Hoàn thiện phân cấp quản lý đầu tư xây dựng cơ bản sử dụng nguồn vốn ngân sách của thành phố Hà Nội đến năm 202 (3)

INTRODUCTION

implementation of these measures.
3. Object and scope of research
3.1. Research subjects

1. Urgency of the topic
Innovation in decentralization of management in general, and in capital construction investment

The thesis focuses on the study of decentralized management of capital construction investment

(capital construction) in particular, is a major policy of the Party and State. Fiscal decentralization in general

budget funded by city of Hanoi. Therefore, the object of study is the situation of decentralized management

and decentralized management of capital construction investment in particular in order to improve the

of capital construction investment of Hanoi for the districts, wards and communes in the city. With the

efficiency of capital investment budget not only help generate relatively independent financial resources for

expansion of Hanoi since 2007, Hanoi now has 30 districts and towns in the city.

each level of government to actively fulfill their functions and duties, but also serve as incentive for the local

3.2. Research scope

government and population actively exploit its full potential for development. Practical experience in

The thesis focuses on the contents of the decentralized management of capital construction

management decentralization in many countries and Vietnam showed that decentralization of management

investment using state budget in the area of Hanoi. Specifically, the decentralized research investment in

between central and local budgets, between the city and county, district, town, in a certain extent helped

capital construction budget funded within Hanoi; Data of the study will be collected, aggregated by the

promote strong dynamism, creativity, autonomy and self-responsibility of governments at all levels in the

author in 8 years (from 2007 to the end of 2014) to synthesize, evaluate, compare and analyze.

local budget management.

3.3. Research period

Like capital cities of developing countries in the world, improving efficiency of capital construction

To assess the status of decentralized management of capital construction investment budget centrally

investment in Hanoi in situation of state budget limitation is a huge challenge to be addressed. In recent

funded by Hanoi city, the thesis analyzes the situation deeply decentralized management of capital

years, the city of Hanoi has achieved certain results in decentralization, especially promoting the initiative

construction investment period after Hanoi expansion in 2007 (merger of Hanoi city and Ha Tay province)

and creativity of the government at all levels. However, the process of innovation in decentralization of

until the end of 2014. On that basis, find out the limitations, causes and propose comprehensive solution for

capital construction investment overall has yet to meet the urgent demands of life and it reveals many

decentralized management of capital construction investment funded by Hanoi city until 2020.

shortcomings.

4. Research methodology

In the process of development of market economy, the socio - economic activities are increasingly

In scientific research, especially in the economic sector, approaches can be divided into two general

diverse and complex. Central government is not in position to manage all operations in a centralized way in a

categories: quantitative research and qualitative research. To get an overall, objective view in all aspects, in

rigid format, and problems that arise in each local government. The general trend in other countries is to

the process of research, the author has used the following approach: integrated analysis method of secondary

increase decentralization to local authorities in government administration as well as in finance and

materials, investigation method, statistics method, quantitative research method, comparative method,

investment from the state budget.

historical method, expert method and forecasting method. In addition, the thesis also uses research results

As for the problem mentioned above, it is required that a systematic study of decentralized
management of capital construction investment should be in place, in order to overcome the inadequacies

published domestically and abroad related to the topic, thesis.
5. Structure of the thesis

and limitations in the management and administration of the economy. Therefore, the choice of dissertation

Besides the introduction, conclusion and appendices, the thesis consists of 4 chapters:

topic: "Improvement of decentralized management of capital construction investment with state budget of

Chapter 1: Overview of the situation of research and research methods

Hanoi capital city up to 2020" is urgent, which has practical value for Hanoi and the country. The thesis
studies the theory of decentralized management of capital construction investment using state budget;
assesses the status of decentralized management of capital construction investment budget funded by Hanoi
city period 2007-2014, from there, find the gaps and causes to propose perspectives and solutions to
complete the work of decentralized investment in capital construction in the city of Hanoi up to 2020.

Chapter 2: Rationale and practice of decentralized management of capital construction investment
using state budget.
Chapter 3: Status of decentralized management of capital construction investment budget funded by
the city of Hanoi.
Chapter 4: Proposed solutions of decentralized management of capital construction investment
budget funded by Hanoi city up to 2020.

2. Research Objectives
Systematize fundamental theory of decentralized management of capital construction investment
using the local state budget.

6. New contributions of the thesis
The thesis focuses on the research and provide commentary on the rationale on decentralized

Analyze and assess the status of decentralized management of capital construction investment in

management of capital construction investment using State budget, namely:

Hanoi to date. Analyze and show clearly the advantages and shortcomings, the causes in this work through

- The thesis has shown the content of decentralized management of capital construction investment

the use of econometric models and the test with SPSS statistical software, from which point out the issues to

in local budget, including: Decentralization in planning; Decentralization in planning capital construction

be studied in decentralized management of capital construction investment using the city budget.

investment; Decentralization in the work distribution and assignment of capital construction investment

Propose systematic set of solutions for decentralization of capital construction investment
management using Hanoi city budget in the new period and the conditions for ensuring effective
1

plans; Decentralization of investment preparation, approval, evaluation and project investment decisions;
Decentralization in the settlement, monitoring, inspection, monitoring investment projects.
2


- The thesis has provided the commentary on the factors affecting the work of decentralized

in Vietnam and other countries in the world, but the goals of the research are different, some are only limited

management of capital construction investment, including the impact of legal documents to the decentralized

to aspects of total decentralization of particular sector (planning, plans, joint investment, organizational

management of capital construction investment and the impact of the defined hierarchical state budget as

structure ...), others studied budget decentralization or decentralized state management in public investment

well as organizations operating mechanism of the apparatus of the State to manage the decentralization

in Vietnam... Although decentralization and decentralization of state management of investment have been

process of the local budget for capital construction investment.

much studied by authors to different angles and ranges, but no work has referred to the complete

The new proposals drawn from the research findings:

decentralization of investment management capital construction using state budget in Hanoi, in view of the

Based on the research results of decentralized management of construction investment using State

entire synthesis process of decentralization of investment management (from decentralized investment in

budget, the thesis has proposed a framework for decentralized management of the State budget, as well as

capital construction plan to monitoring and evaluating implementation process and subsequent

legal mechanism, documents on investment decentralization, which

dominate investment decisions,

decentralization capital construction investment, during and post-project at 03 government authority levels:

expenditure estimates and budget allocation, which strongly impacts the work of decentralization of

city, district and town, ward and commune). Thus, this thesis is made to overcome the above-mentioned gaps

management of capital construction investment using State budget. Transparency of local government also

and provide complete system solutions for decentralized management of capital construction investment

has impact on the investment policy in the local region, affecting the work of decentralized management of

from the municipal budget by 2020 in order to improve people's quality of life as well such as socio-

capital construction investment. Especially in quantitative methods, the thesis shows an overview and details

economic development of the capital city of Hanoi.

of the effectiveness of the use of funds in capital construction investment decentralization of the district level

1.2. Research framework and research methods

and the city level in Hanoi.

