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The role of the State on public services in the context of market economy development and administrative reform

(LLCT) -  In the context of market economy development and administrative reform, the State not only organizes and manages the society through legal institutions but also through satisfying the essential needs of people - providing public services for the society. In order to well perform this function, it is necessary to renovate and clearly define the roles and functions of the state apparatus in general and its roles and responsibilities in public service delivery in particular in order to improve the quality and the effectiveness of this activity, better satisfying the increasing demands of the people and society, achieving the goal of sustainable socio-economic development and building the State stronger and better.

Key words: the role of the State, public services, administrative reform.

The Democratic Republic of Vietnam (now referred to as the Socialist Republic of Vietnam) has clearly defined the nature of the State which is of the people, from the people and for the people, always placing the interests of the nation and the people on the top priority. In all periods, the Party and State of Vietnam always attach importance to the care of all aspects of the people’s life, promote the development of production, health and education, etc. to increase the material and spiritual life of the people. However, the gap between expectations and reality still has certain distances. Vietnam is still a underdeveloped country, the level of satisfaction of the demand for services is still limited.

In the context of the socialist-oriented market economy development and opening up for international integration, Vietnam needs to step up the reform of the public administration in order to develop and perfect the socialist rule-of-law state. The contents of administrative reforms are aimed at building a democratic, transparent, robust and gradually modernized administration in order to better serve the basic and essential needs, ensuring the rights and the sense of basic services of the people, in which the change of roles and responsibilities of the Government and the State administrative apparatus in the management and organization of public service delivery is an important task to be solved.

The 9th Party Congress clearly stated “to encourage and support organizations to operate not for profit but for the needs and interests of the people; to facilitate organizations to implement a number of public services with community supervision such as environmental sanitation, participation in public security and order”(1). The 10th Party Congress continued to affirm “to fundamentally reform the management mechanism and method of providing public services”(2). The 12th Party Congress specifically identified the ideas on this issue: “to implement the market mechanism and promote socialization of the provision of public services. For essential public goods and services, including medical and educational services, whose prices are controlled by the State, it is important to ensure the publicity and transparency of price constituents; to calculate all prices correctly and fully, and to strictly implement the policy of market prices with an appropriate roadmap. At the same time, to support for policy beneficiaries, the poor and ethnic minorities. To encourage enterprises of all economic sectors to participate in the provision of public services, especially public-private partnerships. To ensure equality between public and non-public service units. To diversify the form of socialization of public service delivery units such as piloting equitization of public service delivery units; assigning the community to manage, leasing material facilities and assets of the State for the provision of public services, and implementing the mechanism of public-service units operating as public utility enterprises”(3).

To implement the guiding ideals of the Congress, the 6th Central Resolution of the 12th term National Assembly on continuing the renovation of the organizational and management system, raising the quality and effectiveness of public non-business units. “To fundamentally and comprehensively renovate the system of public non-business units, to ensure the streamlined, rational structure, capable of self-control, advanced management, operation and effectiveness; to play the key role in the public service delivery market; to provide public non-business and basic services with essential and increasingly high quality... To develop the market of public-service services and strongly attract economic sectors to participate in the development of public services(4).

The Government’s Comprehensive Administration Reform Master Program for the period of 2001-2010 sets out the requirement: “To develop the correct concept of public services. The State shall be responsible to take care of the people’s material and cultural life, but not all public services are handled by state agencies. In each sector, it is necessary to specify the tasks that the State must invest and directly implement, and the tasks to be assigned to social organizations”. The overall program of 2011-2020 public administration reform continues to affirm: “to comprehensively reform and implement the autonomy and self-responsibility of public service delivery agencies”; “To renovate the mechanism of operation, especially the financial mechanism of public service delivery units; step by step to implement the policy of adjusting public service delivery costs accordingly, etc.”(5)

Legally, many legal documents related to public services have been issued. The Law on Organization of Government (2001, 2015), the Law on Organization of Local Governments (2015), such Decrees as (36/ND-CP, 123/2016/ND-CP) on the organizational structure of ministries, ministerial-level agencies and local authorities clearly stipulate that the management of public services is one of the main functions of the state administrative apparatus. Along with the promotion of economic reforms and administrative reform, the Government has issued a number new policies and guidelines to separate state administrative management from public service activities, promoting socialization and innovation. Financial mechanism for public service delivery agencies.

