Enhnacing the efficiency of decentralization of public investment management in Thai Nguyen Province

MASTER. NGO NGAN HA (Thuongmai University)


Public investment plays an important role in Thai Nguyen Province’s development. It does not only contribute to promote the provincial socio-economic but also support the provincial infrastructure development and boost the labor productivity. Besides achieved encouraging results, public investment in Thai Nguyen Province still exists many limitations, especially a low investment efficiency. The inadequacy in decentralization of public investment management between the central government and local government is one of main resasons for this issue. This paper presents the limitations and causes in the decentralization of public investment management in Thai Nguyen Province. Based on the paper’s findings, some recommendations are proposed to enhnace the efficiency of decentralization of public investment management in Thai Nguyen Province in the coming time.

Keywords: public investment, decentralization, Thai Nguyen Province.


1. Introduction

Thai Nguyen is a northern midland and mountainous province. Total public investment capital reached 7637.3 billion VND in 2020. Over the years, public investment in Thai Nguyen Province has made great economic contributions which improved the quality of local people’s lives. In order to increase the efficiency of public investment, local government has focused on improving public investment management decentralization. Therefore, the decentralization of public investment management in Thai Nguyen Province during the time has changed positively, especially promoting the dynamism, creativity, autonomy and self-responsibility of the authorities at all levels.

However, in general, the decentralization of public investment management in Thai Nguyen Province has not met the requirements of reality yet and revealed many limitations such as promulgating in legal documents, state legal policies on decentralization of public investment management are not synchronized, lack of consultation of local organizations and people. Besides, allocation of capital sources is spreading; planning the public investment to lower governments has the existence of equilibrium; public investment decisions are still subjective and appraisal methods are limited. In addition, the implementation of public investment projects of the local government has many inadequacies and lack of competitiveness in bidding. Common project adjustment does not pay attention to the issue of operation.

In the scope of this article, through secondary data, this research focus on analyzing the situation of decentralization of public investment management and proposing solutions to improve decentralization of public investment management in Thai Nguyen Province.

2. Situation of public investment in Thai Nguyen Province 

The growth rate of public investment capital:

Public investment capital in Thai Nguyen Province tends to grow unstably in the period from 2014 - 2020. It is worth noting that public investment capital decreases gradually, with an average decline rate of 2.4% / year. However, from 2017 onwards, public investment capital has risen again with a growth rate of 13.7% / year. This is due to that the local government has well implemented the policy that analyzing and promoting the restructure of public investment, reengineering state-owned enterprises in the direction of divesting capital in industries, sectors which are not directed by the Government of Vietnam.

The structure of public investment capital:

In the period from 2014 - 2020, public investment capital from the state budget accounted for a very large proportion in the structure of public investment capital, by an average of 65.6%. Even in 2018, 2019 and 2020, the public investment capital from the state budget accounted for more than 90% of the total public investment capital. This capital source is mainly formed from the State budget's revenues through the collection of taxes, fees, charges, selling resources, etc. The structure of public investment capital is shown in the following chart:

3. Achievements and limitations of decentralized public investment management in Thai Nguyen province

Through the transfer of authority and responsibility for public investment management from the central government to local government, decentralization of public investment management in Thai Nguyen Province has achieved the following results:

Firstly, decentralization of public investment management has created the initiative for localities in socio-economic development, actively exploited internal resources and partially limited the conception of depending on the budget of upper level for local socio-economic development. At the same time, it reduces the burden on state management agencies at the provincial level. It creates favorable conditions for departments of the province to spend time and human resources advising on major policies and important decisions on local socio-economic development.

Secondly, the decentralization of public investment management has improved the lives of local people and promoted the local socio-economic development. The decentralization of public investment management has facilitated to complete many important tasks, many works, project which directly affects the economic development of the locality.

The infrastructure has been gradually upgraded. Transportation infrastructure has developed dramatically over the years. Transportation infrastructure system connecting regions is increasingly completed and it’s convenient for trading... In 2020, Thai Nguyen Province had a total of about 13,132 km of roads including 1 highway Hanoi - Thai Nguyen, 1 front-line Thai Nguyen - Cho Moi expressway, the national highway has 5 routes: National Road 7, National Road 1B, Highway 3, National Highway 17, National Highway 3C and National Highway 37; Road 229 has 6 routes with a total length of 184.4 km; 21 provincial roads are 435.8 km long; 73 district roads with the length of 791.66km; 1,315 km of communal and inter-commune roads, etc., thus promoting economic growth in Thai Nguyen Province, creating favorable conditions for non-state economic sectors to develop and improve people's lives.

The irrigation infrastructure system which was enhanced has significantly contributed to promoting the development of agriculture and rural areas and basically satisfying the water demand for the tertiary industry and urban areas. Many urban infrastructure projects such as transportation, water supply, drainage, lighting, greenery, solid waste collection and treatment have been renovated, upgraded and newly constructed. Besides, it’s necessary to restructure the agricultural sector in the direction of increasing added value which is associated with building a new countryside and reorganizing production. Changing the structure of crops and animals towards the high-value productions and creating the link between farmers - businesses - scientists – managers are obvious to be considered. In addition, government needs to implement a few projects such as forming areas specialized in the production of safe vegetables, expanding acreage areas, and increasing high-value aquaculture products.