1.2.1. Research framework:

The thesis proposes 07 groups of solutions as follows: (1) Improving the legal framework for

Based on the knowledge and professional experience, the author sets out the questions on

decentralized management of capital construction investment in the overall state budget decentralization; (2)

management, research and research framework. These questions will be tested, evaluated in the process of

Solution for decentralization in planning; (3) Decentralization in planning of capital construction investment

implementing the study as follows:

from Hanoi city budget; (4) Decentralization in the allocation and assignment of capital planning, capital

Management questions:

construction investment; (5) Decentralization of preparation, approval and evaluation of investment

- What is decentralized management of capital construction investment?

decisions of capital construction projects; (6) Decentralization in the settlement, monitoring of investment
projects and construction projects (7) Solutions for consolidation of the project management committees as

- How to make decentralized management of capital construction investment using state budget of
Hanoi city up to 2020 highly efficient?

well as training and retraining of staff for management of capital construction investment of the city.

Research question:

- Why decentralize? What to decentralization for?
- What are impacts of decentralization of management of capital construction investment on socio-

CHAPTER 1
OVERVIEW OF RESEARCH SITUATION AND METHODOLOGY

economic development in districts and towns of the city of Hanoi?
- Should the decentralization of management of capital construction investment be continued? Why?
Research Framework: Thesis has proposed a research framework including 04 chapters, each

1.1 Overview of the study
In recent years, there have been a number of domestic and foreign researches on decentralization of
state management (state management) in the field of investment and public investment in Vietnam.

chapter is divided into the contents mentioned on various aspects such as research methods, research content,
results and main objectives to be achieved.

However, so far no study has evaluated in a comprehensive manner and provided complete solutions for

- The method of data collection, synthesis and analysis of secondary data: collect, use the data of

decentralized management of capital construction investment from the budget of the city of Hanoi.

previous surveys or research projects that have been published in the media, choose and use results of the

Therefore, for readers to understand the work related to the thesis topic, the author has documented,

surveys related to the research topic.

compared and highlighted the important content of each work at home and abroad on decentralization: in the

- Method of survey:

developing countries, in Vietnam, public investment management and policy mechanisms in investment

Survey scale: Conducted mostly through direct staff engaged in management of decentralized capital

decentralization. At the same time, the author also provided in-depth analysis of research projects related to

construction investment of 30 districts and towns in the city of Hanoi. Total 400 questionnaires were issued,

the content of the thesis, which

collected 300 votes, accounting for 75%, including 50 invalid votes collected and removed prior to data

are studied in depth for decentralization: preparation of investment,

construction investment planning, infrastructure services, capital construction investment management, and
effectiveness of decentralization of investment.

entry.
Content of the survey form: Through detailed table of 20 questions from the allocation of project

In general, the work of decentralized management of capital construction investment using state

funds to all stages of the project implementation process, warranty, repair, settlement, and 27 questionnaires

budget in Vietnam is currently one of the array of important research areas the authorities are very

about the issues and problems, which decentralized management units for capital construction investment

concerned. Although some research starting point is to consider situation of decentralized state management

encountered. Author gives the assessment using Likert scale. After each question are the author questions,

3

4


why agree/disagree? reasons? causes? solutions? to the author with the synthesis, compared with the

based on the opposite view, arguing that each state authority must have its own budget, independent of the

assessment results through meta-analysis of secondary data and results obtained from quantitative research

unified state budget system.

method.

Model for evaluation of effectiveness of use through DEA envelope analysis: Model is founded by
three scientists, Charnel, Cooper, Rhodes in 1978 (called CCR). According to CCR models, to estimate the

START

TE (technical efficiency), a set of linear equations is established and resolved for each DMU (Decision
making unit). Specifically, to estimate TE for DMU, envelope analysis model sets data input with fixed scale
in order to create the equivalent form of the problem as follows:

Researching the Literature review and

Methodology

We have:
With conditions

Min θ, λθ
-yi + Yλ ≥ 0

(1)

θ xi – Xλ ≥ 0,

Creating the research content

λ≥ 0,
Whereas: θ = Value of effectiveness of DMU being assessed,

Designing the questionaire

Investigation in districts, towns, etc.

Collecting and analysing the data by Visual
Basic Macro tool in MS Excel 2013

Putting the data on the RSQ Form
questionaires in the database by the
designed tool

i = 1 to N (number of DMU),
Y = volume of products created by DMU number i,

X = input volume used by DMU number i,

λ = duality variables.
Here θ is a scalar and vector λ is an N x 1 level constants. This format includes less binding than the
form of particles (K + M will satisfy θ≤ 1, with a value of 1 only one point on the boundary and therefore an effective technical DMU.

Running the SPSS software and exporting
the report of actual statistics

However, in order to verify the above results, the author adds other models used by the three scientists
Banker, Cooper Charnes developed in 1984 (referred to as BCC). BCC model refers to a number of other
assumptions and building envelope analysis model assuming production efficiency changing of scale VRS

Checking the consonance between the
methodology and the actual result

(Variable Return to Scale). BCC model overcomes the drawbacks of model CCR in defining norms for
subjects, whose the manufacturing process is heavily influenced by the size of the study. BCC model is
oriented to assess the effectiveness of DMUo (o = 1, ..., n) by solving linear programming (envelope form) as
follows:

Conclusions and recommendations

(BCCo)
with conditions

θBxo - Xλ≥ 0
Y λ≥ y0

END

Where θB is a non-linear.

