Industrial policy reforms for political risk management? Understanding the evolution of automotive industrial policies in Vietnam

Abstract

ABSTRACT This paper discusses how outward-oriented industry policies are made or changed in Vietnam, an illiberal state facing a rapidly liberalizing global economy, using the case of Vietnam’s automotive sector as a spearhead sector for industrialization. It provides a new perspective by highlighting collective concerns among state elites in Vietnam, a relevant but relatively overlooked factor in understanding key industrial policy reforms in Vietnam. Specifically, this study argues that the positional characters of Vietnam as an illiberal non-major state in the international asymmetrical liberal order help us see when policy reforms, particularly in outward-oriented industries, are likely to be initiated and in what forms or in what directions changes can be made. Drawing on conceptual discussions of conflicting concerns among the illiberal state elites governing developing countries in a liberalizing global economy, this paper discusses how closely major policy reforms in automotive sector are aligned with elites’ interests in reducing these dual concerns in a balanced way.