chapter  8
20 Pages

Governance for harmony: challenges for public service delivery reform in China and Vietnam

Introduction The processes of economic reform and growth in China and Vietnam are bringing with them huge social and economic transformations. Spectacular growth and the social and political consequences of market-generated wealth creation are accompanied by growing inequality, increasing urbanization, new kinds of risk and insecurity for vulnerable groups and a variety of associated tensions and dislocations. Forms of protection and security that were associated with the command economy have been undermined and replaced by new modes of welfare provision and new kinds of citizen entitlements. For most people, access to benefits is no longer connected with stable membership of local work units but is increasingly the product of other factors: self-reliance or community selfhelp; a history of compulsory contributions linked to employment; or a claim based on ‘ability to pay’. In this context, fundamental issues are being raised about the role of the state in social provision in a ‘socialist market economy’ and about how to create new forms of harmonious, state-society synergies that will sustain the development projects of these two countries. Under state socialism, the role of the state in social provision and protection was limited and ambiguous, because much of the responsibility for collective welfare devolved directly on the shoulders of the productive, wealth-generating sector (state-owned enterprises, collectives and other production units) rather than on the state budget proper. This responsibility was largely delegated to the work unit – in China, the danwei – which performed vital social support roles. In the command economy, the state claimed its legitimacy from successfully managing and directing the key productive sectors of the economy, which in turn provided for those members of society who were directly engaged in them. But with the nexus between the state and workplaces fractured as a result of marketization, new questions about the performance legitimacy of the state in social provision have emerged. Self-reliance and ‘user-pays’ have been dominant themes under the transformations accompanying economic reform. The Chinese government has aggressively pursued socialization and marketization of welfare services during the reform era, and in Vietnam similar (if somewhat less radical) policies of ‘indi-

vidualization of social rights’ (Wong 2002) have been pursued. But, the state’s responsibility for regulating and assuring the conditions for collective welfare – work safety, the environment, the provision of affordable health care, unemployment relief and so on – cannot be entirely avoided. The recent re-focusing of leadership attention in China on the quality and accessibility of health and other public services has acknowledged the need to resolve some of the tensions of growing inequities and breakdowns in service provision. Success on these fronts is a critical challenge facing these governments. The focus of this chapter is on the state’s role of regulating, monitoring and managing the financing and provision of a range of social and public services. It is assumed as a starting point that the ‘social contract’ between the reformed Vietnamese and Chinese states and their citizens in a market economy will include some level of responsive, efficient and equitable intervention in the financing, direct provision or regulation of public goods. The discussion leaves aside questions of what is or is not a ‘collective’ good or a ‘public’ service, or of which particular service is best provided or financed by government, the market or the non-profit ‘third sector’, respectively (Ramesh 2002; Cheng, S. 2001; World Bank 2005a). The argument does not rest on any particular conception of the right ‘mix’ of public and private funding or provision of goods and services. However, I do assume that modes of governance in these fields of funding and provision should be capable of generating equitable outcomes that fulfil basic social needs. Public services in China and Vietnam are by and large the responsibility of lower levels of government or have devolved to local social and ‘para-state’ organizations, so recent programmes of decentralization are a major part of the analysis. The main contention is that the current strategies for sustaining and developing capacities for the provision of collective (public) goods in Vietnam and China rely too much on ad hoc decentralization in a multitude of forms and not enough on coherent, effective and accountable systems of public provision which harmonize the various roles of state (both central and local), society and market. In the next section, I develop this last point at a conceptual or general level and argue the need for developing a system of ‘governance for harmony’ in order to achieve effective service delivery reform.