Source: Authors (2015)
1.2.2. Synthetic methods and statistical analysis
This method is used with Descriptive Statistics through SPSS software for statistical points, is

λ=1

(2)

λ≥0,

Figure 1.1: The process of collecting and processing survey data

Banker, Charnes and Cooper (1984) has announced the model (2) which sets production capacity of
PB defined by:
PB = {(x, y) | ≥ Xλ x, y ≤ Yλ, eλ = 1, λ≥ 0},

assessed by each content of each stage of decentralization of capital investment using state budget, such as

Here X = (x j) ∈ Rm xn and Y = (yj) ∈ Rs datasets xn is given, λ∈ Rn and f is the row vector with all

average points, lowest points (min), highest points (max). Statistical results help assess best and worst

elements equal to 1. The model differs BCC from CCR model added only in the condition that we write is

managed instances, as basis for solutions to strengthen decentralization of management of capital

eλ = 1, where e is a row vector with all elements equal 1 and λ is the column vector with all non-negative

construction investment using the local government budget.

element. Along with λj≥ 0 conditions, with all j, this condition imposes a convex condition for allowable
ways for the combination of observations for n DMU.

1.2.3. Building model for study
Budget management model: The first model is based on the view that the state budget is the only and

In addition, some methods are also useed by the author: expert method, comparative method,

unified source and unity, without acknowledging existence of the local independent; The second model is

historical method, forecasting method, scientific inheritance method, systematic approach and research
results and published at home and abroad related to the topic and thesis.

5

6


CHAPTER 2
RATIONALE AND PRACTICE OF DECENTRALZATION OF MANAGEMENT
OF CAPITAL CONSTRUTION INVESTMENT USING STATE BUDGET
2.1. Investment in capital construction using state budget
2.1.1. The concept of investment and infrastructure investment
Investment is the process of using coordinated resources within a defined period of time to achieve
results, or a set of objectives defined in certain of socio - economic conditions.
Capital construction investment in the national economy is part of the investment and development,

is the entire costs to achieve the purpose of investment, including costs for survey, design, construction,
procurement, installation of equipment, facilities and other expenses recorded in the total budget estimate.
2.1.2. The role of capital construction investment
Capital construction investment has impact on growth and economic development, creating material
and technical base of the economy, on the scientific and technological development of the country, economic
stability, creating jobs for people.
2.1.3. Source of funding for capital construction investment using state budget
Source of funding for capital construction investment is one that is used for project investment
activities, which include the cost of survey, design and construction, procurement and installation of
equipment, facilities and other costs included in the total budget estimate.
2.2. Essence of decentralization of capital construction investment using state budget
2.2.1. Essence of decentralization, authorization or deconcentration in economic decentralization
"Decentralization" in state management is a process, whereas superior state government allocates
part of their management duties, authorities to competent subordinates.
“Deconcentration” is a form of separation of powers and responsibilities for representative decision
units of central government in the region. This mode is the lowest form in the form of administrative
decentralization.
"Devolution" is the highest form of administrative decentralization. With this method, all the powers
of decision-making, funding and management of central government are assigned to independent subordinate
local government bodies.
"Delegation" is entrusting by superior state government to subordinate authorities for specific tasks
under its jurisdiction, but the responsible person is the delegating person (at a higher level), but not executing
person (at a lower level).
Decentralization

Administrative
decentralization

Deconcentration

Fiscal
decentralizatio

Delegation

Economic
decentralization

Devolution

2.2.2. The concept, objectives of decentralization of capital construction investment using state
budget
2.2.2.1. Concept: Decentralization of the management of capital construction investment using state
budget is the process where State government at higher levels assign part of management authorities to their
subordinates so as ensure centralized and unified direction, as well as encourage democracy and autonomy of
subordinates in carrying out management of capital construction investment using state budget.
2.2.2.2. Objective: To assess decentralization of management of capital construction investment in
accordance with decentralized management functions in each specific tasks such as planning, scheduling,
allocation, delivery planning and implementation of capital construction investment projects to improve the
efficiency of state management in the field of capital construction investment, thereby enhancing the
efficiency of capital investment, decentralized management of capital construction investment using state
budget.
2.2.3. Content of decentralization of management of capital construction investment using state
budget
Content of decentralization can be presented in 2 ways:
The first way is to assess the nature of economic decentralization in the administrative perspective,
fiscal, market or political hierarchy, namely: decentralization act is the transfer of responsibility for planning,
managing and allocating resources from higher to lower levels, whereas fiscal decentralization is the central
component of any decentralization measures; Market decentralization is a form of state transferring some
functions from the public sector to the private sector; Political decentralization is to create a favorable

environment for all people in the process of policy making.
The second way is to assess decentralization of management of capital construction investment
under the decentralized management functions by specific tasks such as planning, investment in capital
construction planning, allocation and assignment of capital construction investment plan, implementation of
investment projects and construction in the settlement, monitoring, inspection and supervision of capital
construction projects. In this thesis, the author mainly uses the second way because it suites the essence of
decentralization of management of capital construction investment.

Administrative
decentralization

Central level

Planning

Designing program

Budget
decentralization
(Fiscal
decentralization)

Local level
(Cities)

Market
decentralization
(Economic
decentralization)

District

Implementing

Political
decentralization

Town

Settlement, monitoring and
inspection

Allocating program

Figure 2.1: Forms of decentralization

Chart 2.2: Content and functions in decentralization of capital construction investment

Source: Thai et al (2007).

Source: Authors (2015)

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2.2.4. Criteria for the allocation of investment capital as decentralized management of capital

First, decentralization of state management in general and the decentralization of management of

capital construction investment in particular are a common trend nowadays.

construction investment using state budget
The most common criteria for division of investment management is to ensure the effective
management of the investment activities, shown in three basic elements as time, quality and cost; particularly
fast, timely and quality assurance at the request and with the lowest cost. Specifically:

Second, strict coherence between planning (in investment and development) and budgeting will
contribute to ensuring good implementation of the planned investment.
Third, the budget allocation between levels should be tied closely to the tasks of each level.
Fourth, transferring the role of infrastructure development to the private sector is, and has been

- Ensure the fastest decision.
- Ensure unity in the decision-making and responsibility for the work.
- Decision making units must be qualified with the most efficient in related activities within the

successfully applied in many countries.
Fifth, the role of social organizations, communities become increasingly important for the
management of capital construction investment.

framework of general rules and policies.
2.3. Factors affecting decentralization of management of capital construction investment at

Sixth, decentralization of investment should be coupled with the right to take responsibility for
investment decisions; the culture of resignation should be reinforced - those who don't perform tasks

local government levels
2.3.1. General provisions relating to the decentralization process

assigned should resign.

