Breaking Up the Collective Farms

The de-collectivization of Vietnamese agriculture was a crucial step in the country's transition to a market economy. The assignment of land-use rights had to be decentralized and local cadres ostensibly had the power to capture this process. We assess the realized land allocation against explicit counter-factuals. Depending on the region, we find that 95-99 percent of maximum aggregate consumption was realized by a land allocation that generated lower inequality overall, with the poorest absolutely better off. We attribute this outcome to initial conditions at the time of reform and actions by the centre to curtail the power of local elites. Copyright (c) The European Bank for Reconstruction and Development, 2004.

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