Strengthening public administration reform to improve institutions for market economy with socialist orientation in Vietnam

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Vietnam has been developing a Market Economy with Socialist Orientation (MESO). Strengthening public administration reform (PAR) can be an effective tool in improving institutions for MESO in Vietnam. This paper analyzes conceptual and practical issues related to PAR with reference to international experiences.

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Nội dung Text: Strengthening public administration reform to improve institutions for market economy with socialist orientation in Vietnam

Strengthening Public Administration Reform to Improve Institutions for Market Economy with Socialist Orientation in Vietnam Dinh Van An ABSTRACT Vietnam has been developing a Market Economy with Socialist Orientation (MESO). Strengthening public administration reform (PAR) can be an effective tool in improving institutions for MESO in Vietnam. This paper analyzes conceptual and practical issues related to PAR with reference to international experiences. Key words: market economy with socialist orientation, public administration reform, Vietnam. Introduction As a contribution to implementation of the above-mentioned political tasks and reform agenda, Recognizing the importance of developing this paper will focus on analysis of conceptual and institutions for Market Economy with Socialist practical issues related to PAR in Vietnam with Orientation (MESO), the 10th Congress of the reference to international experiences. The paper Communist Party defined that Vietnam shall covers five topic areas and serves as the basis for urgently "reform the state's institutions and modes recommended solutions to direct the PAR to best of functioning and improve the institutions for serve the improvement of institutions for MESO in market economy with socialist orientation" regarding Vietnam. these works as important renovations and focal tasks in the coming time. 1. PAR should be seen as an In order to implement the 10th Party's integral part of the institutional Congress Resolution, the Prime Minister issued reform, development and Decision No. 136/2001/QD-TTg on the 17th improvement of MESO September 2001, adopting the Comprehensive Public Administration Reform (PAR) Agenda for Both internationally and domestically, there 2001-2010 period, and recently, stipulated Decision are various definitions of public administration No.30 QD-TTg on the 6th of February 2006, reform, depending on the political, economic and approving the Proposal on Streamlining social context of each country, as well as the Administrative Procedures in the public sector for perspective and objective of research. Nevertheless, 2007-2010 period, in which PAR is determined one it is commonly agreed that PAR is a planned of the three priority political tasks in 2007 and for change, based on one or a number of specific the 2007-2010 period. objectives, and conducted by authorized public Dinh Van An, Ph. D in Economics, President of the Central Institute for Economic Management, Vietnam. Volume 2 - Number 2 - 2008 Vietnam Economic management review 11 PDF created with pdfFactory trial version www.pdffactory.com
VEMR ECONOMIC POLICY DEBATE Strengthening Public Administration Reform to Improve Institutions ... agencies to make this system become more It is obvious that PAR, does not mean the effective and responsive to the needs of the people, same as the institutional reform in a narrow sense organizations and businesses. PAR typically as agreed by a number of scholars in some countries, comprises four components: (i) institutional reform (referred to as "regulatory reform"), but is at least (in the narrow sense); (ii) reform of organization of an important, integral part of economic institutional administrative apparatus and public service; (iii) reform, in both broad and narrow sense. Only such public finance reform; and (iv) reform and a definition could help move away from simplification, modernization of administrative procedures. merely focusing on streamlining administrative The comprehensive PAR agenda for 2001- procedures but neglecting reform of policy and 2010 period also articulates four key elements of legal framework, organization and personnel, and Vietnam's public administration reform, namely so on. institutional reform; organizational reform of the administrative machinery; renovation and 2. Developing and improving improvement of the public service quality; and economic policies and legal frame- public finance reform. work should be regarded as a According to Hoang Phe (1992), institution, in a regular, continuous job, based on narrow sense, is defined as "the regulations and renovation of both mindset and rules of a social regime that everybody is subject methodology for the whole process - to". The authors of Ministry of Science and from issuance and implementation Technology (2005) define institution as "the way arrangements to evaluation and the society establishes its frameworks and orders, adjustments or abolishment involving the relationships among people and The institutional reforms mentioned in the mechanisms, regulations, powers and rule that Comprehensive Public Administration Reform operate the society". As such, both economic Agenda in Vietnam is per se reforms of the policy institutions in general and the institutions for MESO and legal system, of which the first and foremost in Vietnam in particular involve the following three are the economic policies and legal framework. For key components: not only the transitional economies like China or - The rules that form the economic "rules of Vietnam, but also the traditional market economies, the game", including the economic legal frame- including the members of Organization for work and social rules and norms on/or related to Economic Cooperation and