Funding public institutions not affordable

Update: October, 16/2017 - 09:49

Professor Nguyễn Hữu Khiển, former Deputy Director of the National Academy of Public Administration, talks to Thời báo Tài chính Việt Nam (Việt Nam Financial Times) about the constantly unbalanced State budget.

The disproportion between the State budget’s revenue and its high spending have been plaguing us for years, partly due to growing administration spending. What is your view?

There are two types of State budget spending in the world. In the first model, the State budget is mainly used to sustain State governance, with executive bodies far larger than those of the legislature and judiciary. This is the model applied in most Western democracies, with the US as an example. It comes from the nature of a professional governance, which means the State works to serve the society. The citizens, in turn, pay a part of their income to sustain the Government.

The second model is the one applied in socialist democracies like ours and others that used to be in the system. The State spends the budget for political and other organisations under State control. The burden on the budget is, hence, bigger than in the first model.


The State budget already has to spend much more in terms of the number of recipients; worse still, they are growing at a faster pace than the socio-economic growth which generates State revenues. The situation was mentioned several times in the Party’s resolutions, in the speeches of top Party and Government leaders, as well as the National Assembly deputies, to little avail so far.     

The number of administrative bodies at ministerial level increased by 28 and up to 822 in department levels over the last five years. What do you think about the repeated call for a leaner Government?

It isn’t just a matter of the Government’s administration but also of State-funded organisations, which are multiplying by establishing new sub-organisations or setting up educational institutions, most of which are universities. There are even independent businesses inside those universities or public organisations.

Whenever a proposal for leaner governance came up, hardly anyone points their finger at those entities that are, in fact, part of civil society. If we fail to see the root of the problem, downsizing work aimed at the cabinet only, though fairly important, will not be enough.

The Ministry of Finance is now trying to balance the budget and some are asking the Government to carry out the downsizing work, otherwise spending can never be cut. What is your opinion?

I think it’s right but still not enough if we aim only at the Government cabinet. It isn’t the only entity burdening the budget, but also those organisations that I mentioned above.   

Regarding solutions, it’s true that the cabinet must be the first to downsize. It is, well, the centre of the redundant and bulky bureaucracy. Secondly, public-funded organisations must head towards total financial autonomy or move out to the private sector. -- VNS