Performance Legitimacy

Performance legitimacy created a new relationship between the state and its citizens. Marxist Leninism located the party state at the center of public life. Transforming this orthodoxy, economic reforms during the 1990s repositioned the party state as an economic manager that was responsible for increasing the living standards of citizens (Nguyen Reference Nguyen2016; Dukalskis and Gerschewski Reference Dukalskis and Johannes2017). Performance legitimacy has generated public expectations that the party state is accountable for economic development and social well-being (Le Hong Hiep 2012; Ortman Reference Ortman2017). As citizens became more prosperous, public interest standards changed from economic development at any cost to trade-offs between development and environmental protection (Ortman Reference Ortman2017). Reflecting this shift in the public interest, 77 percent of respondents surveyed in 2018 thought that the Vietnamese state should prioritize environmental protection over economic growth, employment, and consumer protection (Public Administration Performance Index 2018).

Procedural Legitimacy

Reforms designed to confer a semblance of democratic accountability (Dukalskis and Gerschewski Reference Dukalskis and Johannes2017; Stromseth, Malesky, and Gueorguiev Reference Stromseth, Malesky and Gueorguiev2017) and law-based governance (Fu et al. Reference Fu, Gillespie, Nicholson and Partlett2018) have elevated public expectations for procedural legitimacy. Appeals for democratic and legal legitimacy have generated an expectation that officials should not only follow the procedures proscribed by law but also facilitate public participation in decision making (Nguyen Reference Nguyen2016; Gillespie and Nguyen Reference Gillespie and Hung2019). Citizens are no longer content to act as passive spectators and want to express preferences about laws and policies (Birney Reference Birney2017; Gillespie and Nguyen Reference Gillespie and Hung2019). For example, citizens are increasingly participating in the limited opportunities available for public participation in government decision-making processes, such as legislative drafting (Nguyen Reference Nguyen2016) and EIAs (Ortman Reference Ortman2017).

Public expectations to participate in decision making are moderated by the knowledge that state agencies, such as courts, rarely force officials to comply with laws and processes (Gillespie Reference Gillespie2017; Fu et al. Reference Fu, Gillespie, Nicholson and Partlett2018). In addition, citizens are well aware that the party state actively co-opts and controls public participation (Kerkvliet Reference Kerkvliet2019). Many believe that officials respond to public participation out of benevolence or to increase the legitimacy of particular laws and policies (Stromseth, Malesky, and Gueorguiev Reference Stromseth, Malesky and Gueorguiev2017; Benedikter and Nguyen Reference Benedikter and Loan2018; Kerkvliet Reference Kerkvliet2019).

Public Prestige (Uy Tín) Legitimacy

Government efforts to promote performance and procedural legitimacy have not extinguished public expectations for moral governance. For centuries, rulers in Vietnam have claimed legitimacy by cultivating an image of prestige based on morality and uy tín (Vasavakul Reference Vasavakul and Alagappa1995; Fforde and Homutova Reference Fforde and Lada2017). While the basis for determining morality has changed from neo-Confucian virtues and revolutionary morality to a contemporary emphasis on regulatory capacity, demonstrations of uy tín remain important sources of public legitimacy (Endres Reference Endres2014; Malesky and Ngoc Reference Malesky, Ngoc, Chen and Meredith2019).

Previous studies have revealed a strong correlation in Vietnam between public expectations that officials should act with uy tín and a publicly acknowledged right to rule (Vasavakul Reference Vasavakul and Alagappa1995; Fforde and Homutova Reference Fforde and Lada2017). This correlation applies especially at the local government level, where key decisions regarding PPPs are made. Local officials are expected to demonstrate a moral capacity to govern (Malarney Reference Malarney1997). As Kirsten Endres (Reference Endres2014, 619) notes, “according to popular conceptions of virtuous leadership, a state official should be good hearted with the people and act in their interests.” The public holds officials accountable to public standards of virtue (đức) and extends legitimacy to governments that possess uy tín, particularly moral prestige (đạo đức). This legitimacy expectation corresponds to a public interest that officials should follow publicly determined standards of ethical behavior.

To summarize, the public interest in Vietnam draws on three distinct baseline standards:

1. 1. The public expects official decision making to reflect publicly determined standards that balance economic development and environmental protection.

2. 2. The public expects officials to follow procedures proscribed by law and to facilitate public participation in decision making.

