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Microeconomic Impacts of Institutional Change in Vietnam’s Northern Uplands

Empirical Studies on Social Capital, Land and Credit Institutions

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Camille Saint-Macary

The Doi Moi reforms initiated in Vietnam in 1986 to lead the transition from a centrally-planned to a market-oriented economy have entailed deep institutional transformations. At the national level, achievements have been impressive, the high economic growth in all sectors of the economy have permitted to divide poverty incidence by three in the country since 1993. Mountainous regions and its inhabitants, however, have lagged behind in the process. There, the combination of poverty and the degradation of natural resources remains a pressing issue. Drawing on a conceptual framework that highlights the determinant role of institutions in the poverty-environment nexus, this book investigates the sources of success and failure in the current institutional framework to address objectives of equity, economic growth and environmental sustainability in Vietnam’s mountains. The empirical investigation uses an original dataset collected in a rural district and examines three critical dimensions: the definition of land rights, the functioning of credit markets, and the formation of social capital.
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7 Discussion and conclusions

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7. Discussion and conclusions

Vietnam’s upland regions have undergone important transformations during the last two decades. The transition of the country from a centrally-planned to a market-oriented system has entailed important institutional changes and a redefinition of the role of the state, markets and communities in allocating resources and organizing social and economic life.

While at the national level the reforms have permitted high economic growth rate and a drastic reduction of poverty, mountainous areas and its inhabitants, ethnic minorities, have lagged behind. In addition, the rapid population growth, combined with the intensification and expansion of agricultural production into fragile ecosystems have considerably increased pressure on natural resources, and accentuated the risk for the population to get trapped in vicious circle whereby poverty and environmental degradation mutually reinforce each other. Drawing on a conceptual framework that highlights the determinant role of institutions, in particular of land institutions, financial markets, and social capital in addressing the poverty-environment nexus, this thesis has investigated how the current institutional framework addresses challenges faced by mountainous people, and contributes to reduce poverty while enhancing environmental sustainability in the region.

In this perspective, this thesis first assessed the impact of Vietnam’s land titling policy on tenure security, on the adoption of soil conservation technologies and on the functioning of land market. Second, it investigated the functioning of the credit market and the role and impact of the rural credit policy in this market. Finally, this research estimated...

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