Leveled mountains and broken fences: Measuring and analyzing de facto decentralization in Vietnam.

In this paper, I probe the first node in the micro-logic of my theory studying the impact of FDI on de facto decentralization in Vietnam. Work by Pauline Jones-Luong and David Zweig on other transition states has left the tantalizing conjecture that the proliferation of foreign direct investment has empowered local leaders vis a vis the center. Whereas during strict central planning, the central government could use its monopoly to control scarce resources and expenditure distribution, now that foreign investment projects can be approved locally, regions have become much more financially independent. Both could have further argued, that in many cases, the central government is in fact dependent on the revenue gleaned from these investments in order to transfer to poorer regions and doesn’t dare rock the boat. If these authors are right that provinces are empowered by FDI, we should find initial evidence for local economic reforms, before lobbying begins for change at the central level. This paper tests whether there is evidence in that speculation. The methodology is an analytical narrative merging case study work on the political economic choices of Vietnamese central and local leaders, with a time-series statistical analysis. Vietnam is chosen, because it is understudied transition country, which has won recent plaudits for the success of it economic reform program. Nevertheless, there is sharp disagreement among analysts and Vietnamese leaders about whether the impetus for reform in Vietnam was bottom-up from the sub-national level or top-down from central leaders between 1986 and 2000. Moreover, Vietnam’s 61 provinces offer wide variance for hypothesis testing and categorization. FDI is tested against a measure of autonomy, derived from a content analysis of Vietnamese state owned newspapers between 1990 and 2000. Every time a province is cited for violating central laws on economic policy by engaging in reform experimentation it is recorded. Using this approach, I find strong preliminary evidence for the impact of FDI on local autonomy and economic reform. [ABSTRACT FROM AUTHOR]