Thus, in Vietnam, in the context of market economy development and administrative reform, the role and responsibilities of the State for public services have been clearly defined in the policies and guidelines of the Party as well as in the legal regulations. The role and responsibilities of the State in public services are as follows:

To directly organize the implementation of some public services.

Public service is one that the State is responsible for, so the State must directly provide some public services through its agencies. However, when directly doing this, the State needs to study and determine what services and corresponding scope really need to be directly performed by the State to avoid too much embrace with its capacity, especially regarding financial and human resources.

The general trend of the world today is that the State shall directly implement such public services that the society cannot do or do not want to do. In the context of Vietnam, the State has promoted the socialization of public services, namely education, health, cultural and social services, and decentralize the local authorities for direct management and implementation of public services directly related to the life of citizens and the community. The Government, the Ministries directly carry out the provision of important services requiring high quality and profession. Regarding such public services that the society can undertake, the State transfers, encourages, facilitates social organizations, economic and private organizations to implement in the orientation and support of the Government. Such public services that, after a period of time, can be fully taken up by the society and accepted by the people at market prices shall be converted into regular services.

- To formulate general and uniform mechanisms and policies, perfect mechanisms and policies for each type of public service.

Collectively referred to as public services, but there are various types and in each type there are many specific forms of services with their own characteristics. Engaging in the provision of these services in modern social conditions, there are many different actors: the State, the market, social organizations, individuals, etc.. In the public sector, there are also a number of different subjects: administrative bodies, non-business units, and state enterprises. The provision of services by different operators are for different purposes. Therefore, the State must develop a system of mechanisms and policies for the provision of public services as a legal basis for organizing and directing. At the same time, it is also the basis for social organizations and citizens to select and participate in the delivery of public services effectively.

On the other hand, the development and completion of policies on public services is to ensure that public goods and services are delivered to the beneficiaries, to minimize any loss of service organizations. In some areas, it is necessary to study the mechanism of direct service budget allocation for service beneficiaries, and to remove the mechanism of allocation through implementation unit. In the field of education, for those who are subsidized, it can be studied to decide to replace funding for schools by funding for students to find their desired schools, or in the health sector, the similar policy can be applied to funding for health insurance for the beneficiaries. In other areas, such as legal aids for beneficiaries under the Law on Legal Aids, the application should be more flexible, in addition to the current one, it is necessary to add the method of payment via banks to the involved parties for self-selection of suitable organizations and individuals.

In short, the development of public policy mechanisms for public services needs to ensure:

- To regulate and control organizations, enterprises and individuals in providing public services upon regulations, namely price and quality of services, service providers, etc..

- To encourage all economic sectors to participate in the provision of public services, reducing the burden on the state apparatus.

- To directly support the consumers with tax exemption policy, tuition fee exemption, scholarships, exemption from other contributions for each type of beneficiaries, subsidies through services price.

- Keep investing in both public finance and service delivery systems.

For social non-state actors, the provision of goods or services is profit-oriented. Immediate profit and personal profit are the most priority without taking into account the social effects, long-term efficiency; such issues on labor, environmental protection, and resource protection are often ignored, or these organizations are not able to handle them. On the other hand, because of the characteristics of public services, for many services, the provider does not collect enough money to cover costs and make a profit.