3. 3. The public expects officials to display uy tín by following publicly determined standards of ethical behavior.

Another key question is who should determine the public interest? In liberal democracies, state officials owe an obligation to reflect and respond to the views of the demos—that is, ordinary citizens—or the electorate (Bozeman Reference Bozeman2007; J. Johnston Reference Johnston2016). Governments in socialist Asia are not democratically accountable, and, consequently, state officials do not owe an obligation to reflect the interests of the demos (Nguyen Reference Nguyen2016; Zhu and Chertow Reference Zhu and Marian2017). However, they do owe a duty to a narrow category of citizens directly affected by official decisions.

Appeals for public legitimacy have excited support within the state for the public interest. Reforms aiming to professionalize the bureaucracy have encouraged state officials to act more like public servants and develop policies that aggregate and reflect the interests and preferences of particular categories of citizens (Le Hong Hiep 2012; Nguyen Reference Nguyen2016). For example, Article 8 of Law no. 22/2008/QH12 on Cadres and Civil Servants requires Vietnamese officials not only to “strictly observe the party line and policies” (democratic centralism) but also to “respect the people and devotedly serve the people.”Footnote ¹⁰ Public administration reforms have created a type of responsive regulation that expects officials to respond to the interests of stakeholders directly affected by official decisions (Braithwaite Reference Braithwaite2006; Zhu and Chertow Reference Zhu and Marian2017). Four key research propositions can be drawn from this discussion:

1. 1. Stakeholders who are directly affected by PPPs determine the public interest.

2. 2. Official decision making is evaluated according to publicly determined standards that govern economic and environmental outcomes, procedures, and ethics.

3. 3. Public interest violations are determined by assessing the fundamental (in)consistencies and (in)congruence between publicly determined standards and decision making in PPPs.

4. 4. Public interest corruption occurs when there are fundamental violations of publicly determined standards (M. Johnston Reference Johnston1996; Wedel Reference Wedel2012; Zaloznaya Reference Zaloznaya2014).

Data Collection

This study compared corruption in two different PPPs in northern Vietnam. The PPP in Lào Cai Province was established to construct and operate a new market in a thriving provincial city on the Chinese border, whereas the PPP in Điện Biên Province quarried gravel for the construction industry in a remote mountainous area. The cases were selected to contrast how stakeholders from different economic and social backgrounds established baseline standards for determining appropriate behavior in PPPs. The study used a two-step process to determine the public interest. First, the key stakeholders were identified by establishing which groups were directly influenced by the PPPs. In the Lào Cai case, the key stakeholders were the owners of stalls affected by the market redevelopment, whereas the key stakeholders in the Điện Biên case comprised farmers who were affected by the polluted waterways and villagers harmed by the dust emissions from the quarry.

Second, the key stakeholders were interviewed to identify the standards they used to evaluate the PPPs (see the list of interviewees in Appendices 1 and 2). In the Lào Cai study, there were eighteen interviews and four group interviews, whereas in the Điện Biên study, there were fifteen interviews and five group interviews. The respondents were identified using a combination of purposive, niche, and snowball sampling methods (Atkinson and Flint Reference Atkinson, John, Lewis-Beck, Bryman and Liao2011). In-depth interviews were conducted with provincial, district, and commune officials as well as with private developers directly involved in the PPPs. Leaders of people’s committees at the provincial, district, and commune levels provided introductions to the officials who were directly involved with the PPPs. The head office and site managers were approached to arrange interviews with the developers.

In the Lào Cai study, personal introductions were used to select stall owners directly affected by the new market development. Interviews with farmers and villagers in the Điện Biên study led to introductions with the key stakeholders directly affected by the quarry. Additional interviews were conducted with reporters who were familiar with the environmental harm caused by the quarry. Four members of a research team from the National Economic University in Hanoi conducted the interviews in Vietnamese. The interviewees were encouraged to conceptually evaluate the objectives, processes, and ethical practices underlying the PPPs. They were asked open-ended questions, such as “what are the characteristics of a properly managed PPP?” and “to what extent have you and your communities’ expectations regarding the development been realized?” Narratives—the stories that respondents tell each other—were employed to identify norms and cognitive assumptions underlying the publicly determined standards. Narratives function as resources that support, challenge, or undermine conceptions of corruption (Nuijten and Anders Reference Nuijten and Anders2007). They shift our understanding of corruption from a fixed phenomenon caused by interacting variables—a political economy explanation—to a dynamic socially constructed phenomenon. They also suggest that views regarding what constitutes corruption are formed inter-subjectively within social groups (Wedel Reference Wedel2012; Zaloznaya Reference Zaloznaya2014). Narratives direct our attention toward the socially situated interactions where the meaning of corrupt behavior is constructed and performed.

