Vietnam's Evolving Poverty Map : Patterns and Implications for Policy

This paper uses small area estimation
techniques to update Vietnam's province and
district-level poverty map to 2009. It finds that poverty
rates continue to be highest in the northern and central
mountainous regions, where ethnic minorities make up a large
fraction of the population. Poverty has fallen in most
provinces and districts over this decade, but the pace of
poverty reduction has been least pronounced in those
localities with high initial poverty or inequality levels.
As a result, poverty rates have become more spatially
concentrated over time, which is consistent with widely
observed growth processes linked to agglomeration. The
authors hypothesize that this makes geographic targeting of
the poor more relevant as a means to re-balance growing
welfare disparities between geographic areas. Simulations
indicate that in both 1999 and 2009, geographic targeting
for poverty alleviation improves upon a uniform lump-sum
transfer and this becomes more evident the more spatially
disaggregated the target populations. The analysis further
indicates that the gains from geographic targeting have
become more pronounced over time in Vietnam. Although
poverty reduction in Vietnam has been impressive, further
progress may thus warrant increased attention to geographic targeting.