Vietnam’s adoption of a two-tier local government system (province–commune) represents a decisive break from the inherited three-tier administrative architecture. Together with the restructuring into 34 provincial-level units, the reform marks a structural reset of territorial governance designed to address long-standing problems of fragmentation, duplication, slow decision-making, and blurred accountability.
However, as demonstrated throughout this report, the two-tier model is not self-executing. Structural simplification creates opportunities, but governance outcomes depend on how effectively Vietnam manages authority distribution, coordination mechanisms, capacity constraints, digital systems, and transition risks.
The process of organizing local government after the merger of provinces/cities in Vietnam is a strategic and comprehensive administrative reform, firmly institutionalized through Resolution 202/2025/QH15 and the Law on Organization of Local Government 2025 (Law No. 65/2025/QH15). The two-level government model (province – commune) with the abolition of the district/county level is expected to streamline the apparatus, reduce intermediate levels, shorten the administrative processing cycle and strengthen decentralization and delegation of power to the commune level, thereby improving the effectiveness and efficiency of state management and the quality of public services.
These changes also entailed a profound restructuring of the judicial system (moving to a regional-level Court/Procuracy model), tax administration (centralized at the provincial level, with commune-level bases), and investment attraction policies (creating new development space). The merged provinces/cities have shown great potential in attracting FDI, demonstrating the vision of adjusting the economic space.
However, this process also poses significant challenges. The capacity of communes needs to be enhanced to shoulder a larger workload, while a strict monitoring mechanism is needed to avoid abuse of power. Effectively handling redundant public headquarters and assets is necessary to avoid waste and social resentment. The biggest challenge lies in balancing and allocating the budget fairly and reasonably among merged units, especially when there is a large difference in revenue sources. On the social side, resolving policies for redundant civil servants and public employees and preserving local cultural identity in the context of changing administrative boundaries are issues that need to be deeply concerned to ensure stability and consensus in the community.
This final chapter draws three overarching conclusions and sets out a strategic roadmap for governing the two-tier system from 2025–2030, consistent with Vietnam’s legal–policy framework and reform trajectory.
What the Two-Tier Reform Has Achieved and What It Has Not (Yet)
Structural Clarity Has Improved, but Operational Complexity Has Increased
The elimination of district-level government has materially improved structural clarity:
- authority chains are shorter,
- responsibility is easier to assign,
- policy distortion points have been reduced.
At the same time, operational complexity has increased at both remaining tiers:
- provinces must coordinate at larger territorial scale and supervise many more communes directly,
- communes have absorbed a significant volume of administrative and service-delivery functions.
This trade-off is inherent to the reform design and confirms that the two-tier system is structurally simpler but operationally more demanding.
Provinces Are the Decisive “Load-Bearing” Level of the New System
Across all analytical pillars, one conclusion is consistent:
the success or failure of the two-tier system hinges on provincial governance capacity.
Provinces now function as:
- regional planning and coordination hubs,
- gatekeepers of land, infrastructure, and public investment decisions,
- direct supervisors of commune-level administration,
- primary interlocutors with consolidated central ministries.
If provinces govern through delegation, systems, and performance management, the reform can deliver speed and coherence.
If provinces govern through centralization, ad hoc control, or excessive escalation, the system risks recreating bottlenecks at a higher level.
Digital Governance Is No Longer Optional it Is Structural Infrastructure
The two-tier system implicitly assumes that:
- digital workflows,
- standardized administrative codes,
- interoperable databases,
- and performance dashboards
will replace the coordination functions previously carried by districts.
Without robust digital governance, provinces will be forced to compensate with informal layers, manual reporting, and discretionary intervention undermining the reform’s intent.
In this sense, digital government is not an auxiliary reform; it is the operating system of two-tier governance.
Strategic Risks Going Forward: What Could Undermine the Reform
Looking toward 2030, five strategic risks stand out if not actively managed:
- Provincial overload and hidden recentralization
Provinces absorbing too many decisions may unintentionally recreate district-like bottlenecks. - Uneven commune capacity and service quality divergence
Capacity gaps between communes could erode equity and citizen trust. - Procedural uncertainty and legal lag
If regulations and SOPs are not updated in sync, “authority ambiguity” will persist. - Risk aversion and decision paralysis
Excessive inspection pressure without process protection can slow decision-making. - Digital fragmentation
Partial or uneven digital adoption will prevent scaling and monitoring.
