Thesis Public Defense | VNP24 Nguyễn Võ Hoàng

The impacts of budget policy on economic growth of cities and provinces of the Mekong River Delta
(2005-2018)

Student: Nguyễn Võ Hoàng, VNP 24

Supervisor: Dr. Trương Đăng Thụy

Abstract:

We conduct this study in order to evaluate the impact of budget policy on Vietnamese economic growth. However, due to the limit of time, this paper limits the scope of the study to the 13 Mekong Delta provinces from the period 2005 to 2018.

According to the definition of capital expenditure, we believe that if the proportion of State expenditure is highly concentrated on capital expenditure would cause positive impacts on economic growth. Hence, the first goal of our study is to test whether or not the higher share of local government capital expenditure cause a positive impacts on economic growth of cities and provinces of the Mekong River Delta. Secondly, we also test if the higher share of local government own source revenue cause a positive impacts on economic growth of cities and provinces of the Mekong River Delta. However, in Vietnam, the index of the size of local revenue is not considered a good indicator of decentralization. Nowadays, local revenue has always been imposed by the Central government; therefore, it does not reflect correctly the local autonomy. Therefore, in this study we are more interested in the allocation of local government’s budget on capital expenditure to analyze the effect of capital expenditure on economic growth.