Talking Back: The Role of Narrative in Vietnam's Recent Land ...

48(3) 493–508, February 2011

0042-0980 Print/1360-063X Online © 2011 Urban Studies Journal Limited

DOI: 10.1177/0042098010390234

Annette M. Kim is Associate Professor in the Department of Urban Studies and Planning, Massachusetts Institute of Technology (MIT), 77 Massachusetts Avenue, Cambridge, Massachusetts, MA 02139-4307, USA. E-mail: [email protected].

Talking Back: The Role of Narrative in Vietnam’s Recent Land Compensation ChangesAnnette M. Kim

[Paper first received, May 2009; in final form, July 2010]

Abstract

As in other rapidly growing economies, Vietnam’s urban land development has been a source of social conflict as those who are relocated contest the distribution of economic gains. More recently, the relocated have increased their bargaining power and receive better compensation packages. The paper analyses this situation to discuss further developing our understanding of how property rights institutions change. The case study shows the efficacy of social narratives to renegotiate the terms of the social contract supporting property rights even in a society with limited means for public participation in governmental reform. Secondly, it illuminates that modern property rights are entwined with public finance and so property rights reforms are tied to the organisational structure of government and fiscal relations.

state owns all the land in the nation so the displaced cannot make claims based on property ownership. The state makes uni-lateral urban planning decisions that deter-mine new city boundaries and future land redevelopment. Furthermore, in Vietnam, investment approval for land development is given to a particular entity and cannot

1. What Is So Surprising about the Vietnamese Property Rights Reforms

Those being displaced by urban development in Ho Chi Minh City have increased their bargaining power and gained significantly improved compensation settlements within the past five years. One would not have expected this outcome because the public has little input or formal means of recourse in Vietnam’s land management system. The

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be transferred privately to another entity. Without competition for developments rights and with constraints on transferring them, alternative development projects or land users that might make better use of a site are not allowed. Furthermore, Vietnam’s one-party government does not provide lawful means of public gathering to protest against unpopular decisions. The fact of displacement is so estab-lished that even those being displaced primar-ily question only the terms of compensation and resettlement. So, given this institutional context, it is indeed surprising that there has been significant change in compensation practices in urban Vietnam evolving from primarily minimal cash compensation and public resettlement areas to arrangements that include financial compensation exceed-ing current market and regulatory levels, and in combination with providing shares and parcels in the new developments.

Social conflict over the relocation of pop-ulations for urban land development projects is not an Asian issue, however, but a global dilemma, as international news headlines remind us. One might wonder whether land development controversies are more com-mon in developing countries. For example, property appreciation and information asymmetries are typically high in new real estate markets. Combined with non-transparent government institutions, out-comes for the poor can worsen and lead to social conflict. On the other hand, the early years of economic development may also be a time of regulatory flexibility and institutional experimentation that might benefit the poor (Huang, 2008). Yet, higher-income countries, with well established rule of law, have also been experiencing increased conflict over land takings and compensation because the government continues to invoke residual claims on private property rights (Kim, 2009), although it may not have resulted in signifi-cant changes in law or practice in some places (Jacobs and Bassett, 2010; Kayden, 2009).

As discussed in the introduction to this Special Issue of Urban Studies, we do not yet have satisfactory theories as to how prop-erty rights institutions change nor how they sometimes change to increase the distribu-tion of gains to the less powerful. This article aims to help address this gap by examining the details of how compensation for land takings has evolved in transitional Vietnam. Vietnam is a convenient comparative case for studying property rights changes because they are as steeped in decentralisation and privatisation trends as other countries (Duckett, 1998; Harvey, 1989; Marcuse, 1996; Oi, 1995; Zhu, 1999). When Vietnam embarked on system-wide reform of the economy, it decentralised land use author-ity not only to provincial and city govern-ments but also to district governments within larger cities. While local govern-ments gained more discretionary power over approving land investments, they did not have anywhere near sufficient public finance resources to deal with the historical rates of rural to urban migration. Local government bureaus developed a new form of economic relationship with an emerging group of pri-vate entrepreneurial firms. They exchanged private land development approval for the private financing of public infrastructure in an arrangement I refer to as fiscal socialism (Kim, 2008). While this arrangement may serve the interests of local government and private real estate investment, it is also as common that other members of society cry foul. However, in the case of Vietnam, the changes have been swift and, more recently, in the counter-intuitive direction of increas-ing the compensation and bargaining power of the displaced.