In decentralized state management of public investment: Definition of powers and responsibilities of
agencies, organizations and individuals competent in public investment activities.

CHAPTER 3
STATUS OF DECENTRALIZATION OF MANAGEMENT IN CAPITAL CONSTRUCTION

In fiscal decentralization: Each level of authority for budget expenditure is responsible for ensuring

INVESTMENT USING STATE BUDGET IN HANOI CITY

that budget; budget assigned by one level should not be used by the other level tasks, except in special cases.
In case a superior state management agencies authorize subordinates a task, they should allocate fund to
subordinates to perform that task.

3.1. Overview of impact of socio-economic development on the decentralization of management
of investment

In the decentralization of management of capital construction investment: State minimizing direct

3.1.1 Overview of the capital city of Hanoi

intervention into the investment decision, direction and implementation of investment projects delegated to

Hanoi capital with the central geographic location of the Red River Delta, as the leader in economic

lower levels. Higher level authorities delegate more to local authorities, whereas specific provisions for

development in the North, with large population and high population density of the country. Hanoi is also the

capital construction investment projects using or not using state budget are set forth.

concentration of the diplomatic missions, international organizations and large the headquarters of the central

In appraising construction investment projects: Provincial governments organize the evaluation of
projects funded by budget under their decision. Other projects are appraised by the competent parties that
have decision power to make the investments.

government agencies. That's a huge impact, both positive and negative to the management of construction
investment in general and hierarchical management of capital construction investment in particular.
3.1.2. The impact of socio-economic development on decentralization of management of capital

2.3.2. Provisions on decentralization of state budget

construction investment in the period 2007-2014

Those levels of government that have decision authority on estimate state budget revenue,

Economy: The role of economic development of capital city has increasing contribution to the national

expenditure, and local budget allocations shall also be responsible for approval of budget, decision on

economy: In 2014 alone, accounting for only 7.7% of the population but Hanoi has contributed over 10% of

policies and measures to implement the budget, adjustment of budget estimates in case of necessity;

GDP nationwide, 19% of budget revenues and 23% of the social capital of the country. The economy of the

monitoring the implementation of the budget as approved by the People's Council; and determining the

capital city deserves the leading position and is the driving force of economic development in the North and

classification of revenue sources and spending tasks for each budget level in the local government.

the increasingly important role for the country's economy. In 2014, GDP growth was 8.8% in Hanoi (the

2.3.3. Organizational structure and operation mechanism of the state management

country is 6%), reaching $ 3,333/person, more than 2.77 times that in 2007 ($ 1,200/person). Capital city

State power is concentrated in the central level. However, to exercise that power, the central state set

people's lives are constantly being improved and enhanced. Thus, the average income of the population has

out territorial division into administrative units, establishing local government authority for each
administrative units. Each level of government is authorized to decide on policies, measures and socioeconomic plans in accordance with specific provisions.
2.4. The experience of decentralization of management of capital construction investment at

also increased correspondingly.
Social: In recent years, Hanoi is always interested in improving the quality of life for the city's
residents in all fields of social life and increasingly influential economic position, financing in both domestic
and international. Education and training has always been focused on investment, quality is maintained.
Continuous improvement and upgrading of health facilities, community health quality and people's health

home and abroad
From the experience of the major cities in the country (Da Nang, Ho Chi Minh City) and of some

care increases. The management of urban construction order was taken care of. Rural infrastructure was paid

countries successful in implementing decentralization, such as Indonesia, Romania, Sweden, the North

attention in building new rural areas, that achieve important initial results, the welfare of rural areas clearly

American countries... have been analyzed, drawn lessons for city of Hanoi in the decentralization process in

improved.

general, and decentralization of management of capital construction investment, in particular:
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3.3.2. Legal framework for decentralization of management of capital construction investment
using state budget in Hanoi
The management of capital construction investment in general, and hierarchical management of

(Unit: billion VND)

capital construction investment in particular, is executed based on the legal documents issued by the State
government. However, one of the factors negatively affecting the efficiency of capital construction
Government budget’s revenues

investment over time is the legal system on investment, that is incomplete and did not meet the practical

Government budget’s

requirements.
The analysis of shortcomings of a number of laws and regulations related to the decentralized

expenditure

management of capital construction investment of the city above shows: In Vietnam, there is no uniform

Total raised capital

legal documents to stipulate the whole process of capital construction investment as the legal basis for the
implementation and management of investment using state budget. Currently, there are too many regulations
related to investment activities contained in the legal documents, so there are gaps or overlap, thus making it
Figure 3.1 General data collection of Government budget’s indicators in the period of 2007-2014
Source: Data from Hanoi Statistical Yearbook (2014)
3.3. Situation of decentralization of management of capital construction investment using the
state budget in the period 2007-2014 in Hanoi
3.3.1. Overview of the situation capital construction investment in Hanoi
In the post-merger phase with Hanoi Ha Tay, Hanoi has made strong economic development, with
right socio-economic development orientation, with increase in services, industry and decrease in agriculture.
Stable political situation, security and defense are reinforced and strengthened. Foreign affairs and
development cooperation, international economic integration is extended. Business investment plans were
more concerned and decentralization of management of capital construction investment is one of the main
factors boosted this development process. Thanks to the socio-economic development, GDP/capita has
increased, state budget revenues also increased significantly and revenues allowed to remain in the local
government from central budget also increased. It is an important condition to Hanoi promote decentralized
management of capital construction investment management. However, there are still exist some issues in
Hanoi, that need improvement in good timing in order to overcome, such as efficiency remains low in capital
construction investment, construction investment was criticized for being scattered, wasted or lost.
In the period 2007-2014, state budget accounted for 11.2% and 19.4% of the total investment budget
of Hanoi, the loans accounted for between 8% - 11.1%, the equity capital of SOE investment accounted for
between 5% and 7%, and capital mobilized from other sources accounted for between 0.5% and 3.5%. Over
recent period, decentralized sources of capital construction investment increased steadily, being 715 billion
in 2007 to 2,510 billion in 2014, up more than 3 times higher than in 2007, and became an important

resource, that significantly alter the technical infrastructure of the capital city.

