The Interrelationship between Formal and Informal Decentralization and Its Impact on Subcentral Governance Performance: the Case of Vietnam

Thanh Thuy Vu, Messaoud Zouikri and Bruno Deffains

CESifo Economic Studies, 2014, vol. 60, issue 3, 613-652

Abstract: Formal and informal institutions are often viewed as complements or substitutes in empirical and theoretical studies. In this article, we find no evidence of complementary or substitutive relationships in our empirical analysis of the relationship between formal and informal decentralization across 64 provinces in Vietnam. Instead, the formally decentralized system of public goods and service provision accommodates the informal one, and informal decentralization in public order provision tends to compete with the existing and ineffective formal system. This implies that the central government needs to reorganize the decentralized provision of public order and public goods and services to make informal institutions complements to rather than competitors of or free-riders on formal institutions.(JEL codes: D73, H11, H73, H83, K00)

Date: 2014
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Related works:
Working Paper: The Interrelationship between Formal and Informal Decentralization and Its Impact on Sub-Central Governance Performance: the Case of Vietnam (2014)
Working Paper: The Interrelationship between Formal and Informal Delcentralization and its Impact on Sub-Central Governance Performance: The Case of Vietnam (2012)
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