Determinants of Vietnam’s multidimensional poverty: Economic structural change, human capital, government’s quality and risk management, foreign capital

Abstract

This study examines the intersecting determinants of Vietnam’s multidimensional poverty from 2016 to 2023. The authors use the Pooled Ordinary Least Squares, Fixed Effects Model, Random Effects Model, and Feasible Generalized Least Squares in 03 samples: 63 provinces/cities (sample 1), 24 Key Economic Zone provinces/cities (sample 2), and 39 non-Key Economic Zone provinces (sample 3). The results show that: industrialization, labor quality, healthcare access, local government quality, and Foreign Direct Investment (FDI) reduce multidimensional poverty in all samples. Conversely, the infant mortality rate increases poverty in all samples, while foreign aid increases it only in sample 1. Urbanization alleviates multidimensional poverty in samples 1 and 3; and better local government quality during the Covid-19 pandemic lowers multidimensional poverty in samples 1 and 2. Based on these results, the authors suggest promoting sustainable urbanization and industrialization, developing human capital, attracting FDI, and improving local government’s quality and risk management to reduce multidimensional poverty.