In order to explore how this change occurred, this article first outlines what the literature tells us about the essential nature of property rights and how they are con-structed. It then outlines what changed officially in the law and policy as well as in the



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property practices of local bureaucrats, real estate developers and citizens. These partici-pants point to the pressure that the central government was under from those being relocated. The article then turns to address how the less powerful could put pressure on the government when there were not many formal means for dissent or political partici-pation. It outlines the main feedback chan-nels to the government: the state-run media, associations and local bureaucrats. Citizens engaged them by telling their stories. The article outlines the competing narratives found through content analysis of media and ethnographic fieldwork and critically analy-ses how one narrative became institution-alised into a change in property rights law, policy and practice.1 It then concludes with a discussion about the implications for our understanding of how property rights insti-tutions change and sometimes in counter-intuitive directions.

2. Institutional Change: Property Rights in Vietnam

2.1 Fiscal Socialism and the Early Years of Transition

With Vietnam’s economic transition and growth, large numbers of its population have been displaced. Roughly 10 000 hectares of agricultural land are converted into urban land each year in Vietnam (Coulthart et al., 2006). During the earlier years of transition, city and city district governments were given powers to manage the land use conversions. They drew master plans that outlined where agricultural land was to be converted to urban land. Because land values were rising exponentially, investors were willing to ‘pay’ exactions, which typically included develop-ing infrastructure and other public works. However, investors also had to negotiate and pay compensation to the current occupants of the land who held a right to farm agricultural

land. Once a settlement is agreed upon, the farmer officially returns the land use right to the state while the investor simultaneously applies for the right to use the land from the state, the owner of all land. Unlike in China, these compensation payments were paid directly to the individual farmer rather than disbursed through collectives.

During the 1990s, in the early years of transition, the compensation policies offered two kinds of option: cash compensation or the in-kind provision of resettlement hous-ing. However, there was significant dissat-isfaction with both of these compensation arrangements. The cash compensation rates being paid for land and the market prices for developed real estate were of different orders of magnitude. Meanwhile, the lim-ited amounts of resettlement housing built were unsuccessful because they were sited in locations far from employment centres and public services and designed in cost-effective but inappropriate high-rise building styles. In addition, rural populations did not tran-sition well to a new way of life and did not know how best to leverage their compensa-tion packages, resulting in welfare loss (To et al., 1997). The public sector was never able to build enough housing before the transition, let alone for all those being relocated by Vietnam’s high rate of urbanisation (Luan et al., 2000).

As these compensation packages became increasingly unacceptable and compensation negotiations started slowing down develop-ment projects, the cash offered to relocate occupants started to increase, but so did the political and social pressure on farmers to sell quickly. Development firms generally had the upper hand in negotiations. If the project fit-ted the master plan and had been approved, the ward, district and city government bodies gen-erally helped the developers to attain the land use right at a low price from the current user.

In particular, the important role of the lower levels of city government, the district and ward, in the compensation negotiations



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are outlined in Decree 22/1998/ND-CP. A negotiation group called Council of Compensation for Damage in Ground Clear-ance (Hoi Dong Deu Bu) was to be presided over by representatives from the district. In addition to city district officials, some com-panies also took advantage of their ability to engage the help of unions and associations such as the Women’s Association, the Youth Union and the Retired People’s Association to try to persuade and put peer pressure on farmers to sell quickly. Up until around 2004, ward and district officers often negotiated on behalf of the private land development firms. The assertion of the rectitude of low compensation amounts was assisted by com-pensation price formulae published by the Department of Finance and Market Prices. Its calculations depended on the location of the site, the quality of property being dismantled and the proof and length of tenancy. While the compensation rates varied by project, invariably there was always a disagreement over its adequacy. For example, for one of the largest projects being developed by a foreign investor in HCMC, the compensation offered was calculated to be much higher than 10 years of farming income. However, it was also only one-third of the market price for urban land, the values of which were growing wildly in the speculative market. Farmers could not purchase equal amounts of new land with the compensation payment and would have had to relocate far from the city and increase their transport costs (To et al., 1997).

2.2 Recent Legal and Regulatory Changes

The 2004 update of the 1993 Land Law attempted to reign in the excesses of fiscal socialism. It tried to increase the transparency of land transactions through the introduction of land auctions. One of the authors of both laws stated that the intent of the auctions was for cities to use funds collected from the sale of land use rights to build infrastructure themselves. The new law also asserted that the land prices set by the state

must ensure [that] they are close to the actual prices of land use right transfer on the market under normal conditions; in case of big differences as compared with the actual prices of land use right transfer in the market, appropriate adjustment must be made (Article 56, Land Law 2004).

However, the law is vague about how close is close enough and how big is big.