Respondents faced an incentive structure that encouraged them to frame answers that avoided political sensitivities, such as evidence of bribery and regulatory opacity. To minimize preference falsification, follow-up interviews revisited key issues to determine whether respondents changed their stories in any material aspects. Interview data was then cross-checked and augmented with written sources, such as research reports and newspaper articles. Reports in online newspapers including Báo Tài Nguyên Môi Trường, Môi Trờng và Đô Thị, and Báo Tin Tức were used for background information about the case studies. Although useful in supplementing and cross-checking the interviews, these reports described corruption from the standpoint of the party state and rarely considered what citizens thought about malfeasance. Ancillary interviews were conducted with government officials, lawyers, and developers familiar with the PPPs. Most interviews were conducted on the condition of confidentiality.

Despite experiencing difficulties gaining access to sensitive information, the in-depth interviews revealed subtle preferences and dynamic interactions and were sufficiently rich in detail to provide insights into how the key actors conceptualized the appropriate standards that should govern PPPs.

Data Analysis

Data analysis proceeded in two stages. First, interview data were analyzed to identify the main publicly determined standards relating to the PPPs. To assist this process, the standards were disaggregated into the previously discussed public interest categories (that is, economic and environmental outcomes, procedural conformity, and ethical standards). Second, the analysis then examined whether the decision making by the PPPs fundamentally violated the publicly determined standards of behavior. A fundamental violation occurs when the standards followed by the PPPs have decoupled from, and conflicted with, the public standards determined by the stakeholders (Wedel Reference Wedel2012; Zaloznaya Reference Zaloznaya2014). One way of evaluating conflict is to examine normative and cognitive (in)compatibilities between the competing standards. Systems theory posits that fundamentally incompatible standards lack a common normative and cognitive grammar in which to identify common ground and reconcile differences (Hiller Reference Hiller, de Graaf, von Maravic and Wagenaar2010). Normative thinking transforms descriptive narratives about how PPPs are organized into prescriptive narratives about the standards that should regulate PPPs (Granovetter Reference Granovetter, Nee and Swedberg2007; Wedel Reference Wedel2012; Zaloznaya Reference Zaloznaya2014). Normative differences suggest conflicts regarding what constitutes the correct way to accomplish desired goals or allocate state assets.

Cognitive differences point to fundamental and irreconcilable disagreements regarding the appropriate standards governing PPPs. While normative thinking is reflective and thus open to persuasion and change, cognitive thinking is tacit, taken for granted, routinized, and reflexive (De Graaf Reference De Graaf2007; Granovetter Reference Granovetter, Nee and Swedberg2007). It forces external information, such as conflicting standards, into existing mental models, preventing or slowing the adjustment to innovative interpretations and adaptation that might lead to preference convergence (Hiller Reference Hiller, de Graaf, von Maravic and Wagenaar2010). The implication of this research is that public interest corruption occurs when there are normative, and especially cognitive, conflicts between the standards guiding PPPs and publicly determined standards (M. Johnston Reference Johnston1996; Wedel Reference Wedel2012; Zaloznaya Reference Zaloznaya2014).

Background

This study explored the redevelopment of a traditional market in Lào Cai, a regional city on the Chinese border. The original nineteenth-century market was destroyed during the war between China and Vietnam in 1979 (Endres Reference Endres, Kirsten and Leshkowich2018). It was rebuilt in 1996 and extended in 2004, with the market benefiting from the cross-border trade that flourished after China and Vietnam normalized their relationship during the late 1980s. In 2013, the Lào Cai Provincial People’s Committee decided the market was unsafe and needed redevelopment. The proposed redesign significantly increased the size of the existing market. To raise the investment capital (468 billion VND, approximately twenty-one million US dollars) and oversee the project, the People’s Committee established a Local Development Investment Fund (LDIF) to act as an investor (chủ đầu tư). The LDIF functioned similarly to a PPP in drawing together officials from the Market Management Board (Ban Quản Lý Chợ) and the People’s Committee, on the one side, and private investors, on the other. It took investors many years to convince the People’s Committee to transfer the market, which was a public asset, to the LDIF. As one member of the LDIF recalled, “getting a BOO [Build Operate and Own] license is not easy. It is usually difficult to get land use right certificates for market land, but this one was ten times harder.” Under the terms of the BOO license, the LDIF gained control over the new market for seventy years. Consistent with developments elsewhere in Vietnam, the PPP in this case was not established under statutory guidelines, such as the Decree no. 5/2015/ND-CP on Public Private Partnerships (Lebbe and Musil Reference Lebbe and Clement2013; Lê Hiệp Reference Lê2019).Footnote ¹¹ Rather, the local government preferred a loosely structured, informal alliance with private investors.

