Did Program Support for the Poorest Areas Work ? Evidence from Rural Viet Nam

This paper investigates the impact of a large-scale poverty alleviation program targeted at the 62 poorest districts in Viet Nam. The analysis of multiple data sets spanning the past 20 years uses a regression discontinuity design with district fixed effects. The findings do not reveal significant program effects on household welfare (as measured by per capita income and poverty) or local economic development (as measured by nighttime light intensity and establishment of new firms). However, the findings show that the program facilitates a shift from farm to nonfarm employment and significantly increases the share of nonfarm income for rural households. A possible explanation for the positive effects on nonfarm employment is the improved access to credit that the program provides to participating households. The findings also show that the program increases household access to electricity, public transfers, educational subsidies for students residing in the program districts, and health care utilization, possibly through improving the availability of commune health care centers.