In the period from 2014 - 2020, the provincial and district authorities in Thai Nguyen Province spent 1741.4 billion VND to invest in the development of health infrastructure including 14 provincial hospitals have been renovated and upgraded, basically building more than 20 nursing and functional rehabilitation hospitals and district clinics. The provincial and district authorities in the province have launched a program which solidifies schools and more than 3,000 standard classrooms were solidified. This leads to the improvement in the quality of education and the local socio-economic development.

Technology infrastructure is built widely and modernly. Information network rapidly develops with wide coverage, connecting with large throughput to areas in the country. Media and technology which become disseminated are applied in many fields, as the result they contribute to the increase of the province's GRDP.

From these achievements of decentralization of public investment management, the quality of people’s lives has been significantly increased, at the same time the people's responsibility for the community supervision and the protection of investment projects in the area has also been raised markedly.

Although the decentralization of public investment management in Thai Nguyen Province in the period of 2014 - 2020 has achieved positive results, there are still some limitations that need to be resolved, including:

Firstly, the decentralization of public investment management in Thai Nguyen Province is almost entirely delegated to the provincial and district levels (especially the work of approving, appraising and making public investment decisions). While the issuance of investment decisions is still arbitrary, the inspection and supervision of authorities at all levels are sometimes formal and administrative, so the macro adjustment of decentralized investment management lacks effectiveness.

Secondly, the fiscal discipline in the decentralization of public investment management is not really strict. And the central government still "satisfy the demand" to fill the capital needs for the provincial level, and the provincial level does for the districts. The allocation of budget between the levels is getting transparent. However, the criteria and norms of decentralized capital allocation for public investment management still have many shortcomings. Besides, the localities at lower levels have not really been proactive in mobilizing capital. The situation of reliance on the assistance of the provincial level is common.

Thirdly, in the process of decentralization public investment, many projects have not met the requirements yet. Many items and constructions are of poor quality, often degraded after being put into use. Besides, many projects which are completed have not been accepted by local people such as the public sanitation on the central road of Thai Nguyen City, many cultural houses in the wards…

The above-mentioned limitations stem from many different reasons including:

- Objective reasons:

Firstly, the State's decentralized viewpoint. In spite of emphasizing the policy of decentralization, increasing dynamism, creativity, autonomy, and self-responsibility of the local government, the current main viewpoint is still to strengthen centralization and unification in politics and state management. The specific manifestation of this ideology is the principle of "decentralizing from top to bottom" so decentralization to the local government is still not really thorough.

Secondly, the policy has not synchronized. Adopting the same policy in most provinces has made the local government less flexible in resource mobilization and the local government can’t develop innovative policies. The fiscal decentralization has been expanded, but it has not kept up with and synchronized with the content of public investment management decentralization. The local government is assigned a lot of authority and responsibility in public investment management, but the revenue and expenditure are not expanding proportionally so the local government is ineligible to implement the assigned works.Finally, there is a lack of regulation guidelines to implement the investment management decentralization. Currently in Vietnam, there are no particular documents relating to the public investment management decentralization, and the guidelines are scattered in many different legal documents. This leads to obstacles in monitoring and launching.

- Subjective causes:

Firstly, the transparency of information in the public investment management decentralization is not at a high level. According to the PAPI data over the years, the proportion of local people who are not aware of land-using plans (in which lands are used to build public constructions and projects). That leads to the difficulties for people to approach the public investment programs in order to give opinions as well as to check and supervise the public investment projects.

Secondly, the accountability of local authorities is not high for both the accountability of the authorities at all levels to the local people and the accountability to the central level. The degree of compliance by local authorities to the central government's public investment decision (also known as accountability to the upper level) is limited as Thai Nguyen Province is frequently on the list of delayed units submit reports to the Ministry of Planning and Investment. According to the accountability index in the PAPI indicators of Thai Nguyen Province shows that the accountability tends to decrease. It indicates that the recommendations and denunciations of local people to the authorities at all levels (about public investment projects) have not been satisfactorily responded by local authorities yet.

Finally, the resources are limited. More resources are a prerequisite for implementing the local responsibilities which are decentralized extra. However, over the years, Thai Nguyen Province, like many other provinces in the country, has not been able to balance the local budget by itself. The revenue is not stable but the rate of expenditure is high. Therefore, the budget of province still depends on the transfers from the central government. That leads to the increase of reliance on the central level in Thai Nguyen Province. Since then, the budget for public investment management decentralization will also be affected.The limitations in public investment management decentralization are ultimately the weakness of state management officers. There still exists shortcomings in both quantity and quality, and the structure is not guaranteed, leading to errors in the process of implementing tasks. In addition, there is a lack of morality such as taking advantage of loopholes in mechanisms and policies, using positions to corrupt which causes loss and wastes public investment capital.

