Vietnam's Model of Market Socialism: Development Model in Crisis?

Abstract

This paper examines Vietnam's model of market socialism and aims to fill the gap in the existing literature by analysing the challenges facing this model of development. The paper argues that while Vietnam's market socialism emerged as a response to the failure of classical socialism and with its help Vietnam has achieved significant successes including high economic growth, poverty reduction, and rising living standards. However, it lacks a theoretical foundation, which threatens its sustainability. The model faces a development model crisis due to the corruption of the current governance system and the inefficiency of state-owned enterprises (SOEs), perpetuated by political institutions. The paper reviews the historical and theoretical debate on market socialism and assesses its successes and challenges in promoting economic growth and reducing poverty. By applying the approach of historical and institutional analysis, the paper provides insights for policymakers and scholars interested in understanding the strengths and weaknesses of market socialism in practice. The paper emphasizes the need for alternative models such as the social market model, to address the crisis in Vietnam's development model.