The Vietnam Capital Management and Budgeting Case Study

Introduction

The normative framework for capital public management and capital budgeting processes is recommended to have four components: (1) long-term public capital planning, (2) capital budgeting and financial management, (3) project execution, and (4) infrastructure maintenance. In the United States, this framework is widely adopted and used by state and local governments (Ermasova, 2013a, 2013b). The application of the four components results in efficiency and effectiveness in public investment (Srithongrung, 2008). However, there is limited knowledge as to how the normative framework is globally practiced. Government practices are also influenced by country-specific factors including economic, political, legal and managerial situations (Srithongrung, 2010). The purpose of this chapter is to fill in this gap by illustrating Vietnam’s capital management and budgeting processes in comparison with the normative framework. The chapter also reviews Vietnam’s contextual factors that potentially influence their capital management and budgeting practices. The first section describes Vietnam’s socio-economic and political background. The second introduces Vietnam’s infrastructure system and its challenges. The third section compares Vietnam’s capital and management practices to the normative framework, and the final section analyzes and discusses any implications or associated consequences.