1. ¹Australian Bureau of Agricultural and Resource Economics, Canberra, ACT, Australia
2. ²National Centre for Development Studies, Asia Pacific School of Economics and Government, Crawford Building (#13), Australian National University, Canberra, ACT, Australia 0200. E-mail: tom.kompas@anu.edu.au
3. ³Australian Bureau of Agricultural and Resource Economics, Canberra
4. ⁴National Centre for Development Studies and Department of Economics, Faculty of Economics and Commerce, Australian National University, Canberra, ACT, Australia

Deceased.

Abstract

This paper analyses the dramatic increases in rice output and productivity in Vietnam due in large part to market reform, inducing farmers to work harder and use land more efficiently. The reform process is captured through changes in effort variables and a decomposition of total factor productivity (TFP) for Vietnam as a whole as well as for the north and south of the country taken separately. The results show that the more extensive the market reform the larger the increase in TFP and the share of TFP growth due to incentive effects, suggesting that more competitive markets and secure property rights matter greatly.