ABSTRACT
This chapter attempts to solve a puzzle that has dogged development scholars for at least two decades. The importance of human capital for development, most comparativists point to the unequal levels of human capital in Latin America and East Asia. The chapter discusses interpretative economics to provide an explanation of why there have been disparate degrees of political support for taxing elites and investing this increased revenue more equitably. It demonstrates that as a consequence of the social imaginary there has been a formidable anti-poor bias among politicians, bureaucrats, elites, and large segments of the middle and working classes that has resulted in insufficient investments in capacity-building, irrespective of political regime or macro-economic policy. The chapter shows that the relatively pro-poor values in Vietnam predated the tsunami-like macro-forces that traumatized East Asia in the twentieth century. Rural Vietnam is also widely regarded as the wellspring of Vietnamese culture and traditions.
