ABSTRACT
During the period when Vietnam operated a Soviet-style command economy, the state controlled all major sectors of the economy. It decided what to produce to achieve national and social objectives, what resources to use and how to distribute all production materials and consumer goods. The absence of a price system led to great inefficiency as consumer preferences, shortages and surpluses were not known with enough accuracy to co-ordinate production efficiently. The pervasive state control also led to a myriad of regulations and administrative requirements that stifled initiative and innovation, not to mention rent-seeking that produces massive deadweight losses to the economy.
