The motivation for delegation of powers to independent court in Vietnam

In this section, I have argued that in transition to the rule of law in Vietnam, the delegation of powers to domestic independent courts is feasible. As mentioned already, the P – A theory shows that the degree to which rational legislators delegate their authority depends on how well the costs involved in the delegation of powers are outweighed by the benefits. The next section shows some benefits of the delegation of powers to independent judiciary system in Vietnam.

First, in the last decade, there were widespread criticisms of the judicial system of Vietnam by both the community of international investors and various interest groups (see e.g. Gillespie 1993; McKinley 2002; Nicholson 2002, 2003; Pham Duy Nghia 2002; and many Vietnamese newspapers⁴⁶). The survey made by the Pew Global Attitude (2003) shows that most of Vietnamese people highly appreciate a fair judiciary (80% respondents), but only half of the interviewees think that the Vietnamese government does well in this regard (2003, p. 64).

Because of criticisms, the CPV and Vietnamese government should carry out judicial reform in order to regain their prestige in society.

Second, inspired from P-A theory, I suppose that the delegation of powers to independent judiciary will increase credibility of the leadership and legislators in Vietnam. As mentioned in the previous chapter, while looking for a solution to the dilemma of the strong state, Weingast (1993) realizes that representatives of government have motives for promising not to infringe upon citizens’ property rights. In countries transforming from planned economy to open market economy like Vietnam, investors are still obsessive about government’s arbitrary infringement upon their property rights in the past. Additionally, the arbitrary political system can result in insecurity and unpredictability, or at least a much higher cost in the efforts to predict policies and their impact. For such reason, entrepreneurs feel that their business will be risky if they invest into countries having an arbitrary system. As a result, governments tend to keep their promise of not infringing arbitrarily citizens’ property rights.

Nevertheless, their promises will not be believable if lacking a mechanism constraining their activities. As pointed out by Weingast (1993), rational governments have an interest in establishing an institutional constraint mechanism that could help them to keep their promises credible. This mechanism makes promise breaking costly. In other words, if the expected utility from accomplishing is higher than from breaking their promise, representatives of government can be expected to stick to their promises. Judicial independence, thus, encourages citizens to trust in the relevance of the rule of law (Feld and Voigt 2003, p. 2).

Furthermore, judicial independence is regarded as a tool to prevent arbitrary action of government. Therefore, through the promotion of JI, the leadership of Vietnam proves that they are trying to restrain their arbitrary actions and promote the rule of law. Accordingly, their credibility is likely to be enhanced.

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In addition, as aforementioned, Landes and Posner (1975) argued that by delegating more powers to an independent judiciary, legislators could prolong the life span of legislative deals beyond their term. More specifically, an independent judiciary can enable legislators to do this by reducing the possibilities of post-contractual opportunism either by themselves or by their successors. Legislators, therefore, have a tendency to maintain judicial independence because their own rents will be higher. In Vietnam, the representatives of the NAV where the CPV members are dominant currently also expect that their legislation will have a lasting life even when the CPV gives up their dominance in the NAV. For instance, JI may prolong the life span of regulations on the sole leading role of the CPV and thus ensure the legitimacy of the party leadership in a certain extent. This explains why the leaders of Vietnam currently seem to opt for the delegation of powers to independent judiciary.

Third, JI could help government to persuade individuals to comply with their contracts as well as believe in the enforcement of the law (Feld and Voigt, 2002). This aspect plays a very important role on economic growth. Analysing the rule of law in China, Peerenboon (2000) argues that in many instances the leadership in China has no interest in the outcome of a particular case other than that it be fair. For example, whether Company A or Company B prevails in a commercial contract is not a matter of state concern. What matters from the central leadership's perspective is that the result be based on the law and reached through fair procedures rather than turning on personal connections with judges. Notably, if a government is incapable of protecting private property rights and enforcing contracts, individuals will opt for informal institutions to protect their property rights. It is the case of underground economy (see e.g.: de Soto 1989; Feige 1990; Voigt and Kiwit 1995). However, it will be costly for entrepreneurs to maintain their business under a pillar of informal institutions in the long run.

Entrepreneurs will thus invest less or simply shift their activities to the countries where the state has enough competence in protecting their assets. Without judicial independence, argue by Jarquín & Carrillo (1998, p. vii), there is no rule of law, and without rule of law the conditions are not in place for the efficient operation of an open economy, so as to ensure conditions of legal and political security and foreseeability. Judicial independence, therefore, is a very important factor in promoting economic growth. It would be difficult to deny that rational governments (democracy or dictatorship) are always interested in economic growth.

In the case of Vietnam or China, the reforms towards completion of legal institutions (e.g., delegating more authorities to independent judiciary) that advance the Party's development goals without endangering its survival seem easily to be accepted.

Fourth and finally, the leadership of Vietnam enhances judicial independence in order to ensure stability, and constrain the abuse of power and wayward local governments. As indicated earlier, the P – A theory pays attention to how principals may design certain types of procedure to control an agent. The theory suggests that principals should create laws and institutions that can monitor agents and sanction the abuse of power. The check and balance mechanism applied in many western countries plays a significant role in preventing the risk of abuse of power in the legislative, executive or judicial branches of government. However, this mechanism is not applied in Vietnam due to the centralization of powers. In principle, the NAV exercises supreme supervision over all activities of other state bodies, including the president, government, supreme people’s court and procuracy. Yet, the NAV is incapable of supervising all other state bodies, especially local governments. Therefore, the NAV should delegate authority to an independent agent to constrain arbitrariness of local governments. In 1996, the administrative courts were established to deal with the abuse of powers in administrative bodies. However, no state body has authority to supervise the activities of the NAV. Due to the lack of judicial review of the constitutionality of legislation, many authors have suggested that the transition to the rule of law in Vietnam calls for establishment of a constitutional review mechanism (Nguyen Dang Dung 2001, Pham Duy Nghia 2004, Le Minh Thong 2006). This mechanism can be implemented by a constitutional court belonging to the supreme people’s court or by a constitutional committee belonging to the National assembly.

The leading constitutional experts should be nominated to these organs.

In short, the P – A approach on judicial independence shows that on the one hand, JI may benefit citizens because it prevents politicians from reneging on the promise of not infringing citizen rights. On the other hand, politicians also have a great deal of benefits from delegating their authority to independent courts, especially increase in credibility. The analysis of motivations of the Vietnamese politicians in making JI tends to support the P – A approach.