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Reform in economic institution to promote restructuring and changing the economic growth model

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Despite its continuous improvements in the past 25 years, Vietnam’s economic institutions failed to act as a dynamic of economic restructuring and changes in economic growth model in the coming period. When the state fails to identify its functions and duties at all levels in economic management, it cannot control effectively all operations in the market. | 12 | Trần Du Lịch Reform in Economic Institution Reform in Economic Institution to Promote Restructuring and Changing the Economic Growth Model TRẦN DU LỊCH Doctor of Philosophy, National Assembly Economic Committee Email: tdulich.hcm@gmail.com ABSTRACT Despite its continuous improvements in the past 25 years, Vietnam’s economic institutions failed to act as a dynamic of economic restructuring and changes in economic growth model in the coming period. When the state fails to identify its functions and duties at all levels in economic management, it cannot control effectively all operations in the market. The state will be slow to change its habits of intervening in the market with its administrative decisions instead of indirect regulatory instruments used for dealing with market defects. In this paper, the author analyzes, interprets and make suggestions about two major issues: (1) Changes in concepts of economic functions of the state in the market economy; and (2) Effective use of macroeconomic regulatory instruments. Keywords: economic institutions, restructuring, economic growth model, economic growth, economic function, state, market economy, macroeconomic manipulation. JED No.215 January 2013 | 13 After 25 years of economic reform, the Vietnamese economy has gained impressive achievements: a pretty high and long-lasting growth rate, a more competitive economic structure; an HDI nearing the world average, and a position as a promising emerging market in international investors’ eyes. The model of horizontal growth based on cheap labor, exploitation of natural resources, and subcontract jobs has helped Vietnam develop from a backward and underdeveloped economy to a country with medium income (above the lower threshold); deal successfully with hunger and poverty; and improve its socio-technical infrastructure and living standard. Due to effects of the global financial crisis and economic recession, along with its effort to integrate fully into the world .