Vietnam in the Global Economy.

• Author: Brown, David
• Position: Book review

Vietnam in the Global Economy. By Thomas Jandl. Boulder, Colorado: Lexington Books, 2013. Hardcover: 299pp.

To the surprise of most contemporary observers, Vietnam's doi moi reforms succeeded brilliantly. Abandoning a disastrous decade-long experiment with central planning, in 1986 the Hanoi regime opted for "market socialism", an odd amalgam that allowed domestic entrepreneurs and foreign investors to colonize the spaces not filled by Soviet-style state-owned enterprises (SOEs). Reform began raggedly, but the disintegration of the Soviet bloc left Hanoi with no option but to push forward. Led by labour-intensive export industries, Vietnam averaged around 7 per cent annual growth in GNP between 1990 and 2006. Per-capita dollar incomes rose by eight times.

What's not so obvious is why the reforms succeeded. Current scholarship, notably David Elliott's Changing Worlds: Vietnam's Transition from Cold War to Globalization (2012) as well as Thomas Jandl's new study, reveals doi moi to have been a desperate leap in the dark. Contemporary analysis did not offer great hope. Dependency theory forecast that the economy would continue to bump along the bottom while dodgy foreign investors and local elites split whatever rents--chiefly timber and minerals--could be easily harvested. Theorists of the East Asian development model regarded Vietnam as insufficiently Confucian--there was no honest and visionary elite able to take on and tame systemic corruption. Liberal economists looked in vain for civil institutions able to call leaders to account and compel a relatively efficient sharing of national wealth. The World Bank and the IMF were persistent, vocal skeptics.

"Success was serendipitous", Professor Thomas Jandl of American University concludes (p. 265) after a close look at disaggregated data on investment flows, internal migration, per capita income, tax revenues and the like. His Vietnam in the Global Economy is a largely successful effort, drawing on harmony of interest theory, to explain what happened--? Vietnamese elites restrained a natural tendency toward predation, reducing rent-seeking to a level that did not frighten off foreign investors and provided "good enough governance"--and to suggest why.

Jandl examines the behaviour of different groups of actors for evidence of cooperation in the pursuit of win-win outcomes. In successive chapters he draws four conclusions. First, political and business elites in cities/provinces with strong...