State policy on small and medium enterprises (SMEs) : a case study of morally sensitive enterprises of district 1 In Ho Chi Minh City

Abstract

Thanks to the transformation to market economy and international integration of Vietnam, the role of private sector takes a vital part in the economy, in which SMEs take over 95% of the total number. However, despite their significant contribution, SMEs working in “sensitive” services still have faced many obstacles when obtaining the business registration certificate in Ho Chi Minh City. The purpose of the research is to study the factors influence issuance of business registration certificate for “sensitive” SMEs in the context of Vietnam’s transformation to market economy and WTO penetration. Findings from the study prove that issuance of business registration certificate for sensitive enterprise is complicated, non-transparent, and unreasonable. Especially, contrary to the hypothesis, the study finds various opposite viewpoints of officials due to their ideology. Based on the findings, it can be concluded that this policy failed due to some reasons: (i) bias of conservative officials against “sensitive” businesses; (ii) inadequate interpretation of the policy by street-level bureaucrats; (iii) poor knowledge of the public about regulations on the business registration; (iv) traditional prejudice of the public perception as well as mass media towards private sector. Overall, in the context of economic transition and global integration, two conflict principles market economy versus social morality also contribute to the policy failure. Last but not least, in order to close this research, the author recommended prospective researches researchers pay much more attention to actions and the role of street-level bureaucrats when studying policy implementation in Vietnam.