Development (OECD). the economy, including informal rules or norms as The improvement of laws and policies and well; improvement of the business environment is - The entities playing the economic "game", always identified as a regular, ongoing work of the including state economic agencies and administrations, State to enhance efficiency and competitiveness of businesses, professional associations, the communities the economy, in order to adapt to the context of and the people; and ever-deepening globalization and international - The mechanisms and enforcement that economic integration. Australia is a good example. operate the "rules of economic game", including the Being an OECD member with a developed market mechanisms of market competition, economic economy, in mid 2006 the Australian Government management decentralization, division, cooperation, officially launched new institutional reforms participation, monitoring and accountability. with broad participation of the governmental and 12 Vietnam Economic management review Volume 2 - Number 2 - 2008 PDF created with pdfFactory trial version www.pdffactory.com
Strengthening Public Administration Reform to Improve Institutions ... ECONOMIC POLICY DEBATE VEMR non-governmental organizations, under the direct a wise and selective way. For example, both the EU leadership of the federal and individual state and US require that the promulgation and enforcement government; in some states a dedicated agency of enterprise law be conducted in a transparent way, working on institutional reform has been set up without discrimination so as to facilitate business under the Government Office (the state of Victoria management. Countries adopting a market economy set up "The better regulation office" under the model have promulgated company laws, which direct leadership of a dedicated minister. have evolved over years with similar stipulations Being a transitional economy, Vietnam needs on organization and operation of limited liability or to not only be more active and prompt in development joint stock companies. Failure to study these and improvement of economic laws, but more stipulations for selective incorporation into importantly, make profound changes both in mindset Vietnam's Enterprise Law would make the latter and implementation methodology. ineffective. The MESO that Vietnam has been developing Socialist orientation is a unique characteristic is new, unprecedented form of market economy. of the market economy in Vietnam. For this reason, Therefore, while sharing common features of a while respecting the "common" by inheriting the modern market economy, the development and common values of human kind, it is necessary to operation of Vietnam's economy is characterized build on the practical situation in conducting by specificities that derive from its socialist Vietnam's administrative and institutional reforms orientation, as clearly pointed out in the 9th Party so as to ensure the socialist orientation of the Congress Resolution, "as a set of economic economy. settings which is subject to the rules of the market As pointed out in the Party's Resolutions, the economy and at the same time governed by the socialist orientation of the market economy in principles and nature of the socialism". Vietnam is manifested by the goal of "rich people, In the context of economic globalization and strong country and equal, democratic and civilized the increasing pro-activeness and openness for society"; by building up the multi-stakeholder more in-depth economic integration, Vietnam's economy, in which the state's economy plays a MESO institutions need to have all the common dominant role, and the state's and collective features, criteria and requirements of a modern economy are becoming a solid foundation of the market economy. Vietnam can identify these in national economy; the realization of social order to be pro-active and responsive by referring progress and equity in each step and policy of international experiences in developing the market economic development and growth; and by the role economy and implementing integration commitments, in economic regulation and management of the with special attention to the ones under WTO, and ruled-by-law state under the leadership of the the criteria of the "market economy status" for Communist Party". Vietnam as required by the European Union (EU) On the basis of these new thoughts, it is and the United States (US). important to renovate the method of institutional Therefore, the development and improvement of reform. In this respect, the international experience the market economy institutions in Vietnam would drawn by Jacob et al. in USAID (2007) is noteworthy. be most effective and rapid if the experiences of According to which, a successful reform process economic legislation in other countries are learnt in typically looks like the following model (Figure 1). Volume 2 - Number 2 - 2008 Vietnam Economic management review 13 PDF created with pdfFactory trial version www.pdffactory.com
VEMR ECONOMIC POLICY DEBATE Strengthening Public Administration Reform to Improve Institutions ... Figure 1: Model of successful administrative reform process Source: USAID (2007). As illustrated in the model above, the countries 3. Renovations of mandate, organization pay significant attention to the mandate and and operational mechanism of methodology of Regulation Impact Assessment the government are a crucial (RIA), seeing it as a decisive factor to be undertaken pre-requisite for success of the by both government bodies and independent consulting public administration reform and development and improvement of organizations in development, promulgation and MESO institutions in Vietnam implementation of laws. It is also important to take In a market economy, the government is care of both development of new regulations and defined as the highest administrative executive documents (filtering before tanking) and deregulation, body. Therefore, in public administration reform, review, revision, amendment or removal of documents the first and foremost thing to do is to reform the no longer appropriate (cleaning the tank). Government. In the last twenty years of 14 Vietnam Economic management review Volume 2 - Number 2 - 2008 PDF created with pdfFactory trial version www.pdffactory.com
