Over the past two decades, no two economies have averaged more rapid economic growth than China and Vietnam. But while China's income inequality has risen rapidly over that same time frame, Vietnam's has only grown moderately. Structural and socio-cultural determinants fail to account for these divergent pathways. Existing political variables are also unhelpful. China and Vietnam are coded in exactly the same way, even in the path-breaking work on authoritarian regimes. In this paper, we take a deeper look at political institutions in the two countries, demonstrating that profound differences between the polities directly impact distributional choices. In particular, we find that Vietnamese elite institutions require construction of broader coalitions of policymakers, place more constraints on executive decision making, and have more competitive selection processes. As a result, there are stronger political motivations for Vietnamese leaders to provide equalizing transfers that limit inequality growth.
What's fair when it comes to setting the terms of market access? The rules of the World Trade Organization (WTO) were meant to answer this question, as well as settle disputes surrounding it. On these grounds, it was also sold as the best means to open markets, encourage economic development, and facilitate economic exchange between countries, large and small—in effect, lifting all boats. Yet now, some ten years later, the organization is facing a tidal wave of charges regarding the uneven power of its member countries and persistent barriers to exchange. Some of the most vocal critics hail from the developing world. Their frustration over unequal market access, agricultural subsidies, and the inability "to right the rules" of trade culminated in disruption of the 1999 WTO meetings in Seattle, the collapse of WTO talks at Cancun in 2003, and the cautious optimism over recent gains in Geneva. At issue is whether the rules of international trade are being used to hold up or push ahead prosperity in the developing world.