4. Some recommendations to improve public investment management decentralization in Thai Nguyen Province

Firstly, it’s necessary to decentralizing transparently in public investment management towards completing a more independent public investment management system for all levels of government in the province. This will facilitate giving full accountability to each level of government, overcome the high hierarchy and integration of public investment management decentralization and encourage the local government to exploit its strength.Secondly, improving local authority’s autonomy to increase revenue in order to have expenditure is an objective requirement consistent with the demands of public investment management decentralization. At the same time, it currently makes the revenue more commensurate with the expenditure of local government.

Therefore, the province needs to agree to decentralize basically revenue and expenditure to the district and commune levels and gives each of these levels a certain autonomy in revenue and expenditure at their level. Besides, it’s important to improve the capability of decentralizing the public investment management at each level that is commensurate with their roles in local state management. Clear legal delineation in revenue and expenditure for each level will create initiative in mid-term and long-term budget planning. In addition, encouraging all levels of government to pay attention to revenue needs also to be considered.In order to increase lower level’s revenue, the local government’s autonomy in tax is a concern. According to the world’s point, the local government can set its own tax in some types of taxes. However, in Viet Nam, it is not feasible to let local government set their own taxes because this could create tax competition among localities. However, it is possible to consider allowing local governments to decide on tax or fees for some specific service taxes.

The local government's revenue autonomy in public investment management is also enhanced by giving the local government more authority to decide and collect fees and charges in the local area. These revenues are usually not large in the total budget revenues of the province. The main purpose is making lower authorities be more proactive without affecting the state budget revenues of the province.Thirdly, improving the transparency and accountability in public investment management decentralization at local levels. The promotion of public investment decentralization can achieve the goal if only it is associated with improving the transparency and accountability in using decentralized public investment capital in the locality. Appropriate mechanisms should be in place to strengthen the inspection of the competent authorities to ensure the effectiveness of the public investment management decentralization.

In particular, it is necessary to promote the role of elected bodies and of the State Audit. Improve the accountability of each level of government in the public investment management decentralization not only to the superiors but to the People's Council and people at that local level.Finally, the local government needs to focus on training state management officers in public investment management associated with the effective and practical methods. In order to improve their capacity, the local government needs to regularly let state management officers attend short-term and long-term training courses. In addition, it is necessary to improve the morality of local managers, avoid corrupting in the public investment management process. The local government should intensify the propaganda, dissemination and education about anti-corruption laws for cadres, civil servants and public employees working in departments, sectors, investors, and project management which is directly related to the state management of public investment in the locality

5. Conclusion

Public investment management decentralization is a major policy of the Party and State to enhance the autonomy, creativity and self-determination of the local government, thereby improving the efficiency of public investment and the socio-economic development in the locality and the whole country. Thai Nguyen is the northern midland and mountainous province, the center of socio-economic development in the northern midland and mountainous region. Over the years, the public investment management decentralization has been carried out according to the Party and State's guidelines and gradually obtained positive results. However, with many changes in the domestic and international context, it’s getting important to improve the public investment management decentralization in Thai Nguyen province.


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  2. Tran Kim Chung. (2015).Restructuring public investment. Hanoi: Finance Publishing House.
  3. Nguyen Van Dai (2017), Some models of decentralization of state administration management in the world and suggestions for Vietnam, Journal of European Studies, No 09, p. 37-48.
  4. Statistics Office of Thai Nguyen Province (2020).Thai Nguyen Statistical Yearbook 2020. Statistical Publishing House.

Nâng cao hiệu quả phân cấp quản lý đầu tư công trên

địa bàn tỉnh Thái Nguyên

 Th.S Ngô Ngân Hà

Đại học Thương Mại


Đầu tư công có vai trò quan trọng đối với sự phát triển của tỉnh Thái Nguyên. Đầu tư công không chỉ góp phần thay đổi kinh tế - xã hội mà còn nâng cao cơ sở hạ tầng kỹ thuật và năng suất lao động của tỉnh Thái Nguyên. Bên cạnh những đóng góp tích cực đó, đầu tư công trên địa bàn tỉnh Thái Nguyên còn tồn tại nhiều hạn chế, nhất là hiệu quả đầu tư còn ở mức thấp. Sự bất cập trong phân cấp quản lý đầu tư công giữa Trung ương và địa phương là một trong những nguyên nhân chính dẫn đến hạn chế trên. Bài viết này trình bày những hạn chế và nguyên nhân của những hạn chế trong phân cấp quản lý đầu tư công tại tỉnh Thái Nguyên; đồng thời đề xuất một số kiến ​​nghị nhằm nâng cao hơn nữa hiệu quả phân cấp quản lý đầu tư công trên địa bàn tỉnh Thái Nguyên.

Từ khóa: đầu tư công, phân cấp, tỉnh Thái Nguyên.

[Tạp chí Công Thương - Các kết quả nghiên cứu khoa học và ứng dụng công nghệ, Số 14, tháng 7 năm 2021]