difficult for reference and enforcement.
3.3.3. Decentralization of management of capital construction investment using state budget in
Hanoi
In the period 2007-2014, capital construction investment increased on average by 17%/year;
investment rate, especially the proportion of public investment is declining. However, the decentralization of
investment funds allocated for the construction of the districts, towns basically tends to increase gradually to
a total amount of 17.217 billion accounted for 10.5% - 16.2% of the total capital construction of the entire
city, is illustrated by the chart 3.2.
Unit: billion VND

Decentralization
investment
allocated

of
funds

for

the

construction of the
districts, towns
Total

capital

construction of the

entire city

Unit: Billion VND
Year
Index
1.
Total
capital
construction investment
of the city
2.
Total
capital
construction investment
of districts, towns

2007

2008

2009

2010

2011

2012

2013

2014

10.151

14.308

21.468

23.758

22.142

19.691

18.698

Chart 3.2: Scale of decentralisation of capital construction investment from city and capital
construction investment divide to districts, towns, communes (2007-2014)

6780

Nguồn: Source: Compiled from data of the Department of Planning and Investment in Hanoi
On the decentralization of management in the planning: Upon approval of general planning, Hanoi
have expeditiously deployed large volume of plans. Parallel to that, a number of detailed planning, urban

715

1.321

1.845

2.362

2.570

3.194

2.693

2.510

Table 3.1 Decentralized investment in capital construction using state budget in Hanoi
Source: Compiled from data of the Department of Planning and Investment in Hanoi (2007-2014)
11

design, planning and management regulation architecture has been deployed to serve urban management. On
the announcement and handover plan, the red line boundary after the approval, the agencies in charge of
publicly announcing and handing over to the agencies and organizations concerned accordingly.
12


In the period from 2011-2015, annual average of about 30 city projects are made public.

Decentralization of investment preparation, approval, appraisal and investment decision capital

Decentralization in planning have created a combination, integration and ease of documents of agreement on

construction projects: The comprehensive decentralization in capital construction investment projects has

the location and parameters of the project planning by the Department of Urban Planning and Architecture.

created favorable conditions for ministries, branches to proactively execute projects. The percentage of

However, there still exist some restrictions, that need to be addressed.

projects submitted of decentralized projects for the district increased year after year, which showed the

On decentralization in planning capital construction investment: As a rule, the planning process

initiative and active implementation of the investment plan has been significantly improved thanks to

underwent a clear change, that has less top-down nature than before. Hanoi is also moving towards

decentralization of the investment. The rate of restricted bidding has fell down, the number and the total

compliance with the principles in the spirit of the process of decentralization and public administration

investment projects subject to district approval, appraisal and investment decisions have increased

reform. Allocation of responsibilities for capital construction expenditures of each budget level is specified

significantly.

for each level (cities, districts, communes), the details of each sectors have created favorable conditions for

Investment projects address urgent issues of the local goverments timely. However, the situation of

the units in the building investment and development plans, formulation, appraisal and approval of the

decentralization in the management of investment and construction in Hanoi is not tied to income and

investment policy, investment projects, identifying investment projects as decentralized investment

expenditure budgets of each level, there are also hindrends from the state administrative bodies, corruption

management and budget management. However, construction work of medium and long term plans,

that reduces the effective management of investment capital. In addition, the situation in procurement fraud

including a focus on the 5 year plan has not been paid adequate attention; in the process of planning,

is becoming more sophisticated, the preparation of important investment projects last longer, the quality of

participation and consultation between the agencies (horizontally) ramain very weak.

evaluation and approval of design and estimate is limited.

Regarding management of allocation and assignment of capital construction investment plans:

Decentralization of the settlement, the investment project supervision: Under the new budget

Competence in decentralized allocation of capital construction investment, the provincial People's Council is

procudures, the position and role of the People's Councils at all levels, particularly at provincial level was

assigned discretion for subsequent decentralization to correspond the characteristics of each local

raised significantly, giving Hanoi city authorities greater power in the estimate and allocation of their

government. Hanoi city implements decentralization under tasks of spending budget, ie tasks of the

budgets, to tap the potential of the area, which contributes to the socio-economic development. The oversight

municipal level, the task of district and commune level. On the allocation of responsibilities for construction

of investment has contributed to improvement of the mechanism and policies on investment and capital

investment expenditures from the budget, Hanoi has issued construction process and communicate the

construction, thus make these provisions more in line with actual requirements for management in our

economic development plans to authorities of 3 levels. People Commitees at all levels are responsible for

country.
However, there is duplication of regulations on the functions, tasks, lack of clear, well-defined rights

their planning based on the decision of allocation of the annual plans of the city.
However, the district level has not been authorized decentralization of expenditure on capital

and responsibilities between levels of the budget authorities; some capital construction projects in the

construction, there for they do not actively engage in exploiting sources from their own areas and remain

operation has been damaged, degraded or can not put into use; settlement has been slow and inaccurate;

dependent on the sources from the city; districts are trying to find many ways to source funding, create more

monitoring mechanisms of capital construction investment remains weak and inadequate.

works, thus resulting in stretching capital investment and extending time; some projects use to 2 to 3 funds,

which caused many difficulties and complexities in the process of monitoring and adjusting the allocation

3.3.4. Results and effectiveness of use of funds assigned from the state budget for capital
construction investment of Hanoi
The thesis focuses on analyzing and evaluating the effectiveness of investment in capital

plan.
Unit: billion VND

construction with decentralized sources from 29 districts and towns of the city of Hanoi in the period from
2007 to 2013. For optimum results, the thesis uses CCR model, then collated by the BBC model.

No.

Sectors

1

2
Total
(Districts, towns)
Districts
Towns
Old Hanoi’s towns
Old Ha Tay’s towns

A
B

Year

2007

Year
2008

Year
2009

Year
2010

Year
2011

Year
2012

Year
2013

Period
20072013

3

4

5

6

7

8

9

10

715

1,321

1,845

2,362

2,570

3,194

2,693

14,699

447
268
230
38

569
752
299
454

781
1,064
418
646

820
1,542
577
965

1,024
1,546
446
1,100

1,341
1,853
655
1,198

1,116
1,577
419
1,158

6,098
8,601
3,044
5,558

Table 3.3: Results of evaluation of efficiency of decentralization of capital investment (CCR)
No.