The LDIF could not raise the investment funds entirely from the private sector and turned to the owners of the market stalls for additional capital. In return for a ten-year rent moratorium, stall owners were asked to contribute 190–240 million VND (eight thousand to eleven thousand US dollars). Having secured the finance, the LDIF and the People’s Committee prepared a public tender for the project in 2016. Although information regarding the project and bidding conditions was publicly disclosed, only one bidder—the LDIF—participated. As an official in the Provincial Housing and Land Department later commented, “it is general knowledge that many investors were interested. In fact, the [actual] investor was hiding in the haystack. If you have friends [in government], you can reach an agreement.” The People’s Committee awarded the LDIF a BOO license without the competitive tendering required under article 13 of the 2005 Law on Anti-Corruption.

The LDIF acted like a broker by combining persuasion and coercion to align the stall owners with the interests of the provincial government and the “underground forces” (lực lượng ngầm) who stood behind the project. Discussing the relationship between the government and underground forces, a city official observed: “Most of them [underground forces] are children of big men (con ông to) or relatives of leaders (người lãnh đạo)” (Endres Reference Endres, Kirsten and Leshkowich2018, 34). Interviews with LDIF members confirmed that the underground forces participated during all stages of the market redevelopment, beginning with the planning and tendering processes. They determined who should receive stalls in the new market and used extralegal forces to deter stall owners who complained about the development process. Explaining this mode of operation, a LDIF member recalled: “Governments cannot abuse their power in dealing with stall owners, but the ‘underground forces’ have few constraints.”

To steer the development through the planning and development procedures, the People’s Committee employed a regulatory technique called làm luật (literally, making law) (Endres Reference Endres2014). Interviewees used this term to describe the opaque regulatory practices that rewrote or circumvented the laws and processes that might otherwise have slowed or prevented the development. Officials exercising làm luật used a complex repertoire of bureaucratic processes and documentary practices to give corrupt practices a sheen of formality and legitimacy. In some instances, the People’s Committee used làm luật to approve new regulations and change planning schemes to legalize the transfer of the publicly owned market into private hands. In other situations, the People’s Committee shifted decision-making powers to the LDIF. As an extra bureaucracy, the LDIF operated in an exceptional legal space outside the formal state structures and statutory procedures that constrained state officials. Working together, the People’s Committee and the LDIF exercised a type of variegated legal sovereignty in which exceptions to the land and planning laws that conveyed special economic opportunities to the PPP were unavailable to the general public. State officials used làm luật to disguise their abuse of power for personal gain with a veneer of legality.

Narratives of the Stall Owners: Identifying the Public Interest

Stall owners in the market were the stakeholders most directly affected by the PPP. They advanced three types of public interest objections to the PPP. The first objection concerned the redevelopment goals. Stall owners argued that, unlike most public markets in Vietnam, the design for the new market created sixty-six stalls with street frontage. This arrangement allowed the LDIF to charge a premium for stalls fronting the street, while compromising the commercial viability of stalls located inside the market. As a senior female stall owner quipped, “buyers will buy stuff right there in the street-front market stalls. Those of us trading inside may just be sitting and staring at each other with no customers.” The stall owners also believed the LDIF was exploiting its monopoly by imposing unrealistically high rents for the new market. An elderly male stall owner explained: “Doing business will be harder. With such high rent, how are we to survive?”

