Legal Institutional Framework To Counter Crony Capitalism In Vietnam's Investment-Led Growth Transition

Abstract

This paper examines how Vietnam's current legal framework enables crony capitalism and proposes institutional reforms to strengthen the rule of law. The primary objective is to identify legal vulnerabilities that allow politically connected entities to circumvent market discipline and recommend targeted institutional reforms. The research design employs doctrinal legal analysis combined with comparative institutional assessment, examining Vietnam's Competition Law, Anti-Corruption Law, Investment Law, and judicial framework against international best practices. The methodology includes systematic analysis of legal provisions, implementation gaps, and enforcement mechanisms, supplemented by comparative analysis with Singapore and South Korea's anti-cronyism frameworks. Main outcomes reveal four critical vulnerabilities: excessive administrative discretion, institutional fragmentation in anti-corruption enforcement, weak judicial independence, and limited transparency in administrative decision-making. Results demonstrate that these legal gaps create systematic opportunities for political connections to override market mechanisms while maintaining formal legal compliance. The conclusions recommend establishing unified anti-corruption institutions, enhancing competition policy independence, strengthening judicial autonomy, and implementing comprehensive transparency mechanisms. These reforms are essential for Vietnam's transition to sustainable investment-led growth and maintaining international competitiveness.