Changes were also made in the official compensation regulations. As discussed ear-lier, 1998’s Decree 22 gave much authority in the land compensation councils to the city district governments who had incentives to help firms investing in their jurisdiction and pressured farmers to sell cheaply. They were designated to lead the compensation negotia-tion councils. However, in 2004, Decree 197 revised these guidelines, giving the city over-sight of the negotiations. It also introduced new language directing the district authorities

to settle citizens’ complaints, denunciations related to compensation, support and resettlement [and] to guarantee impartiality and equity when considering and deciding on the compensation, support, and resettlement (Article 43, Decree 197/2004/ND-CP).

Starting in 2004, the city started issuing a much more detailed table of official compen-sation rates for each street in the city with a marked jump in compensation rates in 2007 as seen in Figure 1.

2.3 Changes in Compensation Practices

However, formal, legal changes are sometimes the least interesting institutional change in developing countries because the formal law is often divorced from practice. Legal scholars and the international development literature have debated whether changes in practices are more or less relevant than formal legal changes and which follows the other. Some studies have emphasised that social norms about property rules are more often utilised and formal, legal institutions are only invoked in a smaller subset of cases where the value




of the loss to disputing parties would be high enough to render the time and costs of engaging formal institutions worthwhile, which is usually not true for the majority of society in developing countries (Acheson, 1988; de Soto, 1989; Ellickson, 1991; Kim, 2007; Leaf, 1994). However, all norms are not created equal and the ultimate property right is revealed by whom the state enforcement institutions support in cases of dispute (Cole and Grossman, 2002). The state can finally acknowledge common practices with changes in the law. For example, China and Vietnam legally condoned the practice of selling land use rights after they had been taking place for some time (Buckley, 2004; Gainsborough, 2003; Gold and Bonnell, 2002; Malesky, 2004).

In Vietnam, before these official legal changes in compensation negotiations and rates, significant changes in compensation practices were already happening. Sometime between 2001 and 2003, district governments started taking a less central role in clearing

sites for private development projects and in shepherding them through the bureaucratic project approval process. Firms were left to negotiate directly with farmers. In these negotiations, city planners and developers cite that, in the current situation, there are three types of compensation: cash compen-sation negotiated beyond the official prices, on-site resettlement and forced compensa-tion and relocation.

Cash compensation settlements have increased considerably since the 1990s. Par-ticularly in the most high-profile, high-valued projects, compensation rates may exceed state frame prices. Staff at the HCMC Department of Planning and Architecture stated that they have seen well capitalised firms even offer cash compensation rates above current market prices in order to clear a site more quickly. Now, land compensation has become a significant portion of project costs. For example, the 2004 Thu Thiem new urban development area plan estimated the cost of

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Figure 1. Official land compensation prices in Ho Chi Minh City: median price by city district, in thousand VND per square metre, 1995–2009.Note: no compensation tables were issued in years 1996–2004. Instead ‘k-factor’ variables were issued which were to be multiplied to the 1995 tables rates. However, we were not able to locate a comprehensive list of k-factors and so the dotted line indicates projections between the years for which tables were issued. Source: People’s Committee of Ho Chi Minh City.



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site preparation to be US$3.22 billion, 38 per cent of which is for land compensation and resettlement for approximately 40 000 people (Shi, 2008). Still, most sites cannot be completely cleared with higher cash com-pensation alone.

The biggest change in compensation practices is that developers will now incor-porate into their plans a portion of their site to accommodate current occupants. This is particularly relevant for the large residential projects on the periphery, but also occurs in the city centre as land values have increased rapidly since 2005. While, officially, the option always existed for current occupants to buy future project residential units, the difference between compensation rates and the sales prices of new units was too large to make this a realistic alternative. In this com-pensation practice, a section of the project site is dedicated to the current occupants. This portion of the project is developed into urban, residential land and sub-divided into smaller-sized parcels in order to make them more affordable. Households ‘sell’ their current land use right at a negotiated price which is used to ‘pay’ for the new smaller parcel that has better infrastructure services. The compensated households have some more, although limited, choice in location within this sub-project area and in how large a parcel they wish to buy. Any remaining dif-ference in sales price is exchanged in cash. An important aspect to the successful buy-in of this form of compensation and site clear-ance is that the resettlement area must be developed before the rest of the project and so some of the local governments are requiring this in the project phasing.

This compensation arrangement is dis-tinct from conventional land readjustment schemes because those being relocated did not previously possess ownership rights to the land. Nor is the plan accommodating their original property boundaries to make way for a public investment. The advantage

to the developer, in addition to faster site clearance, is that less financial capital has to be used up front to pay compensation. It could also allow the relocated to share in the rapid appreciation in real estate prices that the HCMC housing market has been expe-riencing for the past 15 years. There remains concern about employment opportunities and household income stability if the house-hold had been engaged in farming. Another concern about this practice is that it may create a resettlement ghetto within the rest of the for-profit development.

