The relationship between institutional quality and Vietnam’s economic growth
DOI:
https://doi.org/10.63783/dla.2025.057Keywords:
institutional quality, Worldwide Governance Indicators, GDP growth, VietnamAbstract
This study examines the relationship between institutional quality and Vietnam’s economic growth during the period 2002 - 2023, based on the World Bank’s Worldwide Governance Indicators (WGI). A regression model is employed to test the impact of both the composite WGI and its six institutional quality components on GDP growth. The results indicate that the composite WGI has a negative and statistically significant effect at the 5% level. Among the six dimensions, government effectiveness, regulatory quality, and control of corruption exhibit an inverse relationship with economic growth. This finding reflects a common feature of transitional economies, where initial improvements in institutional quality may increase compliance and restructuring costs, leading to slower short-term growth. Nevertheless, such improvements constitute a necessary foundation for achieving sustainable long-term economic growth.
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