Abstract Can we make a plan for a whole country? This paper examines adjustments the socio-economic development planning process in the context of Vietnam -a developing and transitional country. The main research question is whether the comprehensive planning processes have substantially changed from the top-down approach of the past to an open and participatory one today. Can Vietnam&apos;s current planning process, which has been described as &apos;suited for the command economy&apos; (World Bank, 2005), fit into a global market economy or is there need for another approach? The paper analyses Vietnam&apos;s Five Year Socio-economic Development planning process within the three spheres: governance, management and participation. The paper concludes with a suggested planning approach for Vietnam

Mai Tuyet

Thi Vu

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 17
Mai, T. T. V. (2008). Comprehensive planning: 
Does it work? Experiences from Vietnam, JOAAG, 
Vol. 3. No. 2
 
 
 
 
 
 
 
 
Comprehensive planning: Does it work? 
Experiences from Vietnam 
 
 
 
Mai Tuyet Thi Vu1 
 
 
 
 
 
Abstract 
Can we make a plan for a whole country? This paper examines adjustments the socio-economic 
development planning process in the context of Vietnam - a developing and transitional 
country. The main research question is whether the comprehensive planning processes have 
substantially changed from the top-down approach of the past to an open and participatory one 
today. Can Vietnam’s current planning process, which has been described as ‘suited for the 
command economy’ (World Bank, 2005), fit into a global market economy or is there need for 
another approach?  The paper analyses Vietnam’s Five Year Socio-economic Development 
planning process within the three spheres: governance, management and participation. The 
paper concludes with a suggested planning approach for Vietnam. 
 
Keywords:  
 
 
 
 
 
 
 
 
 
 
 
 
                                                 
1 National Economics University, Hanoi, Vietnam. Email:  vtmaithan@yahoo.com  
 
 
 
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Mai, T. T. V. (2008). Comprehensive planning: 
Does it work? Experiences from Vietnam, JOAAG, 
Vol. 3. No. 2
Introduction 
Like most socialist economies of Europe and Asia, Vietnam followed the centrally planned 
model of the U.S.S.R. The central planning approach has been an ideology for the unitary state 
of Vietnam in the last few decades where the resource allocation was decided by the central 
authorities according to administrative plans. Originally, the plan was considered as a 
constitution for North Vietnam and for the whole country after unification (1975). The whole 
country followed the plan strictly in terms of what needed to be produced, and where and how 
many products were produced, etc.  The centrally planned economy contributed greatly to the 
development of Vietnam during the time prior to Doi Moi 1986 (renovation). It was possible 
and justified during the central planning period since national economic activities were 
conducted mainly by the state through collective ownership of means of production.  However, 
it has led to economic inefficiency and low quality of life. In 1985, Vietnam stated that it had a 
very low economy, with a GDP at 4.2 percent and low life expectancy at birth of 65 years2.  
Since the introduction of the Doi Moi (renovation) program, the government has implemented 
the public reform programs in which the reformative approaches have been applied to the 
national planning system. The GDP growth has been increasing during recent years (about 8 
percent per year during 1990-2005)3. The social indicators (poverty, life expectancy and 
literacy) have been improved.  However, these developments are unstable because: (1) the 
government balance sheet and domestic public sector debt indicators are still of concern 
(Vietnam National Assembly, 2006); (2) the gap between the rich and the poor is larger4; and 
(3) the voice and accountability to community in governance is still low5. These are great 
challenges to national and local authorities to look at their programs again, particularly the 
socio-economic development planning process.  
The questions raised in this paper are: Is Vietnam moving away from the comprehensive 
planning approach? Can Vietnam’s current planning process, which has been described as 
‘suited for the command economy’ (World Bank, 2005), fit into a global market economy or is 
there need for another approach? 
The paper is going to examine the Five Year Socio-Economic Development (FYSED) planning 
process in Vietnam. It analyses three spheres of the planning process: governance, management 
and citizen participation. In doing so, the paper seeks to contribute to a key debate in the 
literature on the developing and transitional country planning: whether the appeal of a top-
down approach has waned and gone away from comprehensive planning as some suggest (e.g., 
Agarwala, 1985), or whether planning remains in a centralized planning approach. The paper 
draws on interviews, focus groups, observations in local government districts of Hanoi and 
experiences working on World Bank and ADB projects in Vietnam.  
Vietnam’s experiences in the FYSED planning process 
Interviews with central government officers and local government officers in Vietnam indicate 
that the current planning system is a vertical and top-down approach (Figure 1).  
                                                 