The third ultimate compensation option which is specified in the law would be for the state to forcibly remove households and compensate them with only the state frame price. While this has occurred (Han and Vu, 2008), this power is now rarely invoked. Ultimately, developers who reach an impasse end up abandoning portions of their project. Because site clearance has become so diffi-cult in HCMC, the first generation of firms are now moving to more outlying areas of the urban periphery and to less developed regions in the country where local govern-ments are still willing to play a stronger role in clearing occupants.

Why did the developers start paying more for relocation compensation and accom-modating occupants on-site? Developers I interviewed point to a change in local gov-ernment which was no longer willing to play its instrumental role in compensation nego-tiations. Some of the developers character-ised the state as being frustratingly weak in standing up to social pressure

If the farmer protests and petitions, the government is on the farmer’s side. By law, the state could force them to sell, but so far it is impossible to do (veteran developer; quoted in Kim, 2008).

Another developer recounted with some degree of admiration how, in one of the compensation negotiation meetings, a lone




farmer was unafraid to decline the compen-sation package being presented to him. He said that if he were in his shoes he would have been too intimidated to contradict the high-level officials present at the meeting. The terms of fiscal socialism have shifted such that individual farmers have the ability to hold up projects by refusing to agree to a compensation price, much to the chagrin of private developers.

How is it that low-income, individual citi-zens could gain such an increase in bargain-ing power? How is it that local government bureaucrats came to curb their primary meth-od of gathering extra-budgetary revenues? Why did the local Vietnamese developers have to relent and pay more compensation and/or provide places for the current occupants to live? All interviewees point to the govern-ment responding to social pressure. Yet, how did this pressure organise and have force in a political system that does not allow organised meetings, public participation in governmen-tal reform or criticism of the Communist par-ty in its exclusively state-run media?

3. Muffled but Heard: Institutional Feedback Channels in Vietnam’s Political System

This section discusses where, through which channels and networks, the social pressure was transmitted to the government that would encourage intergovernmental reform and a reconstruction of property rights and compensation. Figures vary, but it is clear that there were many formal complaints filed against how local government was han-dling property. In a study about compensa-tion and site clearance within Hanoi, from 2000 to 2006, 585 petitions relating to site clearance, compensation and resettlement disputes were filed with the city authority which accounted for over 50 per cent of the petitions they received ( Nguyen and Hoang, 2007). In HCMC, ward officials estimated

that, in the late 1990s, 30–50 per cent of all the complaints they received involved land and housing disputes (Gillespie, 2001). One report cites that 85 per cent of complaint letters in the country are concerned with land, housing and compensation (Le, 2009). In addition to citizens lodging a formal peti-tion or complaint, there are other ways that citizens voice their opinions to the govern-ment. The literature suggests some places to look and I discuss these in relation to the evidence found in this case: news media, civic associations and everyday conversations.

3.1 Newspapers

The newspapers in Vietnam have become a lively public arena, even though they are state-owned. When the papers started selling advertising, they became more sensationalist and often covered scandals. The social move-ment literature suggests that scandals can spark the reframing of a situation with long-dormant contradictions (Zald, 1996). That is, even strong states may find that incidents incite pubic back-lash against the fact that a socialist government is sometimes relocating its citizens for private land development projects with dubious public benefits (Citynet, 1995; Sorensen, 2000).

There have been scandals and protests about land management in Vietnam, some of which were and were not covered by the press. In the late 1990s, when public protests about land conversion issues started occurring in various parts of the country, the state-run media were not allowed to cover any violent protests. For example, from May to September 1997, there was a media blackout of the protests in Thai Binh province near Hanoi, where farmers protested against local government corruption, punitive taxes, land disputes, com-pulsory labour contributions and unfair rice prices. Similarly, in November 1997, foreign journalists were banned from covering violent protests in Dong Nai province, near HCMC, that occurred in response to the local authorities expropriating the Catholic church’s



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land in Tra Co commune (Human Rights Watch, 1997). By the early 2000s, newspa-pers did start reporting some incidents in which police power was used to evict land tenants who would not accept compensation settlement packages. For example, Han and Vu (2008) recount that a state-owned news-paper in the early 2000s reported a violent ‘riot’ of 200 villagers resisting compensation packages to make way for a foreign-operated golf course project.

However, such reports about direct clash-ing with the state are few and far between. More numerous were editorials by individu-als about smaller land disputes. Starting in 1997, the major newspapers in HCMC, such as Tuoi Tre (Youth News), Lao Dong (Trade Union) and Thanh Nien (Youth Union), began to publish such stories on a regular basis. Tuoi Tre newspaper has the largestcirculation (up to 500 000) and the highest demand for advertising space. They have set up a public relations office that readers can visit. Readers can also contact the newspaper’s hotline cellphone and landline numbers or e-mail address and suggest stories and air complaints. One page in the newspaper is dedicated to these stories. The newspaper gets more stories than they have space for, so they have to select which ones will be published.

