Abstract
Vietnam is one of many countries presently undergoing fundamental institutional change: the market mechanism is replacing central planning. So far, the achievements are impressive. In the mid-1980s, the country failed to feed its population, suffered from hyperinflation and faced general economic stagnation. In the early 1990s, the annual economic growth rate had accelerated to some eight to nine percent, the inflation rate had fallen to two-digit levels — sometimes even lower — and the country had become one of the world’s largest rice exporters. Add some more details — the increased foreign trade, the inflow of foreign investments, the diversification of agriculture, and the various reform measures taken to alter the basic economic structure — and the success story of the Vietnamese transition is told. The country has hence followed the same path as its northern neighbor China, and provided a counterexample to much more cumbersome processes that have been adopted in a number of other transforming countries, notably those of the former USSR.
"If you want to become a doctor, practice in a war; if you want to become an economist, practice in Vietnam".
Phan Van Tiem
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Notes
Chairman of the State Committee of Prices in Hanoi, in February, 1991.
The book builds on Román (1995). Recent developments in the Vietnamese economy and the financial system are accounted for (in section 3 of this chapter, and in chapters III to VI). However, the theoretical discussion (Chapter II) has not been up-dated.
The approach is in the tradition of new institutional economics. The definition of institutions follows North (1990).
The distinction is put forth by Milgrom & Roberts (1992).
Williamson (1985), Chapter 6.
Milgrom & Roberts (1990). 7Kornai (1986, 1992).
Social capital is really another term for the institutions that govern people’s possibilities to interact; it includes the authority relations, relations of trust and consensual allocations of rights which establish norms for people’s relationships with each other (Coleman, 1990, Chapter 12).
The study approximately concerns the 1991-1994 period. The bulk of the interviews were made in September 1991 to January 1992, complemented by interviews in late 1992 and in late 1993.
In the spirit of, for example, Putnam (1993), who traces differences in development between Italian regions to their differences in social capital, which in turn is a product of differences in governance structures established in the 12th century (where powerful monarchies ruled in the now more backwards regions, as opposed to a kind of communal republics in the presently more prosperous ones).
A useful introduction to the Vietnamese culture is provided by Jamieson (1993).
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© 1999 Springer Science+Business Media New York
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Román, L. (1999). Introduction. In: Institutions in Transition. Springer, Boston, MA. https://doi.org/10.1007/978-1-4615-4981-9_1
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DOI: https://doi.org/10.1007/978-1-4615-4981-9_1
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