Strengthening Public Administration Reform to Improve Institutions ... ECONOMIC POLICY DEBATE VEMR economic renovation (Doi moi), the Government Secondly, the Government needs to be has changed significantly in both its mandate and reformed to perform better in both functions of organizational structure, and its operational state administration and serving socio-economic mechanism, increasingly responsive to the development through reforming and improving development of the MESO in Vietnam. However, strategic planning and policy making in order to research and reviews of the public administration mobilize and utilize the country's resources in an reform also reveal a number of shortcomings: the effective manner, providing public services and Government assumes too many functions; the public management services, including management machinery is cumbersome, lacking effectiveness and investment of the state's capital. and efficiency; mandates, functions and organization Thirdly, the Government should handle structures of ministries and ministry-like agencies effectively the relationship between market and are not clear and still problematic; division of labor planning, and the one among state, market and and coordination within the Government, among society. The key difference between the market the ministries and between the Government/ economy with socialist orientation and the one with ministries and local governments is also unclear, free competition lies in the "reasonable" combination nor concrete or scientific. Especially, the of the market and planning. While fully respecting mechanism of "the Party leads, the Government the role of market in allocation of resources and manages and the People masters" needs further regulation of economic activities with business research and improvement. nature, the Government should have a clear plan as to how far the market will be opened, and what In this context, further renovation of the specific policies are needed for sensitive sectors or Government's mandate, duties, organizational structure the state natural monopolies such as land, electricity, and operational mechanism is required. The purpose water, insurance, health, education and training… of this process is to strengthen the Government's The socialist orientation of the economy should be capacity and performance to meet the needs of the realized based on the state investment policies and country's development of MESO. To this end, plans to ensure sustainable development, social research is required to clarify the following: equity security. Domestic and international practices Firstly, it is necessary to confirm that the show that state resources, even in the centrally- renovation and improvement of the Government is planned periods have been limited, therefore the an integral part of the renovation course for Government should be able to tap potential and development of a socialist rule-of-law state under the resources in all economic sectors and social leadership of the Government. Under this system, organizations, including professional associations the Party leads the directions of national development, and non-governmental organizations. the socialist rule-of-law state defines clear and Fourthly, in the Government's organization scientific division and coordination between structure, apart from ministries in the foreign legislation, execution and justice; the National affaires and national security sectors as present in Assembly - the most powerful body - focuses on all countries, other ministries in the socio-economic legislative function; the Government is the highest sector should be re-organized, re-structured so as administrative authority: on execution; the to both fit the practical context of Vietnam and be Supreme Court and Supreme Procuracy are the compatible with partner countries to meet the highest judicial bodies, playing an independent and integration requirements. The organization apparatus objective role in litigation procedures. and staff of ministries should be strong enough to Volume 2 - Number 2 - 2008 Vietnam Economic management review 15 PDF created with pdfFactory trial version www.pdffactory.com
VEMR ECONOMIC POLICY DEBATE Strengthening Public Administration Reform to Improve Institutions ... assume the functions of administration, policy- 4. Improved capacity building for making and provision of public services. For public service to meet the individual ministries in particular and the demand of the market economy is Government in general to have sound foundations a decisive factor for the success for implementation of their mandates and functions, it of the public administration is necessary to have a system of research and reform to serve the institutional advisory as well as independent, objective regulatory development of the MESO and monitoring agencies that are strong enough in There is no doubt about the decisive role of place. In the context of a transitional, multi-stakeholder the human factor for success or failure of doing economy with an increasing size and deeper integration, things. While the role of the Party and the to continue renovation and sustain rapid growth it Government in training and improving expertise is necessary to give an emphasis on the role of a and ethics of the public service in the past years is "Chief Commander in renovation and development" undeniable, it should be noted that the current agency of the Party and the State, including the public service is not yet capable of meeting the