In addition to receiving stories from the public, the newspaper staff have relation-ships with individual officials. Journalists will be invited to Hanoi for a private meet-ing where officials ask about how readers are responding to policies. The officials also of-fer interviews for the newspapers to publish. One journalist described a change that he has seen in his 11-year career as a journalist: ministers and heads of state-owned enter-prises have become more media savvy and now have official public relations spokesper-sons. In sum, the newspapers have become a source of both public and informal feedback and communication between the popula-tion and government.

3.2 Civil Associations

Many Vietnamese associations are related to the Communist Party. However, there are some professionally based associations which have some influence on policy-makers. With regard to land management, these have included the Vietnamese Architects’ Association and the Vietnamese Association of Historical Science (Logan, 2000; Thomas, 2002). The national Vietnamese Architects’ Association has 85 members with represen-tatives from each province as well as from schools and institutes. As an association, they can give their opinion about develop-ment projects to city governments around the country.

When interviewed, the president of the association stated that if a lot of people object to a specific project, then it can be stopped. He gave the example of an overly tall building that was approved to be built near a lake but was stopped by protest so that the city had to find another piece of land for the developer. He explained that citizens contact them directly through letters and office visits about specific projects. He also said that he has a close relation-ship with journalists at newspapers who, he says, like and support him and come to get his opinion on matters. He noted that opinions spread quickly through newspa-pers, but that their influence is limited. He noted that there are actually more projects that they would like to stop, but cannot since they are “just an association”.

In addition to the professional asso-ciations, in 2007, Vietnam’s first non-state think-tank, the Vietnamese Institute of Development Studies, formed with a 19- person steering committee consisting of some of Vietnam’s pre-eminent scholars in order to promote independent research that could better inform Vietnam’s development (Vietnamese Institute of Development Stud-ies, 2005). Many of these people were also politically well connected, including former




ministers and directors. However, VIDS’ di-rector, Dr Nguyen Quang A, said that the think-tank was designed to “compete with state-run research institutes” and

to encourage debate around important issues ... Our research won’t be influenced by anybody. Neither the state, the government, associations, businesses, individuals not even our sponsors can influence us (N. Nguyen, interview, 2007).

However, they disbanded two years later when the government issued Decision No. 97, which many viewed as directly targeting VIDS. It declared that

if a scientific or technical organisation has opinions commenting on the guidelines or policies of the Party or the state, it must send them to authorised party or state bodies and is not permitted to publish them (Decision No. 97, 2009).

3.3 Everyday Conversations

The Vietnamese system does not fit neatly into the social movement literature. The incidents and scandals about land management covered in the press were significant, but no one event can be said to have sparked a sea-change in the government. No organised grassroots social movement has formed and no lead-ers have emerged—unlike in China’s rural social movements which had agents and rural collectives that took advantage of political opportunities (Li and O’Brien, 1996). We see that the civil associations have some influence over individual projects, but they are strictly limited in their ability to change policies. Rather, we see that, in addition to the formal petition process, the institutional feedback mechanisms at play in this case involved a diffuse network of ways for individual citizens informally to relay their opinions to govern-ment. Institutions such as the press and asso-ciations would select a subset of situations and sentiments to convey to government, both on and off the record.

Of course, there are both pros and cons to such methods. If one can get the attention of a sympathetic and able bureaucrat, resolution of one’s personal situation may happen relatively quickly. However, without accountability such methods can also lead to nothing—or worse, individuals trying to change their situation have less safety or power than if they were organised. For example, three bloggers were recently arrested (and later released) because their on-line writings diverged from official party lines (Radio Free Asia, 2009).

And yet, we see that the government did seem to respond to growing public pres-sure. How was this pressure applied? Silbey and Ewick (2003) suggest that what may be more significant than an incident itself is the retelling of the incident which extends the life of the sentiment and builds it in society. For example, during my fieldwork in Ho Chi Minh City in 2000, one controver-sy concerned how Binh Chanh district had expanded the amount of land it was tak-ing for a French supermarket project. I saw about 25 demonstrators camped out on a major boulevard in downtown HCMC. It was significant because such protests are usu-ally not allowed. However, as a protest it was limited: passers-by were not allowed to speak to them as they quietly sat with large ban-ners explaining their grievances. What was more significant was that it became general knowledge that this was happening, which is how I knew where to go to witness the pro-test myself, from a distance. It was eventually reported about in the press (Quynh, 2000a) and the district People’s Committee leaders involved in this project were reshuffled and demoted.

