Los medios en el proceso educativo

The PCI has been developed by the Vietnam Chamber of Commerce and Industry (VCCI) in conjunction with the USAID funded Vietnam Competitiveness Initiative (VNCI). As presented in the various PCI reports (Malesky 2006b; Malesky et al. 2007; Malesky, Tran, Dau, Le, Huynh, Ha et al. 2006; Malesky et al. 2008), the PCI is primarily the result of the largest-ever and most comprehensive mail-out surveys ever undertaken of the perceptions of the Vietnamese private sector of provincial economic governance (soft data), together with the assembly of credible and comparable data from official and other sources (hard data) regarding provincial conditions. The mail-out survey was an appropriate method for retaining confidence so as to obtain objective results, by ensuring that enterprises were not afraid of answering sensitive questions, such as about transparency and informal charges. The hard data were gathered from statistical yearbooks, interviews with third-parties such as state- owned banks or real estate firms, or collected from business associations.

The PCI data used in this research comes from the surveys conducted for four years, 2005- 2008. In 2005, the PCI team assessed and ranked forty-two provinces, accounting for a total of 89% of the Vietnamese national GDP and with the participation of 2,020 private firms (out of 16,200 firms mailed). As presented in the PCI reports, the methodology for constructing the PCI was been implemented by a group of experienced experts and has been acknowledged internationally (Malesky 2006b). When announced, the 2005 PCI results

caused a shock throughout the country, with much controversy and many different responses. However, the undistorted voice from enterprises as well as objective data collected was not to be denied, forcing provincial leaders to re-evaluate their economic governance. The Vietnam National Television Channel VTV1 selected the PCI as one of Top Ten Economic Events of 2005 (Business Forum Electronic Newspaper 2006).

Strongly supported by business communities, research institutes and the larger public, the research team made a further effort to improve the methodology and the process of data collection. Consequently, the 2006 survey gained much more comprehensive data. According to the PCI reports (Malesky, Tran, Dau, Le, Huynh, Do et al. 2006), the survey covered all the sixty-four provinces in Vietnam with the participation of over 6,300 private sector firms (out of over 31,000 firms mailed), allowing for much stronger and more reliable data analysis. In 2007 and 2008, the survey was carried out on a larger scale and involved consultation with many national and international experts. In practical terms activities, the PCI has become an important instrument and a key criterion used by many provincial governments as well as donors to facilitate and drive governance reforms, through identifying issues that need to be improved in each province (Business Forum Electronic Newspaper 2006; Ray 2006) (see boxes 5.1 and 5.2). The large, four-year surveys with a set of around 80 questions or question groups provide a very rich source of data for researchers and policy makers. This thesis uses the integrated PCI and this rich survey data resource (both called the PCI data for short) as a main data source to analyse effects of place marketing performance.

Box 5.1: An example of PCI use by provincial governments

Provincial authorities were quick to respond to PCI 2005, embarking on a number of initiatives to improve their regulatory environments for private sector development. Soon after the release of PCI 2005 and its provincial rankings, various provincial authorities invited the PCI team to present a customized diagnostic analysis of their province’s performance in the PCI. These diagnostic workshops, where the PCI team outlined key strengths and weaknesses of the province’s PCI performance, and put forward broad recommendations for action and reform, were typically chaired by The People’s Committee Chairman or Vice Chairman, and facilitated by the Department of Planning and Investment. As of mid-2006, diagnostic workshops had been held in An Giang, Bac Ninh, Binh Dinh, Binh Thuan, Hai Duong, Nam Dinh, Quang Binh, Quang Nam, Tien Giang, Vinh Long and Vinh Phuc.

Important commitments and initiatives have resulted from these diagnostic workshops. These include: i) new measures to promote business participation and feedback in the policy and planning process; ii) greater efforts to streamline and rationalize business licensing and land access procedures; iii) improved mechanisms for the dissemination of investor related information; and iv) better coordinated institutional responses to improve the treatment of private sector entrepreneurs and investors.

Source: Extracted from the PCI report 2006 (Malesky, Tran, Dau, Le, Huynh, Do et al. 2006, p. 2).

Box 5.2: An example of PCI use by donors

Mekong Private Sector Development Facility7 used the PCI as the background for its operation programs. The following paragraph is cited from one of its programs:

In 2005, with help from a USAID-funded project, the Vietnam Chamber of Commerce and Industry (VCCI) launched a Provincial Competitiveness Index (PCI) that ranked provinces according to the domestic private sector’s perceptions on the business environment – a sort of sub-national Doing Business. The PCI drew wide media coverage and created a stir throughout the country, prompting the more reform-minded officials in some provinces to actively seek assistance to overhaul their existing business regulations and procedures. Despite their strong interest in reform, however, many local authorities lacked the tools or information to know where to start … MPDF has taken the lead in Vietnam to design and pilot a Provincial Simplification Program, aimed at helping provincial governments develop and implement effective business reforms.

Source: (International Finance Corporation 2008a).