2 Source: World Bank estimates based on Vietnam Living Standard Survey (VLSS) 1993. 1985 is the earliest 
year for which comparable economic data are available 
3 Source: Vietnam Statistical Yearbook 2005 
4 Source: Vietnam Statistical Yearbook 2005 
5 Source: The Worldwide Governance Indicators, the World Bank, 2006. 
 
 
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Mai, T. T. V. (2008). Comprehensive planning: 
Does it work? Experiences from Vietnam, JOAAG, 
Vol. 3. No. 2
The planning process starts with instructions and frameworks moving from central government 
down to lower levels of government. In the preparation of the recent 5-year plan (FYP), the 
planning work started two years in advance with discussions among central planning officials and 
sector agencies on issues to be addressed in the next plan. The central planning agency then 
proposed “ideas” for the next FYP at a national planning conference which was usually held one 
year in advance with participants from sector ministries and local governments. The Ministry of 
Planning and Investments prepares the draft framework or guidelines for the next FYP reflecting 
instructions issued by the Central Party Committee. The draft guidelines are sent to the State 
Council for approval. The central planning agency’s report at a later conference provides 
guidelines, methods and deadlines for sector and local plan submissions and thus sets the 
framework and the tone for the whole planning process.  
Figure 1.  Vietnam’s planning process 
 
Planning process -Governance context 
The last five year socio-economic development planning process reflects single party top-down 
governance.  The decisions of what to do and how to do it often come from the central 
government. The decentralization of authority to lower government levels is limited, as they 
have little independence on commanding issues without interference from the central 
government.  
Prime Minister 
Ministry of Planning and 
Investment 
Planning and Investment 
department at Provincial level 
Planning and Finance 
Department at District level People Committee and 
Sectors at District level 
Commune Level 
Notes:   Decrees of planning. 
   Draft plans 
   Guidelines and frameworks of planning  
People Committee and 
Sectors at Provincial level 
 
Central 
Province 
District 
Commune 
 
 
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Mai, T. T. V. (2008). Comprehensive planning: 
Does it work? Experiences from Vietnam, JOAAG, 
Vol. 3. No. 2
The central planning mechanism is one of the main coercive instruments that the central 
authority uses to exercise its power over local governments (Dieu hanh bang ke hoach). The 
central government controls all the ‘resources’ (Rhodes, 1999, p.80) of the local government 
such as mandatory powers, financial resources, political resources and informational resources.   
The vertical structure of Vietnam’s government and the top-down planning system made the 
coordination across and among sectors difficult. Each agency is under a certain administration of 
its own sector and works independently with the other agency at the same level. Although the 
Ministry of Planning and Investment consulted sector agencies when making the overall 
development plan, such consultations were aimed at putting the plans together rather than 
coordinating them6. In fact, there is no coordination mechanism built into the planning process. 
The coordination is getting worse at the lower level of the Planning and Investment Departments 
which are dependent on decisions from superior levels (i.e., approvals of investment projects 
and business plans). In addition, there is a lack of fiscal decentralization (i.e., provincial budget 
depends on central budget allocation) (Pierre, 2000). As a result, local governments are passive 
in capital resources and this leads to lack of linkage between budgeting and planning.  
 
Planning process – Management context 
In reality, the plan objectives of the five year socio-economic development plans in some district 
governments in Hanoi are still based on a top-down planned set of indicators. According to 
interviewees at central and local governments, the set of indicators such as GDP growth, 
education and health serve as indicative targets, except the targets for revenue raising and 
capital construction investment are considered as mandatory. The foundation for making a plan 
is based on the previous plans’ results and historic data. The current and future indicators listed 
in new plans need to exceed the indicators which were in the previous plans. Government 
officers set up targets and objectives based on what officers at higher levels of government say, 
otherwise they would be criticised for doing badly compared with the past. Therefore, the plan 
objectives are not a reflection of the real targets and objectives for achievement of 
socioeconomic development in planning units.  
Table 1. Current style planning – objectives and impacts 
OLD STYLE PLANNING           
  
