INSTITUTIONS OR GEOGRAPHY: WHAT MATTERS FOR ECONOMIC DEVELOPMENT?

Abstract

Using Vietnam’s Provincial Competitiveness Index as a proxy for the institution and province-level topographic ruggedness index, this study shows that provinces with better institution and economic development are ones with more favorable topographic conditions. This study also finds that some provinces which ranked at the low level of institution for many years are ones with unfavorable topographic conditions. Therefore, the government need to intervene strongly to promote the economic development by building good infrastructure, improving level of education and healthcare networks, rather than to focus too much on changing institution in these provinces.

Keywords: Institution, topography, PCI and Vietnam.