Institutions and Inequality in Single-Party Regimes: A Comparative Analysis of Vietnam and China

Despite the fact that China and Vietnam have been the world’s two fastest growing economies over the past two decades, their income inequality patterns are very different. In this paper, we take a deep look at political institutions in the two countries, demonstrating that profound differences between these polities influence distributional choices. In particular, we find that elite institutions in Vietnam encourage the construction of broader policy-making coalitions, have more competitive selection processes, and place more constraints on executive decision-making than exists by way of elite institutions in China. As a result, there are stronger political motivations for Vietnamese leaders to provide equalizing transfers that limit inequality growth among provinces.