EIJS Working Paper Series,
Stockholm School of Economics, The European Institute of Japanese Studies

Abstract: Although it remains a one-party state, Vietnam has become one of the most popular host countries for multilateral and bilateral aid donors during the past decade. Vietnam¡¯s popularity is largely explained by the fact that it perceived as a good aid recipient, and it has often been identified as a ¡°best practice¡± example of how a government can manage external aid and own its development agenda. The purpose of this paper is to discuss the roots of Vietnam¡¯s strong ownership and to examine how the relations between the state and the donor community have influenced Vietnamese development planning. The first part of the paper highlights the uneven relation with the Soviet Union during the 1970s and 1980s as an explanation for the present ambitions to avoid dependence on foreign partners. The second part outlines the institutional setup for development planning that was created to match the existing institutions for central planning during the 1990s. The third part discusses the ongoing changes in the role of the state and in the institutional setup for development planning. The process of change is illustrated using the Comprehensive Poverty Reduction and Growth Strategy as an example. The paper concludes that donors have contributed both directly and indirectly to the changes in the Vietnamese model of economic planning, and that the donor community has to some extent taken on the roles played by civil society and a political opposition in parliamentary democracies.

Keywords: Vietnam; development planning; ODA

JEL-codes: O19; O21; P21

28 pages, June 1, 2007

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