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This paper examines the changing role of the public sector in financing and provision of social services and safety nets in Vietnam, and assesses its efficiency in targeting public resources to the poor in the wake of the important economic, policy reforms initiated in 1989. Much of the analysis draws on distributional data generated by the Vietnam Living Standards Survey of households and rural communes carried out in 1992-93. The paper analyzes the sources and uses of funds for education, health, and social transfers; and highlights the emerging importance of public sector pricing policy and private out-of-pocket expenditures in social sector financing. Against this background, the paper evaluates the benefit incidence of public spending in terms of the distribution of per capita subsidies and the relative shares of total subsidies accruing to different expenditure quintiles.

Publisher: World Bank

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