DMU
None

No. of DMUs

29

Average

0.813869586

SD

0.228741303

Maximum

1

Minimum

0.288760625

Table 3.2: Summary of decentralisation of capital construction investment in districts, towns,

Source: Results of using DEAsolve software (CCR model)

communes (2007-2013)

CCR model results (1978) showed that the average percentage of districts, towns using decentralized

Source: Compiled from data of the Department of Planning and Investment in Hanoi.

capital investment reached 81.3% efficiency, of which, there are 12 units (04 counties and 08 districts)
reached effective use of capital construction investment (up to 100%); 06 units reached high efficiency,

13

14


ranging from 84% -99.7%; 07 efficiency units ranged from 59% -75%; only 04 units of capital investment
decentralization are ineffective (from 29% -49%), illustrated by the chart 3.3.

In addition, the thesis also analyzes the effectiveness of decentralization of capital construction
investment through descriptive statistics. After primary data collection at agencies in capital construction
investment management at all levels in the city of Hanoi, data were cleaned and analyzed with support of
SPSS 18.0 software, the results show that (table 3.4):
The planning of constractions

Frequency

Percent

Valid

has always been done

Valid

The
Chart 3.3 Effectiveness of use of decentralized investment capital (CCR)
Source: Source: Data thesis research.

Cumulative

Percent

Percent

1.00

3

1.2

1.2

2.00

14

5.6

5.6

6.8

3.00

83

33.2

33.2

40.0

4.00

82

32.8

32.8

72.8

5.00

68

27.2

27.2

100.0

Total

250

100.0

100.0

Percent

Valid Percent

contracting

and

Frequency

1.2

implementing of contracts have

Cumulative
Percent

been done legally

According to the researchers, besides the advantages of model CCR (1978), the use of DEA in the

1.00

3

1.2

1.2

2.00

3

1.2

1.2

2.4

3.00

100

40.0

40.5

42.9

more accurate and objective results, research students will use a different model to test, reference to the

4.00

92

36.8

37.2

80.2

results of model CCR (1978), which is the model BCC (1984). BBC model results show that the average

5.00

49

19.6

19.8

100.0

Total

247

98.8

100.0

3

1.2

250

100.0

study still face restrictions. The biggest drawback of DEA is that it only allows researchers to compare the
effectiveness of the production units in the same template/master studies. This means that the effectiveness
of a unit can not be compared with the efficiency of the units in the sample/other overall. Therefore, to obtain

Valid

efficiency of decentalization of capital investment by districts and towns is up to 95.2%, while the unit that
achieved the highest efficiency is 100% and lowest is 29.8%, illustrated by the chart 3.4.

Missing

System

Total

1.2

.
Legal settlement

Frequency

Percent

Valid Percent

Cumulative
Percent

Valid
Chart 3.4 Effectiveness of use of decentralized capital investment (BBC)
Source: Research data of the thesis.
Chart 3.4 Effectiveness of use of decentralized investment capital (BBC)
Source: Source: Data thesis research.
Based on the analysis results from DEASolve software with CCR model, the BBC showed that the
majority of districts, towns used decentralized capital construction investment effectively in the past time

Missing
Total

1.00

3

1.2

1.2

2.00

9

3.6

3.6

4.9

3.00

89

35.6

36.0

40.9

4.00

100

40.0

40.5

81.4

5.00

46

18.4

18.6

100.0

Total

247

98.8

100.0

3

1.2

250

100.0

System

Table 3.4: Frequency Analysis

Source: Result of using SPSS software

(25/29 units ), only 04 units used decentralized funds ineffectively.
15

16

1.2


First, the capacity to manage assigned resources at beneficiary level of investment has been
significantly enhanced, leading to to better progress and quality of works.
Second, the investment policy of decentralization now in Hanoi is relatively complete, no more
problems, appropriate and consistent with the real practice.
Third, although the quality of the planning work is guaranteed, but the interviewee reflected that the
city needs to continue to further improve in the near future to meet the requirements of development in the

Fourth, the decentralized management of capital construction investment has enhanced the
responsibility of the local budget authorization, enhancing the role, responsibility and real rights of elected
bodies (People's Council at all levels) through the implementation the function of monitoring investments.
Fifth, the support of the City through the decentralization plan investment in infrastructure and
support for the local government to create conditions for the completion of numerous missions, meaningful
projects for local economic development.
Sixth, from the results of decentralized management of capital construction investment, the quality of

direction of building a modern capital city.
Fourth, public investment planning and capital allocation is increasingly innovated and taken seriously
at all levels in accordance with current regulations. Results evaluated at 3.6 / 5 points.
Fifth, work assignment, appraisal and approval of projects, Hanoi have been implemented relatively

life of the people has been increased significantly, and the responsibility of people on community
supervision and responsibility to protect the public investment projects in the area were also raised.
3.3.2. Disadvantages:
First, the development and promulgation of policies on decentralization of investment in recent

well.
Friday, synthesis results, decentralized implementation of capital construction investment projects according
to current regulations as well as the evaluation and allocation norms and criteria for investment in capital
construction funds decentralized from the city budget for county , districts and towns are still rated as low.
Seventh, the lower level authorities request that the city make greater decentralization to lower levels

years in Hanoi remain fluctuated, incomplete and inconsistent.
Second, there is no specialized legal documents, specifically provides for the decentralization of
investment management.
Third, decentralized management of capital construction investment now almost mean handing over
all rights to the districts and towns, while the inspection, testing, monitoring remain as administrative

for supervistion of investment.
Finally, survey respondents also frankly reflected that the authorities with decentralization power do
not pay attention to allocation of sufficient funds for capital construction investment and to the quality of

formality.
Fourth, decentralized form of investment is not really diverse (still mostly transfer of all rights to the
local governments) and decentralization is incommensurate, not matching the capacity (financial and human)

works put into use remains low.
In summary, results from analysis from DEASolve software using CCR model, the BBC and the
results analyzed through descriptive statistical analysis from SPSS shows that the majority of the districts
and towns in the city of Hanoi use decentalized capital for construction investment with good results. While
DEASolve software with CCR model, the BBC pointed out the details of each district, town that use

decentralized capital construction investment effectively or not? The rate of pass/fail? Namely how much?,
How effective or ineffective, the statistical analysis from SPSS software described again shows an overview
of the efficiency of use of assigned capital in different areas of management or in the process of
implementing a specific hierarchical assignment. Although according to the overview or details, 2 results are
very similar. This is an important basis to provide critical solutions, feasible to complete decentralization of
use of capital construction investment in Hanoi city budget in the near future.
3.3. General assessment of the decentralization of management of capital construction
investment using state budget of Hanoi, period 2007-2014.