Although stall owners were concerned about profits, their main complaint involved the disruption of traditional business practices. They thought the new market design, which resembled a shopping mall, undermined the relational business practices that intertwine personal relationships and commerce. A stall owner described this tension: “There is a conflict between the modern market and targeted customers. In the original market traders worked in open spaces and could cooperate in selling goods. That was both our work and our life. The closed stalls in the new market separate the traders, and break-down our business practices that rely on discussions and tình cảm (empathy or sentiment) between traders and customers.” The stall owners were concerned that, by enclosing the market stalls into individual shops, the new market would inhibit conversations and emotional interactions that connected commerce to personal relationships (MacNeil Reference MacNeil2000; Granovetter Reference Granovetter, Nee and Swedberg2007).

The second public interest objection concerned the lack of public participation in planning the new market. An elderly male stall owner recalled: “Nobody has asked us, they just proceed with their plan. They will hold meetings and announce their decisions by loudspeaker, that is how we will learn the news” (Endres Reference Endres, Kirsten and Leshkowich2018, 31). A senior official from Phố Mới Ward outlined the problems caused by this lack of consultation: “The problem with making a design that recognizes the needs of the people, but also fits modern trends is very difficult. Without consultation the business will serve the needs of a few individuals, this means that the land is privatized and becomes a form of personal property. The land then becomes half state, and half private.” Feelings of exclusion from the decision-making process fostered a perception among stall owners that the approval processes were unethical. This third public interest objection to the PPP surfaced in narratives concerning anomalies in allocating stalls in the new market. Plans approved by the People’s Committee only permitted stall owners in the original market to gain access to stalls in the new market. Stall owners claimed that the LDIF members had abused their official powers by selling “ghost spaces” (không gian ma) to anyone who wanted a stall in the new market (Endres Reference Endres, Kirsten and Leshkowich2018). Expressing this belief, a female stall owner sardonically speculated: “Poles became traders, fire hydrants also became traders and were named as business owners.”

Stall owners staged a protest to demand more input into the design of the new market and press the People’s Committee to investigate the officials who abused their powers by selling “ghost spaces.” In response, the LDIF increased the rent-reduction period from ten to twelve years but refused to change the market design. Although the People’s Committee reassigned some LDIF members to new positions in the government, no criminal charges for abuse of power under the 2005 Law on Anti-Corruption were laid over the sale of “ghost spaces.” Further reinforcing the perception that the PPP acted against the public interest and was not genuinely interested in improving public infrastructure, the LDIF converted its legal status from a company to a cooperative. While this change did not affect the market development, it enabled the LDIF to claim a land tax waiver of thirty-two billion VND (approximately 1.4 million US dollars).

This case study is instructive in showing how local government officials, together with private investors, used làm luật to camouflage abuses of power as lawful procedures. Rather than framing their objections as transgressions under the 2005 Law on Anti-Corruption, the stall owners opposed the PPP because it did not reflect public welfare and violated community standards of ethical behavior.

Background

The PPP in this case study operated a quarry in Điện Biên, a poor mountainous province in northwestern Vietnam. To encourage sand and gravel quarries to supply the construction industry, a local government authority joined with a privately owned mining company to establish a loosely configured PPP (Nhân Dân Reference Nhân2017; Hà Thuận Reference Thuận2018). Local authorities used làm luật to “smooth” (thấy êm) the regulatory path for the company, bending licensing requirements and creating new processes to fast-track mining and environmental approvals.

Before quarrying could commence, the local government guided the company through the complex mining license application process. A senior manager in the mining company explained the procedure: “There are fourteen state agencies involved, including seven steps, ten submissions, passing through forty different hands over three years. It is complex and long enough to knock out the small investors.” An official from the Provincial Department of Natural Resources and Environment added: “Businesses are lost in the labyrinth of legal documents. Many investors stop applying for the mineral exploitation license in the middle of the process.” Several interviewees believed the mining company used “informal payments” (thanh toán không hợp thức), a euphemism for bribes, to induce the local government to fast-track the license approvals and prevent rivals without political connections from entering the quarrying business. An official from the Provincial Department of Construction discussed how approval procedures were used to exclude rivals: “If the tender winner is not the favored one in the first place they are closely controlled to death. For example, we might require the gravel to be round so you [the tender] cannot produce different-shaped stones for construction.” Despite many applications, only two companies in Điện Biên Province were licensed to quarry gravel in 2018 (Hà Thuận Reference Thuận2018).

