The impact of corruption on provincial development performance in Vietnam

Abstract

Corruption has long been considered a national illness in Vietnam but progress in fighting corruption has been modest. In recent years, the Communist Party of Vietnam and the Government of Vietnam have strengthened their efforts to prevent and fight corruption. Despite strong anti-corruption measures being implemented at the national level, provincial authorities have shied away from tackling corruption. One of the reasons for this could be that it is not clear to provincial authorities if and how corruption is affecting local development economically and socially. This article demonstrates that corruption has a negative impact on private sector investment, employment and per capita income at the provincial level in Vietnam. However, corruption is found to have no significant impact on how income is distributed across provinces. The findings demonstrate that more effective anti-corruption measures are necessary to promote the private sector and improve household income. The study provides provincial leaders with empirical evidence and incentives for fighting corruption.