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Wednesday, 28 December 2016 14:08
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Correlations between PAPI and PCI (In the case of Ho Chi Minh City)

(LLCT) - The PAPI and PCI are complementary to each other rather than substituting each other. They provide objective information which helps authorities at various levels to review and adjust their regulations and policies which are no longer relevant and to strengthen the implementation of these regulations and policies.

Accelerating administrative procedure to build an open environmetn for business _ Photo: DC

1. Correlations between provincial Governance and Public Administration Performance Index (PAPI) and Provincial Competitiveness Index (PCI)

The PCI assesses and ranks provincial and municipal authorities’ creation of a favorable business environment for the private sector. The PAPI is based on ordinary people’s experiences when they interact with local authorities and what they think of their capacity for administration, state management, policy implementation and public service delivery. Both indices are aimed at providing an evaluation of the effectiveness of management and administration by the same object, provincial authorities, from the perspectives of ordinary people and the private sector(1).

Both the PAPI and PCI aim to assess the effectiveness of provincial authorities’ management and administration to encourage competitiveness among provinces. The similarity between the indices is that they are both related to themes of the administrative reform such as transparency, equality, control of corruption, unofficial costs, time costs, and simplification of procedures. The indices mention similar themes and are complementary to each other in certain areas. They are measured through two channels of information, citizens’ experiences and businesses’ feedback.

However, basically, they analyze different aspects because of their own orientations and purposes of research. They also have different structures and levels of analysis of indices and indicators of the effectiveness of administration.

The PCI measures the quality of economic administration at provincial level through businesses’ experiences during their interaction and work with provincial leadership and authorities.

The PAPI measures the performance of governance and public administration by evaluating issues of importance to the lives of people at grassroots level. For instance, the “participation at local levels” dimension focuses on the quality of election and the right to participate in infrastructure investment projects at local levels, and the “transparency” dimension measures the transparency of budget collection and spending, lists of poor households and land use planning/plans at commune and ward levels.

As far as objects of analysis are concerned, some dimensions used to measure the quality of administration by provincial authorities have similar names but different focuses. For “transparency”, provincial authorities can perform well when it comes to publicizing their budgets and land use planning documents on provincial or municipal portals, but commune or ward authorities may not have similar conditions for publicizing lists of poor households or local budgets. In addition, as far as the PCI is concerned, most businesses work with the same provincial authority (such as one-door services at provincial departments), so they tend to have similar observations of the quality and effectiveness of these services. However, in the case of the PAPI, people from a residential unit (neighborhood/village/hamlet) may have different opinions of the quality of these services because of the impact of such factors as demographics or social status.

From the above analyses, it can be seen that the PAPI and PCI are complementary to each other rather than substituting each other. They provide objective information which helps authorities at various levels to review and adjust their regulations and policies which are no longer relevant and to strengthen the implementation of these regulations and policies. This combination is meaningful in that information collected by the two indices help to identify possible injustice or discrimination so authorities can design solutions for overcoming them. The ultimate objective is to improve the quality of services delivered to businesses and people and foster sustainable development in provinces in particular and in the entire country in general.

2. Issues emerging from the improvement of the PAPI and PCI               

Ho Chi Minh City is a major cultural, scientific and technological center and an economic locomotive of the country. In 2015, it ranked 6th in the PCI and 47thin the PAPI (weighted). While it was in a good position in the PCI, its PAPI was only average. To be specific, its public administrative procedures and public service delivery were rated good, its transparency average, and its control of corruption in the public sector, vertical accountability poor. The 41-place gap showed that in addition to efforts to bring about a more active and more effective mechanism for facilitating the development of the private sector, the city’s authorities needed to pay more particular and thorough attention to the way they served people. The indices serve as reliable channels of information so the city can make use of its strengths and overcome its limitations. They also provide suggestions for the issuance of policies and regulations concerning the delivery of public services so as to create a better business environment for local people and businesses. Discoveries or recommendations by these indices can have an impact on certain aspects of these policies and regulations. The smooth combination of the PAPI and PCI also help the City’s Party Committee and administration to adopt a more comprehensive perspective when issuing and enforcing policies which are suitable for different local communities. 

The City’s achievements have marked a step forward in its path to integration and development and becoming a city with a good quality of life and one which is civilized and modern. Nevertheless, there are a lot of issues which the City needs to address in the coming time.