at local government levels.
Fifth, fiscal discipline in the implementation of decentralized management of capital construction
investment is not really strict.
Sixth, the work of designing and approval of projects has not generally focused on the feasibility of
resources, often beyond the capacity of the state budget of Hanoi.
3.3.3 The cause of disadvantages:
First, the system of legal documents on construction investment and decentralized management of
capital construction investment are incomplete and does not comply with international standards.
Secondly, the longer the delay in approving the general plan, many local government and branches
have no planning, or no high-quality planning, not correspond to reality and feasibility, not matching the
strategic objectives and planning, lacking interest in the long-term factors, harm the environment, society,
especially in the formulation, evaluation of planning.
Thirdly, in the process of investment planning, there is not adequte participation and consultation of

3.3.1. Advantages:
First, decentralized management of capital construction investment capital use municipal budget has

the goverments in the region; consultations with and between the ministries and branches (both vertically and

enhanced the quality of life of people and contribute to promoting economic and social development,

horizontally) to ensure inter geographical coherence, strengthening linkages and cooperation between the

especially in the districts and towns communes in Hanoi.

local governments.

Second, the decentralized management of capital construction investment initiative created for the

Fourthly, the determination of criteria and norms for allocation and assignment of decentralized

DP in the socio-economic development, to create conditions to improve the management of grassroots

planning and investment from the city budget to the district level lack investigation, review and amendment

cadres, reduce management burden for the State management agencies at the city level.

accordingly with the task of actual annual expenditure.

Third, the mechanism of decentralization of capital construction investment has encouraged districts,
towns strive to increase revenue to invest resources for development expenditure.

Fifth, the quality of preparation of investment is not high, many projects had to adjust the estimates
and the total investment many times due to unrealistic preparation of investment. Sixth,

the

work

of

community supervision is very limited, the settlement and distribution of capital construction plans,

17

18


including capital construction investment capital decentralized authorities are not well informed, transparent

following: promoting and implementing clearer hierarchy in capital construction investment management,

for people's supervision, which leads to low quality and work progress.

aims to build a system of decentralized management of capital construction investment from the city budget

Seventh, the project management units are not efficient, there are too many management units under

more comprehensive and independent of the municipal government; local government should be given
higher autonomy in decision-making and management of decentralized funds allocated for capital

the People Committee or other agencies.
In summary, restrictions and limitation cause were specifically assessed by the author in each

construction investment projects in the area management level, expansion of the local budget autonomy in

content, one can state that the administrative discipline, the "heart" in the work executed by the managers,

spending decisions, allocation and layout capital construction investment projects; increased autonomy to the

owners of investment is important because if they are accountable and responsibile, and have no personal

district on nurturing revenues; innovation in process of allocating and assigning plans, settlement and

interest, it will limit a lot of losses and fraud in investment as well as ensuring the quality of works and

monitoring of capital projects using construction investment decentralized budget; provide greater authority

investment efficiency.

to local governments; enhance transparency and accountability in decentralized management of capital
CHAPTER 4

SOME SOLUTIONS FOR IMPROVEMENET OF DECENTRALZATION OF MANAGEMENT OF
CAPITAL CONSTRUCTION INVESTMENT USING STATE BUDGET IN HANOI UP TO 2020.

construction investment at the local government level.
4.2. Solutions to improve decentralization of management of capital construction investment
using state budget in Hanoi
4.2.1. Completing the legal framework for decentralization of management of capital construction

4.1. Context, trends, perspectives and orientation of continuing decentralization of

investment in the overall state budget decentralization:
Need to review, amend and promulgate legal documents related to investment and capital

management of capital construction investment
4.1.1. Context, trends and perspectives on decentralization of management of capital construction

construction investment decentralization to ensure consistency, integrity according to international standards
in the management of capital construction investment activities; Need to improve the legal framework on

investment using state budget in Hanoi.
Over the past years, the decentralization of management of capital construction investment has made

decentralization and decentralization in the management of capital construction investment; Need to continue

significant changes, however, the degree of decentralization of Vietnam is still low. Therefore, decentralized

building programs, investment in capital construction plan medium and long term to ensure investment

management of capital construction investment is a right trend right, that expands wider and deeper in the

program associated with spending plan medium and long term, to ensure the continuity of the project and the

investment management activities of each country.

balance between demand for investment and available resources.

However, to what extent the authorization to each sector depends on the specific conditions of each

4.2.2. Completing the decentralization of planning management:

local government and specific field of decentralization. Therefore, to determine the extent of decentralization

Improving the system of legal documents on construction planning, urban planning, construction

of investment suitable for local governments in Hanoi, three elements should be taken into account: capacity

investment management; In the state management of capital construction investment projects from the city

in decentralization of capital construction investment of Hanoi local government authorities; ensurance that

budget to ensure compliance with the objectives of the strategy and planning of socio-economic conditions

all levels of government have sufficient resources to provide basic public services to its residents, and level

of the city; Ensuring the compatibility of operational decentralization of investment management with

of poverty and inequalities between urban and rural districts, towns.

strategic objectives and planning to help develop socio - economic development healthily, in right direction,

Along with taking into account the specific factors mentioned above in the decentralized

so that the economy develops in orderly, systematic, efficient and sustainable manner.

management of capital construction investment, the process of decentralization of capital construction

In the formulation and evaluation of planning, the city needs to review and request the departments,

investment in the coming period must also comply with the basic principles of decentralized management:

districts to have roadmap, priority order and schedule and specific time to complete the work to ensure hight

clear distribution of responsibilities for each budge level in terms of provision of public services at their

quality of the formulation and appraisal of planning; Principle of concretazation of general planning: Hanoi

level, corresponding to the required quantity and quality of public services; financial resources associated

requires specific synthesis report to be submitted o ministries concerned, to exchange, discuss and agree on a

with the management responsibility of capital construction investment; responsibilities associated with

solution; Improve the capacity, quality of staffs, who work on planning and promulgating policies to

expenditure authority of local government with their powers to control and manage revenues and its

development planning to ensure alignment with the urgent tasks of the ministries and departments.

