By April L. Raphiou
Halfway around the world, the expertise of a Duke University political economist was front and center at two global launches last week.
Eddy Malesky, Duke Center for International Development director and professor of political economy, helped launch the 2020 Vietnam Provincial Governance and Public Administration Performance Index (PAPI) Report on April 14 and the 2020 Vietnam Provincial Competitiveness Index (PCI) Report on April 15.
A United Nations Development Program (UNDP) initiative since 2009, the annual PAPI survey analyzed 14,000 responses from Vietnamese citizens on their experiences with government policies and services. As one of the PAPI architects, Malesky has advised the research team on methodology for the past 12 years.
Since 2005, Malesky has also served as principal investigator on the PCI, a joint U.S. Agency for International Development (USAID) and Vietnam Chamber of Commerce and Industry project that involved a survey of over 10,000 foreign and domestic firms on the business environment and economic governance in Vietnam.`
During the PCI launch, U.S. Ambassador to Vietnam Daniel J. Kritenbrink said, “The PCI over the past 16 years has played an important role in promoting transparency and accountability in provincial economic governance in Vietnam, facilitating private economic development, thereby promoting Vietnam’s competitiveness in the international arena.”
Malesky delivered remarks at the two launches virtually because of Covid-related travel restrictions. “I am excited about these opportunities to continue leading policy research and reform in one of Asia’s top-performing economies,” said Malesky. “The PAPI and PCI pave the way for improved economic governance and accountability in Vietnam. Furthermore, the PCI provides a clearer understanding of the country’s domestic and foreign investment environment.”
At the PAPI launch, Malesky highlighted survey findings on the drivers of internal migration. “The strongest factor in wanting to migrate is having family outside the province, since it may be easier to find jobs and access local services near family. Climate change—flooding, sea-level rises and salination—is also an important factor in migration decisions.”
“Compared to permanent residents, migrants typically have lower incomes and fewer assets, and they tend to be female and young,” added Malesky. “Given that migrants don’t interact with local officials in their provinces as much as permanent residents, their ratings of local officials tend to be lower than permanent residents’ scores.”
According to Malesky, a mass exodus of migrants impacts the governance rankings of provinces. “Provinces with greater out-migration appear to rank higher than they would otherwise, because disappointed people are leaving, while provinces that receive large numbers of migrants look worse because migration puts extraordinary pressure on local finances and bureaucratic capacity.”
During the PCI launch, Malesky focused on the changing landscape of foreign investment in Vietnam. “Due to the U.S.-China trade war, Vietnam has become an increasingly important link in the production chain of goods,” noted Malesky. “When we asked foreign investors what attracted them to Vietnam, across every indicator from less corruption to fewer regulatory constraints to lower tax rates and better infrastructure, foreign investors rated Vietnam’s business environment more positively than any year before.”
“There is also a clear recognition among policy makers and investors that businesses play an essential role in promoting clean growth and environmental actions,” added Malesky. “Regulatory pressures such as increased inspections and compliance criteria are going to be more successful for foreign firms interested in the Vietnamese market, whereas social pressure is much more important for Vietnamese firms interested in foreign markets.”
He continued, “Overly regulating firms can cause problems that keep them from being able to engage in their core competency. On the other hand, climate change and environmental pollution are critical factors facing Vietnam. So, the goal should be quality of regulation and quality of implementation and compliance.”