In addition to subverting the license-approval process, the mining company worked with a consultancy firm connected with the local government to weaken the environmental standards governing the quarry. Under Law no. 55/2014/QH13 on Environmental Protection, mining companies must complete EIAs before commencing operations (Ortman Reference Ortman2017).Footnote ¹² In theory, EIAs impose standards that constrain harmful emissions; however, in practice, regulatory authorities in Vietnam often lack the political will and technical skills to establish effective standards and rigorously monitor emissions (Phuong, Thủy, and Dũng Reference Phuong, Thủy and Dũng2013). It is common practice for local government agencies to outsource the management of EIAs to private environmental consultancy agencies (Ortman Reference Ortman2017). Outsourcing has produced a vibrant consultancy industry that blurs the boundaries between state and private responsibilities. Simon Benedikter and Loan Nguyen (Reference Benedikter and Loan2018, 31–32) describe this industry in the following terms: “Behind these putatively external, private consultants we encounter the usual suspects of incumbent and former government officials and their social networks that take advantage of the outsourcing of state functions.”

In this case study, local government officials instructed the mining company to use an environmental consultancy firm with close government connections. A manager from the mining company discussed the process: “The mineral prospecting report was prepared by a firm recommended to us. It was a back-door for government officials.” He went on to say: “The environmental impact evaluation report was prepared by a firm owned by a son of the director of the provincial DONRE. It is selling bao đậu (guaranteed approvals).” The consultancy firm prepared an EIA and development plan for the quarry that, on paper, complied with the national environmental standards. Once the quarry began operating, the interviewees believed the consultancy underreported waste discharge into waterways, dust emissions, and damage to roads caused by overladen trucks carrying gravel (see also Hà Thuận Reference Thuận2018; Mỹ Bình Reference Bình2019).

The consultancy firm also worked with the local government to minimize the royalties paid by the mining company. Decree no. 203/2013/NĐ-CP Regulating the Method of Calculating Fees for Mineral Mining Rights establishes a schedule of royalties based on the estimated mineral reserves and quantities extracted from quarries.Footnote ¹³ According to the interviewees, the consultancy firm used several tactics to reduce the tax. For instance, they understated the mineral reserves. The mining company was initially licensed to quarry thirty-four hectares containing reserves of twenty-four million cubic meters of rock. When royalties for mineral exploitation were increased in 2015, the consultancy advised the miner to return twenty-two hectares of the reserve to the local government to reduce the tax. With the tacit approval of the local government, the miner continued to quarry the entire reserve. As a provincial official recalled, the miner was told: “You should not apply for a mineral exploitation license! Such a small mine. Just act as an unlicensed miner.” A mine manager maintained that informal payments were made to local government officials: “Calculating payments for the right to exploit minerals involves substantial negotiation. Businesses must bargain with all parties to agree to an appropriate payment.” He concluded: “There is nothing for free. Unofficial payments of five to seven million Đồng were made to staff, leaders of the divisions receive from thirty to fifty million Đồng, and people signing decisions receive from two-hundred to three-hundred million Đồng.”

What emerges from this case study is a loosely structured PPP controlled by the local government, the mining company, and the environmental consultancy firm. Officials practiced a type of entrepreneurialism by constantly searching for ways to leverage relationships and create business opportunities. They developed networks to cultivate political and business circles and formed associations that might yield personal benefits for relatives and business associates. Their self-interested calculations were filtered through and legitimized by regulatory processes such as làm luật that operated beyond the reach of the law-based systems of accountability. The PPP ignored complaints by local stakeholders that the quarry was harming their property and health.

Narratives of the Stakeholders: Identifying the Public Interest

Two groups of stakeholders in the Điện Biên study were directly affected by water and air pollution generated by the PPP. Farmers living downstream from the quarry lost productive farmland, and the health of villagers living near the quarry was compromised by dust emissions. During the interviews, the stakeholders expressed three distinct public interest objections to the PPP. The first objection concerned the goals of the PPP. Farmers opposed the prioritization of short-term economic development over environmental protection and sustainable economic development. In a representative account, farmers downstream from the quarry claimed: “Mining activities are gradually changing the flow of the Nam Rom River, during the rainy season there is increased potential for flash floods to affect houses and crops belonging to households living on both sides of the River” (Mỹ Bình Reference Bình2019). Farmers also argued that “[t]he owners of this business [the PPP] work openly, they can earn high profits, but cause land subsidence, and roads are damaged. Nobody banned them. People only see the immediate benefit, but where can we get our children to live and find productive land?” (TN&MT Reference TN&MT2017). The farmers complained that runoff from the quarry was destroying the farmland that bordered waterways and disrupting the agricultural economy. For example, they claimed that “areas of crops have been eroded by the riverbed, and the water has changed to a muddy color, killing fish” (Mỹ Bình Reference Bình2019; see also Xuân Tư et al. Reference Tư, Tiến and Anh2018).

