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Trade openness and household welfare within a country: A microeconomic analysis of Vietnamese households

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  • Le, Minh Son
Abstract
The positive effects of trade liberalisation on several dimensions of poverty have initiated studies of the trade–poverty relationship. Trade liberalisation accompanies institutional reforms that help to reduce institutional barriers against the poor. This study examines the impacts of trade openness and institutional reforms on rural household welfare at the provincial level through the analysis of the determinants of welfare of rural households in Vietnam. The study employs a model of micro-determinants of growth and tests it on the data from the Vietnam Household Living Standards Surveys (VHLSSs) of 2006 and 2010. What makes the study different from some other studies of the same vein is that it attempts to directly capture the institutional effect on welfare. The study finds that, in the provinces with high institutional reforms and trade openness, the welfare of rural households improved. Institutional reforms in Vietnam appeared to be sluggish in the late 2000s. In particular, both access to land and lower informal charges were the important determinants of welfare improvement over time. These findings suggest that Vietnam should maintain its development by accelerating the process of institutional reforms, thereby helping poor households to improve standards of living.

Suggested Citation

  • Le, Minh Son, 2014. "Trade openness and household welfare within a country: A microeconomic analysis of Vietnamese households," Journal of Asian Economics, Elsevier, vol. 33(C), pages 56-70.
    • Handle: RePEc:eee:asieco:v:33:y:2014:i:c:p:56-70
    DOI: 10.1016/j.asieco.2014.05.005
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    References listed on IDEAS

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    Cited by:

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    2. Thang T. Vo & Dinh X. Nguyen, 2021. "Impact of Trade Liberalization on Household Welfare: An Analysis Using Household Exposure-to-Trade Indices," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 153(2), pages 503-531, January.
    3. Difei ZHAO & Zhenyuan LIU, 2015. "Analysis of the agriculture trade openness impact on the rural household's food consumption in China," Agricultural Economics, Czech Academy of Agricultural Sciences, vol. 61(10), pages 461-474.

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    More about this item

    Keywords

    Trade openness; Institutional reforms; Welfare; Rural household; Vietnam;
    All these keywords.

    JEL classification:

    • O12 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Microeconomic Analyses of Economic Development
    • O17 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Formal and Informal Sectors; Shadow Economy; Institutional Arrangements
    • O24 - Economic Development, Innovation, Technological Change, and Growth - - Development Planning and Policy - - - Trade Policy; Factor Movement; Foreign Exchange Policy
    • P36 - Political Economy and Comparative Economic Systems - - Socialist Institutions and Their Transitions - - - Consumer Economics; Health; Education and Training; Welfare, Income, Wealth, and Poverty

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