As a result, only the State can meet the requirement of power, manpower and material resources to be able to provide, regulate and control the provision of necessary public services to meet the needs and interests of the whole community. The State can mobilize state budget revenues and make plans to invest in the creation and distribution of public services to the society. The mobilization of people’s contributions in practice is not the same, but the level of public service consumption does not depend entirely on that level of contribution. In many cases, individuals can consume the same amount of public goods and services despite their different contributions and the state budget will suffer from shortages if there is excessive consumption of individuals.

In addition to increasing financial investment, the State needs to establish a network of diverse public service providers - including a wide range of different sectors and societies which are able to provide different type of services with adequate, high quality, and reasonable price. However it is unreasonable to mention about the responsibility and effectiveness of public service delivery if the network of the system providing these services is not well developed. Therefore, building a network of public service delivery agencies is an important task of the State.

- constantly improving public service delivery.

In order to improve the quality of public service delivery, the State must constantly improve the provision of public services both at the macro level and in specific supply activities.

At the macro-level, improvement is primarily directed at identifying what types of public services really to be provided by the State to the society, the degree of state intervention, direct or indirect through financing or simply by setting standards of quality and price; At the same time, there is an expanding involvement of social actors in line with the need to provide public services. To assign and decentralize to the various levels of government responsible for the provision of public services to the society and citizens. In order to meet the demands of the people, the State must constantly adjust and reform in this area.

Reforms of public service delivery are:

- Promoting competition among service delivery organizations;

- Assessing the performance of public service delivery organizations based on the output rather than inputs;

- Considering the consumers to be the customers who are entitled to the rights of choosing;

- Decentralization of power and application of co-management regime;

- Replacing bureaucracy by market mechanisms;

- Catalyzing the public and private sectors so that they volunteer to participate in solving community problems.

While public service delivery at the macro level requires continuous reform, more specific service delivery activities need to be continually improved. However, it is necessary to take into account of different characteristics of each type of service to make improvements accordingly. For example, for public administration services applying electronic technology, e-government should be step by step developed to provide services to the people. Thanks to electronic technology, the provision of services to people through various channels such as telephone, Internet, electronic kiosks, networked websites, etc. is faster, more convenient and transparent. Or, in the provision of health and education services, more attention must be paid to the vulnerable, with the real need for assistance, such as poor refuge, unplanned orphans, people with disabilities, people in disaster areas, floods, major fire, etc.

- Various interventions are developed and applied to be suitable for different actors involved in the delivery of public services.

Regarding all of the public service delivery activities mentioned above whether being conducted in any form, the State is also responsible to the society for providing them, in order to serve the vital needs of the public, the community, and to meet the development requirements of the society. To do that, the State has many different ways of intervening.

Interventions and adjustment are made according to the financial source directly assigned to organizations or through contracts of supply at rates of 1% to 100%, thereby deciding or regulating the supply of goods and services in terms of quantity, quality, price, time and beneficiaries according to the regulations of the State.

Regulatory intervention. This is the least costly intervention method. In this way, the government allows the market to provide public services, but sets out a system of regulations to manage services provided by non-state actors, such as the State defines the regulations on quality and price to limit monopoly or regulations on food safety, pharmaceutical standards, hygiene and fire prevention regulations in restaurants and hotels; regulations on finance - accounting; regulations on education and health services, etc. Or the Government allows private enterprises to provide electricity and water for the people, but applies a number of mandatory regulations to these enterprises, such as requirements for enterprises to supply electricity to remote areas, and regulations on electricity and water supply prices.

Public service providers in principle must be subject to the State’s control in many aspects in order to serve the social objectives of the State. These interventions are necessary, but sometimes this intervention is excessive, making its operation ineffective or suppressing their development dynamics.

- Strengthen inspection and control activities

The fact that the State allows private enterprises to provide public services and only indirectly interferes with these activities may also cause a number of conflicts. When the State contracts with private organizations to provide public services, it is difficult to completely determine the characteristics and quality of the services to be provided. Therefore, the State’s inspection, control, ensuring fairness, and ensuring quantity and quality of service provision are essential. This is also the main task of the state management function.