Stories can work to extend the life of indi-vidual acts of resistance and can resonate and build common knowledge in a society that is critical of institutions. The impor-tance of social narratives helps further to refine our conception of power as social relationships (Foucault, 1976; Wrong, 1996),



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rather than as something one group has and another group does not. This perspective argues that the less powerful have more agency in society rather than being simply manipulated subjects of the élite. However, what Silbey and Ewick leave us with are important questions. When might stories add up to institutional change? Why do some stories get built into social narratives and others not? The process by which social discourse about property rights institutions itself changes and the role that discourse plays in affecting change in both practices and formal rules are not well understood (Gillespie, 2008). The next section discusses the narratives about property relations that were operating and not operating in Vietnam.

4. Battling Narratives

Whereas the previous section discussed where in society, through which channels, pressure was being applied to government, this section discusses what messages were being transmitted through them and how. Essentially, the narratives that I found through content analysis and ethnographic research told stories about who were the ‘greedy’ ones in the new fiscal socialism practice of land redevelopment: local government, farmers and developers.

4.1 ‘Greedy’ Wards and District Governments

Content analysis of articles from the news-paper Tuoi Tre from 1999 to 2006 shows that the majority of articles about land issues and controversies were editorials critical of local government officials, portraying them as greedy and corrupt individuals who took advantage of their position and did not follow the official regulations. For example, one article described a “portrait of a ward chairman—powerful, profit hungry though selling public land” (Trung, 2000). These

stories appeared as regularly as weekly or several times a month.

While these stories might be initiated by the individual citizen, it is clear that criti-cism of local government is supported by central government. In 1998, the state issued a decree about “Grassroots Democracy at the Commune” (Decree 29/1998/ND-CP) in which citizens are encouraged to hold local officials accountable and to combat corrup-tion with regard to land use plans and public budgeting, amongst other things. In 2000, the press heavily covered how central govern-ment dispatched five legal teams around the country to settle some of the most contro-versial land disputes. Farmers were given an opportunity to have an audience with them and to present their evidence. In the major-ity of the cases, the central government rep-resentatives sided with the farmers (Quynh, 2000b). In another article, the Deputy Prime Minister stated in an interview that

Some social and economic managers and administrative officials made serious mistakes (due to bureaucracy, lack of democracy, and acts of corruption, and wastefulness) and they dealt with issues unlawfully, unfairly and without transparency. The fact that these officials have not been dealt with openly gives rise to public concern (Vietnam News Agency, 2007).

Characterising the discretion that local, lower levels of government have exercised in land management is a complex mat-ter. Local government discretion has been alternatively depicted in the literature as rent-seeking, pragmatic entrepreneurialism and benevolent arbitration of local needs (Dapice et al., 2004; Fforde and de Vylder, 1996; Gainsborough, 2003; Han and Vu, 2008; Vinh and Leaf, 1996). While these newspaper articles generally portray district and ward officials in a negative light, there is also a discourse about ward officials practis-ing discretion in enforcing official policies in




order to provide pragmatic relief to citizens because they have personal relationships with their constituency and are held accountable because they live with them (Koh, 2004).

4.2 ‘Greedy’ Developers

In content analysis of newspapers, I could hardly find any articles about private land developers. Instead, factual news briefs would occasionally announce what a firm was build-ing and the amount of investment. Sometimes these briefs had a slightly positive tone, sug-gesting progress for the city. While I did not find newspaper articles portraying private developers in a negative light—like I did about local government—I did locate other narra-tives in my fieldwork interviews. I often heard sentiments that conveyed the illegitimacy of profiting through private land development. For example, one former deputy director of a state-owned real estate development company advised me that private developers were not worth researching because they used immoral means to profit. More significantly, I found this sentiment embedded in the Vietnamese real estate firms themselves. All of them dis-tinguished themselves from the idea of being a purely capitalist developer and downplayed the financial success of their activities. For example, one firm referred to their work as a “non-business” project because it was to house professors, even though people not directly affiliated with the university were also buying some of the 1000 units they had developed and which could be resold on the market. The director of one of the largest land devel-opment companies, a privatised state-owned enterprise, portrayed himself as an affordable housing developer because one or two of his projects were sold at below market prices and marketed to teachers. He emphasised that he had come from humble circumstances himself. In fact, the portfolio and project programmes of the largest, most successful firms even in the earlier stages of transition sometimes included

lower-income housing projects and public community amenities even though no regula-tions required them to do so. In contrast, the foreign joint-venture firms I interviewed did not try to tone down their success or assume egalitarian motives (Kim, 2008).