The PCI rates provinces on a 100-point scale based on factors that the previous research has shown to be important determinants of private sector growth and prosperity. The overall

7 _{IFC-MPDF (International Finance Corporation - Mekong Private Sector Development Facility) is a multi-} donor funded initiative set up by the International Finance Corporation in 1997 in Vietnam, Cambodia, and Lao PDR, to reduce poverty through sustainable private sector development. The Facility works through six interrelated programs that: seek to improve the business environment; develop the financial sector; improve managerial capacity; and increase sustainable business practices in three sectors that are central to economic growth and poverty reduction – tourism, agribusiness, and garments. IFC-MPDF’s donors are the Asian Development Bank, Australia, Canada, Finland, IFC, Ireland, Japan, New Zealand, the Netherlands, Norway, Sweden, Switzerland and the United Kingdom.

index was comprised of nine sub-indices in the 2005 PCI report (Malesky, Tran, Dau, Le, Huynh, Ha et al. 2006). In years 2006-2008, the PCI was reviewed and amended by placing more weight on the post-registration environment. For example, the weight of the Entry Costs sub-index declined sharply, from 17.1% to 5% and the two added sub-indices were Labour Training and Legal Institutions (see below), both of which are critical to the operation of enterprises. At the same time, the sub-index, Implementation of Policies and Consistent Application was removed from the list for being reflected by other sub-indices. The overall index from 2006 contains ten sub-indices as follows (Malesky 2006b; Malesky et al. 2007; Malesky, Tran, Dau, Le, Huynh, Ha et al. 2006):

1. Entry Costs: A measure of the time it takes firms to register, acquire land and receive all the necessary licenses to start business; the number of licenses required and the perceived degree of difficulty in obtaining all the required licenses and permits. 2. Land Access and Security of Tenure: A measure combining two dimensions of the

land problems confronting entrepreneurs: how easy it is to access land and the security of tenure once land is acquired. The first dimension comprises whether firms possess their official land use rights certificate; whether they have enough land for their business expansion requirements; whether they are renting from SOEs; and an assessment of land conversion efforts. The second dimension includes perceptions of various tenure security risks (such as expropriation, unfair compensation values or changes in the lease contract), as well as the duration of tenure.

3. Transparency and Access to Information: A measure of whether firms have access to the proper planning and legal documents necessary to run their business, whether these documents are equitably available, whether new policies and laws are well communicated to firms and implemented predictably, and the business utility of the provincial web page.

4. Time Costs and Regulatory Compliance: A measure of how much time firms expend on bureaucratic compliance, as well as of how often and how long firms must shut their operations down for inspections by local regulatory agencies.

5. Informal Charges: A measure of how much firms pay in informal charges, how much of an obstacle those extra fees pose for their business operations, whether payment of those extra fees results in the expected results or ‘services’, and whether provincial officials use compliance with local regulations to extract rents.

6. SOE Bias (Competition Environment): A measure of the competition regime confronting private business, focusing on the perceived bias of provincial

governments toward state owned enterprises (SOEs) and equitized firms, notably in terms of incentives, policy and access to capital.

7. Pro-activity of Provincial Leadership: A measure of the creativity and astuteness of provinces in implementing central policy, designing their own initiatives for private sector development, and working within (sometimes unclear) national regulatory frameworks to assist and interpret them in favour of local private firms.

8. Private Sector Development Services: A measure of provincial services for private sector trade promotion, provision of regulatory information to firms, business partner matchmaking, provision of industrial zones or industrial clusters, and technological services for firms.

9. Labour Training: A measure of the efforts by provincial authorities to promote vocational training and skills development for local industries, and to assist in the placement of local labour.

10. Legal Institution: A measure of the confidence of the private sector in the provincial legal institutions, whether firms regard provincial legal institutions as an effective vehicle for dispute resolution, or as an avenue for lodging appeals against corrupt behaviour by officials.

Each sub-index includes a number of indicators of the management performance of provincial governments across provinces in Vietnam. These indicators are presented in Appendix 1 at the end of this thesis. To construct the overall index, the sub-indices are weighted by their relative contribution to private sector development (only the contribution controlled by provincial governments, not by the central government) to enhance the ability of PCI in explaining the influence of provincial governments on private sector development (Malesky 2006b; Malesky, Tran, Dau, Le, Huynh, Ha et al. 2006). To measure this contribution, the PCI research team examined the influence of each sub-index on the following three key economic performance variables8 which have been supposed to be the most important ones to measure private sector development by researchers and practitioners in Vietnam:

8 _{All economic performance variables were calculated based on the General Statistical Office’s 2000-2003} Enterprise Census (noted by Malesky in the PCI reports).

 The ratio of private enterprises that completed registration procedures per thousands of provincial citizens 2003 (including Sole Proprietorships, Partnerships, Limited Liability Companies, and Joint-Stock Companies).

 Average private sector long-term investment per capita (2000-2003): this variable was chosen to gauge the size of the risk entrepreneurs were willing to make. The assumption is that private entrepreneurs will be more willing to make sizable investments in more conducive regulatory environments, where they can more accurately assess the long-term potential risks.

 Average profit per firm (in millions of VND) (2000-2003): this variable was selected as a measure of the success of individual firms over the Post-Enterprise Law period9 (Malesky 2006a, p. 7).

Using multivariate regression analysis, the research team determines the relative contribution (or ‘weight’) of each sub-index to the above economic performance variables while controlling for the initial advantages of quality of human capital, infrastructure, and proximity to markets. By this design, the PCI provides a measure of the differences in provincial regulatory frameworks and business environment which are the results of provincial governance (Malesky 2006a, p. 1). The PCI data is a huge data collection based on responses from enterprises gathered through the PCI surveys for the four years (2005-2008). With a large scale and a scientific method for carrying out the surveys, as presented in the PCI reports, this is a reliable data source for our research purposes. Data on the aggregate PCI index by province is presented in Appendix 2.