Government. requirements of a clean and strong government and Fifthly, the Government's operation mecha- the development of a MESO in Vietnam. At present, nism should be renewed in a way so as to have a Vietnam lacks people who have knowledge and clear definition of mandates and functions of min- expertise of the market economy, therefore it is istries and a close coordination between ministries; difficult to do well all the jobs of strategic planning, strengthening at the same time decentralization to development of plans and development policies as local governments and reformed planning. well as a management mechanism for the market economy. It is urgent to provide refresher training A clear definition of mandates and to the current public servants to meet the immediate functions of ministries and a close coordination needs and successfully implement the Socio- among ministries will help overcome the overlap Economic Development Plan for 2006-2010 period, as well as the "gap" in functions among the and at the same time strengthening training of the Government's agencies. Strengthened decentralization future human resources beyond 2010. The training to local governments in law execution arrangements contents need to be renewed to cover not only the does not only help the government to be closer to knowledge of the modern market economy but also the people, more responsive to the people's needs be specific to each type of public servants. but also helps bring into full play the Officials from minister, provincial party initiatives/pro-activeness and emulation of the secretary and people's committee chairman rank local governments. Maintaining while improving upward should be equipped not only with the planning work, which is appropriate for the market knowledge necessary for a politician, but also the economy, will help not only ensure the socialist knowledge of development economics, public and orientation of the economy but also bring into play macroeconomic policies of the market economy. the positive aspects of the market economy, To overcome the "meritocracy disease" caused by making the latter more dynamic, fixing the the short-term nature of the official position, shortcomings of the previously centrally planned promotion of these personnel should not be based economy. merely on the high economic growth achievements 16 Vietnam Economic management review Volume 2 - Number 2 - 2008 PDF created with pdfFactory trial version www.pdffactory.com
Strengthening Public Administration Reform to Improve Institutions ... ECONOMIC POLICY DEBATE VEMR or some impressive works in designated enterprises and public service providers such as ministries/localities. research institutes, hospitals, schools and so on. Therefore, new ways of thinking about the Officials from vice-minister rank downward and mandates and role of the Government and the policy makers should be experts, who have relationship between the Government, the market acquired training in the modern market economy and the civil society as described above should knowledge and immersed in the country's development serve as the basis for renewing thoughts, defining reality, especially the renovation and transition which public finance activities are to be undertaken from the centrally planned economy to the market in accordance with the centrally-planned mechanism economy. and which ones follow the market mechanism. In Policy and law executive officers, including such a way, Vietnam will make public finance to those charged with providing public administrative better link with and serve the improvement of the services should be trained and equipped with MESO in Vietnam. knowledge of laws and policies and have a serious Realizing the public administration reform attitude towards observing laws and regulations. policy of the Party and the Government in these Together with education and training for five major directions will definitely help the public improvement of competence and conducts/ ethics administration reform be better linked with and of the public service, it is also important to pay due serve the development and improvement of the attention to mechanisms for performance assessment, MESO in Vietnam. r reward and punishment, bonus and promotion… Only through such policies can the public administration reform be successful and provide References: good support to improvement of the market economy n Communist Party of Vietnam, Documents of the institutions in the country. Party's 9th and 10th Congress, The National Politics Publisher. Hoang Phe (editor) (1992), Vietnamese 5. Public finance reform should be n Dictionary, Bach Khoa Publishing House, linked with and provide support Hanoi. to improvement of the MESO n MOHA (2005), "Comprehensive Public institutions Administration Reform Programme 2001-2010". In a simplified way, public finance reform n Ministry of Science and Technology (2005), does not seem to have any direct relation to Institutions for the Market Economy with development and improvement of the market Socialist Orientation in Vietnam, Major Report of KX 01.06, National-level Science and economy institutions, as public finance has long Technology Project 2001-2005. been seen as the state finance, directly linked with n Pham Quoc Thai (2005), "Government Reform the patronage system. Nevertheless, in market following WTO Accession", Chinese Studies conditions, the concept and notion of public Journal. finance has been renewed and broadened. The state n USAID (2007), "Improving Policy Environment budget does not only pay for operation of the state in Vietnam: Using the "Trimmer" Tool to machinery but also development investment, Streamline Regulations", Report by Jacobs et al. including business/production projects or state-owned at a workshop in April 2007 at CIEM. Volume 2 - Number 2 - 2008 Vietnam Economic management review 17 PDF created with pdfFactory trial version www.pdffactory.com