Villagers living near the quarry were more concerned about harm to the natural environment and personal health than economic loss. As one villager recalled, “[t]he mountain side was shaved to the ground to remove the outer layer of skin … the area is now deserted, stripped of trees, deforming the shape of the ancient mountain, which was once very beautiful” (Mỹ Bình Reference Bình2019). Another villager scornfully observed: “The biggest benefit of this project is environmental destruction.” Most villagers complained about the health risks created by dust from the quarry. One villager mockingly observed: “Our citizens here are very healthy because dust gets into our lungs to make them concrete cover. Now we can drink and smoke freely without harm anymore.” Encapsulating the concern that the PPP privileged development over community health, another villager said: “We recognize that quarrying is important for local development, but why do we nearby residents have to suffer?”

The second type of public interest objection concerned the regulatory processes governing the quarry. Stakeholders believed that the mining company bribed local government officials to bend the rules (làm luật) to ensure the quarry received official approval. Information regarding bribery came to the stakeholders through word of mouth from different sources. As a villager explained, “the officials would never disclose such information because they did not want to “take off their shirt to show others their back” (vạch áo cho người xem lưng).” In contrast to the opaqueness surrounding bribery, abuses of public power were more evident. For example, when the miner applied for a mineral exploitation license, local officials ensured that the correct procedures were followed, and details of the bid conditions were publicly disclosed. This outward adherence to formal processes masked the careful adjustment of bidding procedures to favor the miner. As the mine manager explained, “there is no regulatory problem at all. Public officials can adjust mineral exploitation plans. The real issue is how you behave with public officials.” Further, villagers criticized the lack of public participation in the approval processes. For example, one villager said: “We citizens here complained a lot. But then who would hear us out? The young officials now are trained to be cold-blooded. They don’t care about what citizens say, just about their jobs.” Referring to attempts to negotiate with the PPP, a villager recalled: “They [the miner] just wanted to seal our mouths with token money rather than basing it on any discussion about actual environmental damages.” Stakeholders considered the mining approval processes unfair because they lacked transparency and prevented public participation.

In the third public interest objection, the stakeholders argued that the local government and miner violated community standards of ethical behavior. Rather than focusing on the deviations from laws and procedures, the stakeholders objected to the impact on their familial and social relationships. Land in rural Vietnam is embedded in family lineages and community networks (Malarney Reference Malarney1997). Property rights are treated as social relationships that flow from the membership of close-knit communities (Gillespie Reference Gillespie2017; Sikor et al. Reference Sikor, Dorondel, Stahl and Xuan To2017). The quarry violated community-based ethical standards by disrupting the social and ethical ties that bound the local communities together. Reflecting these concerns, a male farmer observed: “We have lost ‘materially’ and ‘spiritually.’ The loss of farmland made my wife ill. While I’m angry and will fight to stop harm to our land and familial relationships (chung gia đìn).” The stakeholders in this case came to regard the quarry operation as corrupt when they were no longer willing to accept the violations of community standards that resulted in financial, environmental, and physical harm.

Comparing Behavior in PPPs with Public Interest Standards

Public Interest Objectives

The stakeholders in both case studies opposed the modernizing objectives of the PPPs. The stall owners in the Lào Cai case study rejected the modern shopping mall that was designed to bring “urban civilization” (văn minh dô thi) to a remote provincial city. They prioritized relational forms of business transactions that privileged personal/familial connections over the impersonal, arms-length commerce encouraged by the PPP (MacNeil Reference MacNeil2000) (see Table 1). Also opposing modernization, the stakeholders in the Điện Biên case study objected to quarrying that advanced economic development at the expense of community ties, personal health, and the environment (see Table 2). Underlying these conflicts were different standards regarding the appropriate balance between national development and personal and collective rights. The officials described themselves as modernizers—a mindset encouraged by party state ideology (Benedikter and Nguyen Reference Benedikter and Loan2018). Modernization ideology developed under the socialist command economy (1954–86) to legitimize the subordination of private and community interests to national development (Gillespie Reference Gillespie2017; Le Hong Hiep 2019). Although the state incrementally recognized private and community interests following renewal reforms (đổi mới) in the late 1980s (Gillespie Reference Gillespie2017; Fu et al. Reference Fu, Gillespie, Nicholson and Partlett2018), modernization through industrial development remains the paramount state objective (Le Hong Hiep 2012; Lebbe and Musil Reference Lebbe and Clement2013).