4.3 ‘Greedy’ Farmers

The displaced farmers were not immune from negative narratives either. For example, one real estate lawyer explained that most of her practice’s cases were disputes over land sale contracts. She said the farmer sellers are “greedy and dishonest” and she helps her customers to get their money back when they find that they cannot take possession of the land. Some of the landbrokers I interviewed also called some of the farmer family mem-bers greedy for refusing to agree to a saleable price that the other members of the family were willing to accept. State-owned real estate companies have also characterised holdouts as ‘greedy’ (Bui, 2009).

4.4 Missing Narratives

There were two parts of society which are major constituencies structuring fiscal socialism but about whom I could find no social narrative critiquing their role: con-sumers of urban real estate and the central government.

Of course, the real estate market and the transfer of property rights would not have happened without the surge in consumer demand for better and more housing, shops, etc. Another possible scapegoat in fiscal socialism could have involved the emerging middle class, particularly in a socialist soci-ety. However, I was never able to find such sentiments. Sometimes the press might have editorials from people nostalgic for the slow-er pace of life before transition but I could not find evidence of class warfare emerging.

A more obvious missing narrative is a critique about the state. No sizeable land



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development project is developed without approval by the Prime Minister’s Office. As applications make their way up through the bureaucratic chain, in the earlier years of transition, the district government would maintain regular, informal communica-tion with upper levels of government to gauge the likelihood of eventual approval. The informal communications were an important means of mitigating investment and property rights risks in an otherwise inhospitable business environment. Inves-tors were also advised by local government to begin development projects before offi-cial approval was received (Kim, 2008). In addition, local officials were incentivised to facilitate such collaboration with private investors since their performance is primarily rewarded for their jurisdiction’s contribu-tion to economic growth.

Others have noted that the central govern-ment seems to practise a strategy of policy ar-bitrage by first publicly criticising provincial leaders who try some new innovation that then might later be rolled out as national pol-icy if deemed successful. In Malesky’s (2004) content analysis for local autonomy in Viet-nam, only in 10 per cent of the instances were local governments officially allowed to ex-periment, while 35 per cent were waiting on their request for permission to experiment and another 50 per cent were experimenting without permission. So, intergovernmental relations exist on two planes—the formal, policy level in which the central government is hesitant to officially condone local auto-nomy and the informal communications which do seem to condone it.

Of course, the major reason that a narrative critiquing central government has not yet been circulating is because, as we saw in the case of VIDS disbanding and the imprisonment of bloggers, the central government is still able to effectively silence public criticism of itself, even from its own. Even as compensation

arrangements have improved from the early transition years, currently there appears to be an increasing clamping down on critical social discourse. Also troubling is that, although compensation rates and arrangements have increased, the recentralisation of land man-agement authority has led to an investment approval landscape which requires investors to be even more politically well connected and capitalised and has driven many local, Viet-namese firms out of businesses or to distant provinces. It may be possible that the earlier years of transition may have provided more market entry for small and medium-sized firms and innovation, as in China (Huang, 2008).

5. Interpretation: Narratives, Public Finance and Property Rights

Real estate developers say compensation practices had to change because the local district and city governments were no longer willing to pressure farmers to sell quickly. According to them, the compensation land-scape changed, starting in 2003 before the new land law was promulgated and decrees issued. In fact, when I was developing case studies of the first generation of Vietnamese private real estate developers, I found that they paid little attention to the many regu-lations that are issued from Hanoi each year (Kim, 2008). Instead, the developers’ perspectives suggest that local govern-ment started changing its practices due to increased social pressure being transmitted to the central government.

The case of changing property rights in Vietnam brings to our attention two factors which help to explain how bargaining power shifted to the less powerful in society: dis-cursive sources of property rights legitima-tion and changing intergovernmental fiscal relations. Neither of these is well developed in the property rights theory literature.




5.1 Discursive Sources of Property Rights Legitimation

This case study cannot prove a causal link between narratives and institutional change. Just because we have noted a sequence of events or that narratives and changes coincide does not extinguish the possibility of another factor that might have more significantly driven the changes in property rights practices and law. It is not possible to set up a counter-factual: would these changes have occurred had there been no social upheaval or backlash? For example, sometimes national govern-ments recentralise power to maintain control of renegade local governments for internal political reasons, rather than as a response to popular dissent. We cannot definitively know the relative degree to which the central government is responding to social discon-tent, operating out of its own bureaucratic logic, responding to some external force, etc. We also cannot pinpoint a time in which the stories piled up and tipped over social change.

