Does WTO Accession Help Domestic Reform? The Political Economy of SOE Reform Backsliding in Vietnam

Conventional wisdom holds that international trade agreements canserve as a source of external pressure and credible commitment to overcomeopposition and to lock in domestic economic reforms. This belief, however,underestimates the ability of politicians not only to circumvent these pressures,but to leverage international trade agreements to advance their own policypreferences – preferences that may be highly anti-reformist. Thus, tradeagreements do not necessarily induce reforms and, in certain circumstances, theycan even be counterproductive. Through an analysis of aggregate data and 40interviews with senior politicians, government officials, and state-ownedenterprise managers in Vietnam, this paper illustrates these insights by analyzingthe political economy of SOE reform backsliding on the eve of Vietnam'saccession to the WTO.

Policy Research
Date Published:
Oct 20, 2016

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