TABLE 1.

Lào Cai Study

TABLE 2.

Điện Biên Study

The belief by the stakeholders that the officials should have taken public objectives into account reflects the growing public expectation that governments are accountable to performance legitimacy (Le Hong Hiep 2012; Nguyen Reference Nguyen2016). The stakeholders argued for a rebalancing between government development objectives and community-based standards, such as relational transactions in the Lào Cai case and “property rights as social relations” in the Điện Biên case (Singer Reference Singer, Geisler and Daneker2000, 4). Their socially embedded standards were influenced by local customs and identities grounded in strong emotional and collective (cognitive) attachments to land and place (Nuijten and Anders Reference Nuijten and Anders2007; Sikor et al. Reference Sikor, Dorondel, Stahl and Xuan To2017). The preference by the government for economic development violated community standards of well-being.

Identifying Public Interest Corruption

Public interest corruption occurs where PPPs operate in fundamental opposition to publicly determined standards (Wedel Reference Wedel2012; Zaloznaya Reference Zaloznaya2014; J. Johnston Reference Johnston2016). Normative, and especially cognitive, conflicts between PPPs and public standards signify the irreconcilable and fundamental disagreements that constitute acts of public interest corruption (Hiller Reference Hiller, de Graaf, von Maravic and Wagenaar2010). The officials and stakeholders fundamentally disagreed about the appropriate normative processes that should govern PPPs. The officials used làm luật, a type of secretive, relational regulation that blurred public and private boundaries. In contrast, the stakeholders advocated procedural transparency and public participation in official decision making. This normative objection did not arise from a legalistic concern with the abuse of rules-based structures but, rather, from the injustice of being excluded from decision-making networks.

The officials and stakeholders also clashed over the ideological settings that balanced state modernization with private and communal rights and environmental protection. Reconciling these competing cognitive assumptions is challenging because neither recognizes the other. Socialist modernization ideology regards moral and community rights as a cultural residue that progressive socialism should sweep aside (Gillespie Reference Gillespie2017; Fu et al. Reference Fu, Gillespie, Nicholson and Partlett2018). Further complicating reconciliation, the stakeholders lacked a conceptual grammar by which to engage with state ideology. Moral and community rights are reinforced by collective identities that insulate stakeholders from alternative patterns of thought (Nuijten and Anders Reference Nuijten and Anders2007) and entrench their perception that the PPPs are unethical and corrupt. Collective identities create boundary narratives that distinguish the honest and trustworthy insiders from the immoral and untrustworthy outsiders (Owens, Robinson, and Smith-Lovin Reference Owens, Robinson and Smith-Lovin2010). This social partitioning promotes reflexive thinking that prevents flexible adaptation and the negotiation of consensus about the appropriate standards for PPPs.

A related cognitive conflict concerns the trustworthiness of officials. The stakeholders formed the view that the officials were untrustworthy because they substituted private interests for public welfare. This perception was amplified by feelings of anger and betrayal (Dunn and Schweitzer Reference Dunn and Maurice2005; Levi, Sacks, and Tyler Reference Levi, Sacks and Tyler2009). Trust has an emotional dimension because it involves a “willingness to accept vulnerability based upon positive expectations about another’s behavior” (Dunn and Schweitzer Reference Dunn and Maurice2005, 736). The stakeholders in both case studies initially trusted the officials to act in the public interest. After witnessing the officials disregard public objections to the PPPs, the stakeholders felt betrayed and concluded that the officials were untrustworthy and corrupt.

Normative and, especially, cognitive disagreements point to irreconcilable differences and public interest corruption. Some normative and cognitive disagreements might have been resolved if the stakeholders were given a voice during the planning and development of the PPPs. Once the disputes progressed, anger and betrayal crystalized into the perception that the officials were untrustworthy and irredeemably corrupt (Dunn and Schweitzer Reference Dunn and Maurice2005).