Rethinking the Political Economy of Conservative Transition: The Case of Vietnam

The transition 'from plan to market' under a politically conservative regime in Vietnam, where the communist party remains in power, can be seen as an example of a process in which evolving endogenous forces drove and resourced institutional change. Two sets of phenomena are analytically important. The first may be understood as the creation and seeking out of economic rents in the 'neo-classical' sense of resources available 'below economic costs'; the second, more 'classical', concentrates upon the central importance of 'appropriable resources'. These two are both important because, in trying to understand emergent capitalism after transition, they push to the fore the historical emergence of factor markets (land, labour and capital). Social networks created during transition for 'rent-switching' later support advantageous access to resources created for plan implementation and may then, as a form of capitalism emerges, be used to access resources in forms appropriate to market-oriented activity. It becomes clear that 'rent-switching' may have effects upon static economic efficiency that are positive during transition but negative afterwards, so that the significance of 'rents' depends upon context.