Influence of New Countryside Construction Program on household welfare: Evidence from the Mekong River Delta of Vietnam

Lai Thi Cam Phan
Vietnam National University Ho Chi Minh City (VNU-HCM), 71309, Ho Chi Minh City, Vietnam

Quang Thanh, Ngo
Institute of Policy and Strategy for Agriculture and Rural Development, Ho Chi Minh City, Vietnam

In developing countries, comprehensive rural developmen programs contribute significantly to exports and generate domestic demand for food as well as provide capital and labor for further industrialization and development. However, the efficacy of these programs remains in question. The National Target Program on New Rural Development, known as New
Countryside Construction Program, in Vietnam has been implemented since 2010 as a new policy initiative and approach to rural development with the following key objectives: (i) to improve rural infrastructure; (ii) to foster linkages between the agricultural sector and the industrial and service sectors, and between rural economies and urban economies; (iii) and to improve rural living standards in terms of economic, social, and environmental qualities. The current study uses commune fixedeffect and two-stages-least-squared regressions to estimate the effect of the New Countryside Construction Program on household welfare in The Mekong River Delta of Vietnam in two kinds of models: The small model contains only demographical variables and commune-level variables such as commune general conditions, and initial infrastructure conditions. The large models include additional variables of education, occupation, and commune-level variables as in the small model. Controlling
for the endogeneity of the New Countryside Construction Program variable, we find that New Countryside Construction Program has positive effects on household expenditure and the New Countryside Construction Program tends to prone to top 20 expenditure quintiles than to bottom 20 expenditure quintiles.

Key words:New Countryside Construction Program, household welfare, Mekong River Delta, Vietnam.

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