Law on Natural Resource Tax].

  58. Vietnamese Ministry of Finance. (2018) Tờ trình Về đề nghị xây dựng dự án Luật thuế tài sản [Report on the proposal for building a project on Property Tax Law].

  59. VTV24. (2017). VAT thấp có lợi cho người giàu hơn người nghèo [Low VAT rates are more beneficial to the rich than the poor]. VTV News. Retrieved 10 June, 2017 from

  60. Vu, T. T. A. (2017). TS Vũ Thành Tự Anh phản bác lập luận ‘tăng VAT không ảnh hưởng đến người nghèo [Dr. Vu Thanh Tu Anh disputes the argument that ‘VAT increases do not affect the poor”]. VnExpress. Retrieved 10 June, 2018 from

  61. Vu, H. (2018). Bộ trưởng Tài chính: Thuế tài sản là để phòng chống tham nhũng, thu ngân sách là thứ yếu [Vietnamese Minister of Finance: Property tax is to prevent corruption, increases in budget revenue are not the main purpose”]. Thanhnien Newspaper. Retrieved 10 June, 2018 from

  62. Way, L. (2014). Civil society and democratization. Journal of Democracy,25(3), 35–43.

    Article  Google Scholar 

  63. White, H. (1980). A heteroskedasticity-consistent covariance matrix estimator and a direct test for heteroskedasticity. Econometrica,48(4), 817–838.

    Article  Google Scholar 

  64. Wischermann, J., Bunk, B., Köllner, P., & Lorch, J. (2016). Do associations support authoritarian rule? Tentative answers from Algeria, Mozambique, and Vietnam. GIGA Working Paper, 295.

  65. Wooldridge, J. M. (2002). Introductory econometrics. Massachusetts: The MIT Press.

    Google Scholar 

  66. World Bank. (1993). The east asian miracle: Economic growth and public policy. New York: Oxford University Press.

    Google Scholar 

  67. World Bank. (2014). Inequality in Vietnam: A special focus of the taking stock report July 2014key findings. Feature Story. Retrieved 10 June, 2018 from

  68. Zhang, C. (2018). Nongovernmental organizations’ policy advocacy and government responsiveness in China. Nonprofit and Voluntary Sector Quarterly,47(4), 723–744.

    Article  Google Scholar 

Download references


We would like to thank the Co-Editors and the reviewer(s) at Constitutional Political Economy for their thoughtful and detailed comments on our paper. We also would like to thank Nguyen Hong Ngoc (School of Economics, University of Queensland) for helping us proofread earlier versions of our manuscript. Particularly, we would like to express our gratitude to Professor Roger Congleton (Department of Economics, West Virginia University) for his arduous support. The views expressed in this article are the authors’ personal findings and do not necessarily reflect the policies and positions of Oxfam.

Author information



Corresponding author

Correspondence to Thai Q. Nguyen.

Additional information

Publisher's Note

Springer Nature remains neutral with regard to jurisdictional claims in published maps and institutional affiliations.

Rights and permissions

Reprints and Permissions

About this article

Verify currency and authenticity via CrossMark

Cite this article

Nguyen, T.Q., Nguyen, G.K. The impacts of civil society and inequality on the extractive capacity of authoritarian regimes: a conceptual model and the case study of Vietnam. Const Polit Econ (2020).

Download citation


  • Extractive capacity
  • Rent extraction
  • Leviathan model
  • Civil society
  • Inequality
  • High-performing autocracy
  • Vietnam

JEL Classification

  • C79
  • H39
  • P45