Rather, this case does show that narra-tives are the process of institutionalising institutional change. When property laws changed in Vietnam, we find new narratives in the legal documents. Bureaucrats start telling a common story as to why they are now behaving differently. Stories are espe-cially salient to property rights because they, as legal theory tells us, are a social contract we must agree to. Property rights exist if the rest of society respects them and the terms of their boundaries, liberties, responsibili-ties and liabilities. In the midst of Vietnam’s incredible economic growth, there has been a widespread undertone of discontent being narrated by different members of society in how the property rights institutions have transitioned. The narratives of discontent are part of the process of renegotiating the social contract of property rights.

In this case, there was not one narrative of resistance, but competing narratives.

Different members of society told different stories about greed. Greediness by definition means taking more than one should, which denotes a breakdown in the social contract. Who were the greedy? The local govern-ments, the farmers, the developers? We also noted missing narratives; the central gov-ernment and consumer citizens buying the developed real estate are not criticised even though they have structured fiscal socialism and its transfer and compensation of proper-ty rights to land. We found that in Vietnam, publicly and formally criticising the national government is still taboo and effectively pro-hibited. In other words, the less powerful did not tell all the stories that could be told.

The existence of multiple narratives brings us to the question of how some stories get built up into common, social narratives and which of the competing narratives ‘wins’ and becomes institutionalised. In the case of Vietnam, an alliance between local citizens and central government could be forged to make the greediness of local government the predominant narrative. This storyline was carried repeatedly over the years in the newspapers which privileged the editorials of citizens with complaints of how district and ward governments had handled their compensation, had not followed plans prop-erly and other infringements. Ultimately, the narrative is repeated and institutionalised in the 2004 Land Law reform which singled out districts to “guarantee impartiality and equity” in compensation. Newspapers also carried interviews with high officials who called for ‘grassroots democracy’ at the local level. As narratives were built, state media reinforced the narrative of corrupt local officials.

5.2 Decentralisation and Recentralisation: Intergovernmental Fiscal Relations and Property Rights

This leads us to the second point which is that the reformation of property rights in this case



506 ANNETTE M. KIM

was intimately entwined with public finance. Who is given property rights to develop land has public finance implications as the govern-ment derives resources from property rights holders in the form of taxes, exactions, infra-structure development, etc. However, the management of this transaction can be done by different levels of government. In some respects, land is always a local issue because it is immoveable and enforcement must be situated there. Clearly, land management is a key arena for local government discretion in Vietnam. In one content analysis study of newspaper reports, land use right policy was the area in which local governments practised the most rule-bending and break-ing and innovation, accounting for roughly 22 per cent of all reports (Malesky, 2004). While local government might be able to match local conditions more closely, the decentralisation literature suggests that the national-level government might be better able to promote macroeconomic stability and inter-regional equity (Bird and Vaillancourt, 1998; Oates, 1972).

If we compare the Vietnamese case with other transition cases (Kim, 2006; Xu and Yeh, 2009), we see that the distribution of development rights and management of compensation seem to follow stages. In early transition, these are decentralised to lower levels of government in order to relieve the fiscal pressure on the central government. Later, with the public pushback appealing to higher authorities, they are recentralised. In the modern state and urban economy, there is an intimate connection between public finance and the property rights regime and this is the structure where the dominant social narrative was able to drive a wedge between local and central government to renegotiate the social contract.

What is interesting about the Vietnam case is that the narratives occurred in such a diffuse, societal process. There was not an agricultural collective or organised

grassroots group that focused the mes-sage of the new narratives. What is par-ticularly interesting is that those being displaced had so little legal standing or recourse and only limited formal arenas for voicing dissent or participating in governmental reform. The social pres-sure to change the rules was disseminated through social narratives: stories in the press, complaints made to individual bu-reaucrats and association leaders, citizens to citizens.

Note

1. The discussion in this paper is based on various kinds of data. The information about the changes in compensation practices was collected through the author’s interviews with the first generation of real estate developers who have been developing urban residential projects in HCMC for the past 10 years. I developed case studies of firms in 2000–01 (Kim, 2008) and then returned in 2004, 2008 and 2010 to re-interview the entrepreneurs and their associates in order to find how their land development practices had changed over time. I also interviewed ward, district and city-level bureaucrats who worked with the case developers on their projects as well as city planners. To analyse changes in laws and regulation, I examined legislation and referred to secondary literature and key informant interviews with national-level policy-makers governing land. Content analysis was conducted most comprehensively and systematically of Tuoi Tre from 1999 to 2006 while also gathering some helpful articles from other newspapers as noted in the references. Narratives operating outside the state-run media were detected through interviews and participant observation of those associated with the real estate industry and journalism: real estate developers, landbrokers, lawyers, bureaucrats, academics, buyers of real estate in HCMC and residents during field visits in 1996, 1998, 2000–01, 2004, 2007–08 and 2010.




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