These risks are not failures of design; they are predictable stress points of large-scale institutional change.
Strategic Recommendations: Governing the Two-Tier System Effectively (2025–2030)
Recommendation 1: Institutionalize the Province as a “Delegating Governor,” Not a Super-District
Provincial governments should explicitly adopt a governance doctrine of “strategic steering with disciplined delegation.”
Key actions:
- Publish province-wide delegation catalogs aligned with sectoral delineation decrees.
- Define clear escalation thresholds (value, risk, cross-commune impact).
- Measure provincial performance not by approvals signed, but by service outcomes and backlog reduction.
This approach prevents upward congestion and reinforces the province’s role as a system integrator rather than a transactional controller.
Recommendation 2: Treat Commune Capacity as a National Investment Priority
Communes are now the frontline state. Without sufficient capacity, the reform’s legitimacy will erode.
Key actions:
- Develop standard competency frameworks for commune officials handling transferred procedures.
- Implement targeted training tied to procedure clusters, not generic courses.
- Use mentorship and rotation from provincial departments to high-load communes.
- Track commune-level service KPIs (time, error rate, citizen satisfaction).
Capacity investment should be differentiated, not uniform focusing on communes under the greatest operational strain.
Recommendation 3: Lock in Legal and Procedural Certainty through Continuous Regulatory Alignment
Structural reform must be matched by regulatory hygiene.
Key actions:
- Systematically remove references to districts from laws, decrees, circulars, and SOPs.
- Maintain a living authority map accessible to officials and the public.
- Ensure all administrative procedures are routed through one-stop or interlinked one-stop mechanisms with published time limits.
Legal certainty is the most effective antidote to risk aversion and procedural delay.
Recommendation 4: Shift Oversight from “Control by Inspection” to “Control by Systems”
Inspection, audit, and discipline remain essential but must evolve.
Key actions:
- Apply risk-based inspection, prioritizing high-impact domains.
- Reduce duplicative inspections that incentivize upward escalation.
- Protect lawful, good-faith decision-making when officials comply with SOPs and digital workflows.
Oversight should enable performance, not freeze it.
Recommendation 5: Complete the Digital Backbone of Two-Tier Governance
Digital governance should be treated as foundational infrastructure, not a modernization project.
Key actions:
- Enforce mandatory use of standardized administrative unit codes across all systems.
- Expand electronic procedure handling and digitization of results.
- Integrate cross-sector databases at provincial level (planning, land, civil status, services).
- Deploy real-time dashboards for leadership monitoring of delays, variance, and risk flags.
Digital systems are the only scalable substitute for the removed district layer.
A Phased Roadmap for 2025–2030
Phase 1 (2025–2026): Stabilization
- Authority catalogs and SOP updates completed.
- One-stop mechanisms standardized.
- Administrative codes fully adopted.
- Immediate capacity reinforcement at communes.
Phase 2 (2026–2028): Optimization
- Delegation expanded based on performance.
- Digital workflows integrated across sectors.
- Risk-based inspection models refined.
- Performance benchmarking institutionalized.
Phase 3 (2028–2030): Maturation
- Data-driven governance and predictive analytics.
- Strong inter-commune coordination under provincial leadership.
- Consistent service quality across territories.
- Institutional learning embedded into governance practice.
Final Assessment: A Structural Reform with Strategic Implications
Vietnam’s two-tier province–commune model is best understood not as a cost-cutting exercise, but as a strategic redesign of the state’s operating logic.
If governed well, it can deliver:
- faster decisions,
- clearer accountability,
- more coherent territorial development,
- and more citizen-focused services.
If governed poorly, it risks:
- shifting bottlenecks upward,
- amplifying capacity disparities,
- and weakening public confidence.
The reform’s ultimate success will therefore be determined not by the removal of districts, but by Vietnam’s ability to govern without them through law, systems, capacity, and disciplined leadership.
In this sense, the two-tier system is both a test of state capacity and an opportunity to modernize governance for the next stage of Vietnam’s development.
Read more: Removing the District Tier: The Administrative Philosophy Behind Vietnam’s Governance Reform