Therefore, in the context of the socialist-oriented market economy development, the State needs to innovate its role and functions, in general and its role and responsibilities for public services, in particular. However, this innovation is not about reducing but on the contrary, it is necessary to clearly define and enhance the role of the State in managing and providing public services for the people and society, to clearly specify the functions, tasks and responsibilities of the Government, Ministries, branches and local administrations at all levels in managing and providing each type of public services; to implement and ensure social justice, to support the poor and policy beneficiaries, and to overcome the negative impacts of the market economy. Generally, those innovations are:

- Clarify and distinguish the state management from public service providers; clearly identify public services directly provided by state agencies; promote decentralization to local authorities at all levels. Strictly follow public and transparent policies in the management and provision of public services; to strengthen the role of people in monitoring and evaluating the effectiveness and quality of public service delivery.

- Complete and perfect the public service institutional system, management and policies on the basis of clearly distinguishing public service organizations and activities from state management and production and business management. Develop a management and organizational mechanism suitable to the characteristics and features of each type of service. Clearly specify the responsibilities, objectives, contents of activities and quality of services, while ensuring autonomy of public service providers.

- Prepare planning and reorganize the system of public service providers according to the requirements of improving the quality and efficiency of the public service network throughout the country, as well as in each field, each region and each locality. Develop the public service delivery network which is not necessary depend on the administrative boundaries but can be based on each area, each residential area, depending on the characteristics and nature of the service and the needs of the people. Strongly develop non-state public service providers. Renovate the mode of public service delivery in accordance with the characteristics and features of each type of public services, each type of beneficiaries, each region and territory, ensuring the most convenient service for the people.

- Develop professional human resources in the field of public service provision. Prepare and issue appropriate policies for the workforce in the field of public services in terms of training, fostering, salary, allowances, insurance, rewarding, honoring talents, experts, etc. that is suitable to the characteristics and features of different industries and regions.

- Renovate financial and budget management mechanisms for public services. The State invests a reasonable budget for public services, and at the same time strongly attracts social resources to participate in the provision of public services. Improve the efficiency of the State investment and promote the resources of the whole society for public service activities. Restructure state budget expenditures for public services in the direction of focusing appropriate investment on the provision of the most essentially fundamental services; meeting the national priorities; serving the people in mountainous areas; supporting the poor and policy beneficiaries. Apply the method of allocating budgets to public service providers in the direction of transferring the funding allocation mechanism to suppliers to providing direct financial support to service beneficiaries; transfer the mechanism of input-based funding into output-based one according to the quantity and quality of services.

- Develop a system of tools, inspection and control mechanisms of the State and supervision mechanism of the people for the operation of public service providers. Promote the role of the mass organizations and unions, especially professional associations, in supervising public service provision activities.

In summary, Vietnam has made an important development in developing a service state in the context of transition to the market economy. However, these are only initial achievements, Vietnam needs to continue to innovate and clarify the role and responsibilities of the State for public services not only for the State to better satisfy the needs and benefits of the people with the goal of “ensuring progress and social justice right in each step and each development policy” but it is also an important condition to promote the socio-economic development and building the State stronger n



(1) CPV: Documents of the 9th General Party Congress, National Political Publishing House, Hanoi, 2001, p.217.

(2) CPV: Documents of the 10th General Party Congress, National Political Publishing House, Hanoi, 2006, p.202.

(3) CPV: Documents of the 12th General Party Congress, Office of Central Party Committee, Hanoi, 2016, pp.276-277.

(4) CPV: Resolution No 19 - NQ/TW, dated October 25, 2017 issued at the 6th Meeting of the 12th Central Party Committee, on continue renovating the organization and management system to promote the quality and effectiveness of the operation of public service units, thuvienphapluat.vn.

(5) Resolution No 30c/NQ-CP dated November 8, 2011, issuing the General program on State administrative reform, 2011-2020 period, thuvienphapluat.


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