IMPACT 
    
 - Not considered  
  ↑      
  OUTCOMES    - Not considered  
  ↑      
  OUTPUTS     - agriculture GDP grows by X%  
     - produce XX tonnes of rice  
     - rice yield 6 tonnes p.ha.  
  ↑       
 INPUTS    - provide improved seed, pesticides 
     - organise farmer training   
     - provide funds for farmer credit  
                                                 
6 Source: interviews with central and local planning officers 
 
 
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Mai, T. T. V. (2008). Comprehensive planning: 
Does it work? Experiences from Vietnam, JOAAG, 
Vol. 3. No. 2
 
This research shows that, in the current process, the objectives setting is weak and without 
linkage with particular indicators. As a result, their outcomes and impacts are not considered 
(Table 1). An illustration is provided by the 2001-2005 Five-Year Plan for the rural sector, 
one of the objectives was to increase agriculture production of rice to 33 millions tons and in 
order to achieve this target, and the government invested a certain amount of money on inputs 
but without indicating its impacts and outcomes on employment and environment. Even more 
surprising is to find, among the long list of targets, one for the poverty rate, supposed to reach 
10 percent by 2005. How this could be accomplished, or how this particular target related to 
the other, production-oriented ones, was unclear and/or was not included. In addition, planning 
priorities and solutions are intentionally drawn in plan outputs despite lacking strategic analysis.   
This research shows that there are no available analytical techniques and planners lack the skills 
for planning tasks. This makes it hard for plans to cope with the dynamic complexity of the 
economic environment by remaining up-to-date, relevant, and comprehensive. Moreover, the 
data system and information is hard to access due to the data collection mechanism and 
decentralization7. The main sources of data are from the survey of the General Statistics Office 
which is decentralized under the administration of the central government. Therefore, the data 
was collected with a certain purpose of the central government and it was not able to be used 
by other agencies and for other purposes.  
Planning Process-participation and spheres 
Vietnam’s vertical and top-down links between different levels of government make it harder to 
listen to the public at the bottom of the pyramid during plan preparation. As shown in Figure 1, 
the main sources of making a plan are from decrees, frameworks and guidelines from the higher 
level. The lower level has to listen to these sources first before conducting any stage of the 
planning process8. This leads to time wasted and constraint for the lower level. As a result, local 
plans are rarely debated among the public before they are submitted to higher level 
governments for approval. The situation improved during last (2005-2010) FYP period at the 
national level, but did not fundamentally change at the county and municipal level, where 
consultations with local stakeholders are especially important.  
Despite the adoption of the Regulation on Exercise of Democracy in Communes 1998 and 
requirement of Prime Minister in the Decree No 33/2004, there is no participation of grass-
roots people in the process of planning development. In fact, there is no informing and 
involving of the main stakeholders or the most affected communities in the planning process.  
The People’s Councils are lawfully the people’s representatives, but their roles of approving and 
monitoring the development plans are formal and most investment decisions are taken by top 
executive authorities at the People’s Committee and higher government levels.  
There are two directions of communication between central and local government but the 
strongest is from the higher level to the lower level. Lower levels communicate with the higher 
levels through sending reports and plans without hearing feedback and comments directly and 
sitting in on discussions or workshops. The higher level communicates with the lower level 
through sending decrees, directives and guidelines and they are considered as commands to the 
                                                 