Firstly,its 2015 PAPI was low, ranking 47th out of 63 provinces and cities. Over the last 5 years, although the City’s Party Committee and administration have paid particular attention to improving the quality of its public service delivery, if its 2011 PAPI ranked 18th, its 2015 PAPI ranked 47th out of 63 provinces and cities, 29 places lower(2). Of the 6 dimensions of the PAPI, only two were rated good, public service delivery and public administrative procedures, two average, transparency and control of corruption in public services, and two under average, participation at local levels and vertical accountability. This shows that the performance of the City’s administration in serving local people was limited.

Secondly,the city’s competitiveness has not made a breakthrough. In 2014, for the first time in the 10 years of using the PCI, Ho Chi Minh City was among the top 5, ranking 4th. This was a result of the improvement of the efficiency of its administrative apparatus, especially the simplification of administrative procedures. In addition, the increase of administration-business dialogue aimed to solving the local business community’s problems create trust among businesses who felt encouraged to increase their investment. However, in 2015, Ho Chi Minh City dropped to the 6th place out of 63 provinces and cities(3). The drop was due to the fact the City’s administration did not pay attention to resolving pressing issues of the local society, its transparency remained limited and its fight against bureaucratic red tape and corruption was far from effective.

Thirdly,the City’s 2015 PCI showed a few worrying trends. For example, its efforts to cut down on unofficial costs and create an equal playground for the private sector were not fruitful. More than 11 per cent of the country’s businesses who took part in the survey reported that their unofficial costs accounted for more than 10 per cent of their total revenues. 65 per cent of the businesses said bureaucratic red tape was common. In Ho Chi Minh City, this proportion was lower than in the rest of the country, but without timely solutions it would still have a considerable effect on the development of the City. As for private businesses, the business environment in the city had yet to see equal competition. In the City’s 2015 PCI, the rankings of the most important dimensions dropped the most sharply, transparency down from the 4th rank to the 17th rank, and unofficial costs down from the 42nd rank to the 54th rank(4).    

Fourthly,attention to medium- and small-sized businesses has been limited. A good number of these businesses are still fraught with difficulty in accessing resources such as capital and land and updated policies and laws. They have had to shoulder the burden of unofficial costs, but have not been entitled to quality business support services at reasonable costs. It is noteworthy that most state preferential land policies focus on the building and establishment of large-scale industrial parks and clusters, but medium- and small-sized businesses cannot afford to access these places because of conditions (such as minimum land areas), costs (such as high rentals, one-time payment and high regular costs) or unsuitable locations. Private businesses have rated Ho Chi Minh City as having the best infrastructure. However, a comparison of the PCI and infrastructure index shows that while many provinces know how to overcome their infrastructure limitations with good administration and facilitation of the business environment, Ho Chi Minh City has yet to make full use of its advantages to increase investment attraction through added values such as creating a liberal, friendly business environment for businesses.

3. Some recommendations    

In the coming time, to increase the effectiveness of the PAPI and PCI, Ho Chi Minh City needs to be more transparent and proactive in providing information for the public in meetings and dialogues between the administration and people. It needs to respond to legitimate questions from businesses. It seriously needs to publicize its planning, design land use plans and a land price system and ensure equality in land recovery compensation for all demographic groups. At the same time, the City needs to intensify its efforts to control corruption. The 2015 PAPI revealed that corruption was still prevalent and tended to increase. Therefore, the City needs to introduce specific action plans for the prevention and control of corruption in addition to mechanisms encouraging officials, civil servants, employees and ordinary people to participate in the prevention and report of corruption at all levels.

The City needs to speed up the building of the e-government and creation of a transparent, equitable, liberal business environment; continue to improve the organization and operation of authorities at all levels so they suit the size and character of a special-grade city, improve their performance, and ensure their autonomy and self-responsibility in decision-making and policy implementation within their assigned authority; pay attention to the work of summarization to overcome timely limitations, point out lessons to be learn, and avoid repeating the same shortcomings or weaknesses; and, at the same time, strengthen administrative order and discipline, and punish civil servants who are found to be troublesome, indifferent or corrupt. Only by doing so can Ho Chi Minh City become a livable, civilized, modern place which serves as a socio-economic engine of the southern region of the South and of the entire country.


(1) LeDang Doanh: “Comparing the PAPI and PCI: Questions which remain unanswered”, http://www.thesaigontimes.vn.

(2) Many authors: “Higher stature for a special municipality”, the Youthnewspaper, issue 105/2016, p. 5.

(3) Tan Duc: “PCI 2015: Much easier market penetration”, the SaiGon Economic Times, issue 14-2016 (31 March 2016), p. 65.

(4) Mai Huong: “Many officials spend people’s money mercilessly”, the Youthnewspaper, issue 112/2016, p. 3. 

Pham Ngoc Hoa



Ho Chi Minh National Academy of Politics Zone IV 


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