7 Source: Interviews with planners at Hanoi 
8 Source: interviews with local planning officers 
 
 
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Mai, T. T. V. (2008). Comprehensive planning: 
Does it work? Experiences from Vietnam, JOAAG, 
Vol. 3. No. 2
lower level. The planning officers may attend the workshops of the lower level to give 
comments to the lower level9. The drafts of plans sent to the higher level of government are just 
a requirement. These restrict understanding of the higher level of government among the lower 
level and or on both sides of the other’s position enabling agreement to be reached. So central 
government cannot understand what is realistic. These lead to token efforts to finish up and 
submit plans without much attention10. 
Conclusion 
Vietnam’s planning system is still based on a vertical, top-down approach under a unitary 
system. The lower level plans are sub plans of the national plan. In other words, it is still a 
comprehensive plan. 
The comprehensive plan was possible for the closed system with highly centralized and collective 
ownership. In the dynamic global environment, comprehensive planning is static without flexible 
practices and would not meet the demands of change.  
Applying a strategic planning approach would overcome the pitfalls in the current planning 
process. It involves building and sharing visions (governance), diagnosing current environments 
and alternating strategic courses of action (management) (Bryson, 1989), and enhancing 
participation (democracy) (Jones, 1996; Brody, Godschalk and Burby, 2003).  
Governance 
Politically, strategic planning is hampered by the need to set new indicators that do not make 
the past achievements look inadequate, because the new planning indicators need to be matched 
to the old plans and an argument needs to be made as to why past goals were not achieved. 
Thus it is very difficult for bureaucrats to ensure that senior officers do not set low limits to 
ensure easily achievable goals and to ensure political success. There is thus a temptation for 
planning bureaucrats to set limited goals.  
Figure 2. Planning process loop 
 
 
 
 
 
 
 
 
 
   
 
     
 
 
 
                                                 
9 Interviews with local government officers at Hanoi 
10 Interviews with planners 
Vision
Mission
Goals
Specific objectives 
Targets for action
Measures against 
outputs and outcomes 
Action PlansIndicators
 
 
 23
Mai, T. T. V. (2008). Comprehensive planning: 
Does it work? Experiences from Vietnam, JOAAG, 
Vol. 3. No. 2
 
 
Management 
The strategic planning process defined above, the loop process (Figure 2), enables comparison 
of the outputs and outcomes against the indicators and checking the action plans. The objectives 
of the plan are set up based on the diagnosis of the current situations with different techniques 
such as SWOT analysis (Bryson, 1989).    
Participation 
One way for resolving the participatory problems is conducting consultation on the planning 
process, which would allow better coordination and implementation of development activities. 
Strategic planning can help with the visioning, where a community of people come together to 
wrestle with strategic questions about what can be done, how it can be done and why do it. 
Vision is the critical element that gives life, breath, and meaning to the mission statement, the 
core values, and the strategic plan. The visioning concept of strategic planning is critical to 
public agencies and governing bodies because of the need to involve the public and numerous 
stakeholders in any planning process. Public officials can use visioning as a means of furthering a 
strategic conversation among citizens and stakeholders about the kind of society and future they 
wish to build. In so doing, officials not only carry out their administrative responsibilities but also 
contribute to the democratic well-being of their constituents. The strategic planning process 
enables participation and accountability to citizens by involving them in the process (Hughes, 
1994). 
 
 
References 
Agarwala, R. 1985. Planning in developing countries, Finance & Development, Vol.22, pp.13-
16. 
Brody, D. S., Godschalk, R. D, & Burby, J. R. 2003. Mandating citizem participation in plan 
making: Six strategic planning choices, Journal of American Planning Association, vol. 69(3), pp. 
245. 
Bryson, J. 1989. Strategic Planning for Public and Non-profit organizations, San Francisco: Jossey-
Bass. 
Hughes, E. O. 1994. Public Management and Administration: An Introduction, St. Martin’s Press, 
New York. 
Jones, B.E. 1996. Strategic planning in government: The key to reinventing ourselves, Program 
Manager, vol. 25(1), pp. 12-15. 
Pierre J (Ed). 2000. Debating Governance, Authority, Steering and Democracy, Oxford 
University Press. 
Rhodes, R A W. 1999. Control and power in central-local government relations, Aldershot and 
Brookfield, Vermont: Ashgate. 
 
 
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Mai, T. T. V. (2008). Comprehensive planning: 
Does it work? Experiences from Vietnam, JOAAG, 
Vol. 3. No. 2
World Bank, 2004. Vietnam Development Report 2005: Governance, World Bank, Hanoi, 
Vietnam.  
Vietnam National Assembly, 2006. The 10th meeting of the 11th National Assembly, Hanoi. 
Retrieved 26th October 2006, http://www.na.gov.vn/. 
 
 


Comprehensive planning: Does it work? Experiences from Vietnam

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