spending; management capacity of the government to ensure the implementing effective decentralization of
management tasks of capital construction investment; enhance accountability on the management of
government investment in capital construction to the people in the area.
4.1.2. Orientation to strengthen decentralization of management of capital construction

4.2.3. Strengthening decentralization of planning in capital construction investment using state
budget of Hanoi:
The immediate solution is to improve the quality of budget planning in the local government; in the
process of planning in general and decentralization of capital construction investment in particular, it is
necesssary to to create the conditions for each level of government to be proactive in planning their level, to

investment using state budget in Hanoi
Based on specific elements and principles to strengthen decentralized management of capital

avoid being dependent on the higher levels.

construction investment mentioned above, according to the author, the decentralization oriented investment

The long-term solution is to terminate the intervention of the superior autorities in the establishment

manager for local government in Hanoi capital construction in the coming period should focus on the

and allocation of investment plans of lower level government, to strengthen the role and authority of the

19

20


People's Councils at all levels in the decision to grant budget, avoid formalities in investment planning and

CONCLUSION

capital construction investment decentralization at district and commune levels; provide autonomy on
revenue and expenditure decision to the local governments to ensure their proactiveness in planning for

Over the recent years, the process of decentralization has taken place quite strongly in many fields,

investment/capital construction investment decentralization; move step by step toward separation between

especially in economic and administrative management. In parallel with the process of decentralization in

investment planning by cities and investment planning in the district planning process.

this field, it inevitably leads to the decentralization of management of capital construction investment,

4.2.4. Decentralization in the allocation and assignment of investment plans and capital

because it is impossible to decentralize responsibility and authority to lower levels without giving them
financial resources necessary to execute the responsibilities and authorities.

construction investment:
It is necessary to continue perfecting the system of capital allocation, investment in capital

Decentralization of management of capital construction investment management is a difficult

construction decentralization in line with the actual conditions; research is needed to determine the allocation

process, influenced by many factors. Decentralization of construction investment brings many benefits in

of investment plans, decentralization of investment in capital construction budget in a scientific manner and

managing it, but it also contains many potential risks, especially inequality vertically and horizontally

in accordance with each particular field; should delegate responsibility for local government tied to self-

between state budget levels, leading to inadequate supply of public services in some areas in relation to the

determine the allocation of investment capital, capital construction investment capital for decentralized

supply of public services in general. However, we should not seek to limit or delay the process of

authorities at the levels below the framework issued by central and city goverments; proposing norms for

decentralization because of the difficulties and risks involved. Hindering this process would entail negagtive

allocation of investment capital, investment in capital construction assigned to each local government taking

economic political social, consequences, destructive dynamism and autonomy of the local governments,

into account requirements for each local government to secure sufficient capacity to provide essential public

which make state subordinate levels depend on the superior levels, not utilizing strengths of each local

services

governments for economic development and scaling up the budget; It also cause the city government to

for residents of the arean; gradually establish the relationship between policies, norms and

implementation results in the use of capital, investment in capital construction using decentralized budget.
4.2.5. Completing the decentralization of investment preparation, approval, appraisal and

backslide on the specific works of subordinates, reduce time for centralized resource management and
implementation of macro strategic objectives of the capital city.
International management experience and the largest city in the country recent time on capital

investment decision capital construction projects:
It is necessary to reform of administrative procedures, enhance the accountability of civil servants;

construction investment showed that for the process of decentralization capital construction investment to be

take measures to handle, strong redress deliberately organized fraud in bidding for deterrent lesson for other

successful, one must adhere to some basic principles, which are: decentralization must be appropriate to the

investors; improve the quality of investment preparation; enhancing the responsibility of organizations and

capacity (organization, human, financial resources), in accordance with the level of development of socio-

individuals working to approve implementation, evaluation and project investment decision in

economic, financial division courses must correspond to the tasks of spending... Also , strengthening

decentralization.

decentralization of management of capital construction investment from city government to the level of

4.2.6. Continuation and completion of decentralization in settlement and supervision of capital

districts, communes requires city government to be strong enough, capable of monitoring the implementation
of government employees; systematic decentralization law on capital construction investment management

construction investment projects:
It is necessary to supplement and complete regulations on the state administration in the investment,
decentralization in capital construction investment; perform the inspection and supervision of investment
projects, decentralization of investment in capital construction; strengthen guidance and direct supervision of

complete with mechanism for promoting democracy, creating favorable conditions for citizens, communities,
civil society organizations engaged in in state management in capital construction investment.
In Vietnam today, investment in capital construction projects are classified into 4 groups and
depending on the size and nature of investment projects, for which decentralization of state management

investment activities by the local community.
4.2.7. To strengthen the project management unit and the training and retraining of cadres

levels differ. However hierarchical thinking in terms of scale of the project without considering their
assigned tasks is one of the barriers and is the cause of the "fiscal decentralization incompatiblity” to the

working in the investment management of the City:

Shift the project management units to operate as businesses, and hand investor to the unit, that

allocation of responsibilities between levels. Besides, in the process of decentralization of state management

manages and use the works; encourage and create favorable conditions for staff working in investment

of capital construction investment also has some problems, that is, in process of authorizing, city government

management; provide regular training classes on regulations on investment and construction management for

authorise the full power without an appropriate mechanism for decentralization/devolution in line with the

the city team to the district, town and commune officials; should regularly review staff capacity to move,

characteristics and capabilities of the district governments, especially at the commune level; the monitoring

arrange, rearrange, and determined to dismiss those unqualified for decentralization of management of

and supervision of the city government remain heavily procedural and administrative; the situation whereas

capital construction investment; encourage and create favorable conditions as well as the pressure to improve

subordinate units are authorized to make of investment decision, but can not balance the investment, bad-

human resource in consultancy work on capital construction investment management in general, and officials

debt investment, are common.

working in decentralized management of capital construction investment in particular ; improve the quality
of the activities of the consultants on the construction investment.

21

This thesis has proposed many concrete solutions to overcome limitations, however, have not yet
analyzed all the reasons that exist until today.

22


To address the problems mentioned above, in the process of developing a legal framework on
decentralization of state management in construction investment for Hanoi in the future, first of all, we need
to correctly identify and clarify the role of the city, as to what extent to play in socio-economic development,
and once the specific role of the city is identified, it can then apply investment policies effectively. Besides,
in the context of a big gap of socio-economic development and state management capacity at the local level,
diversification of forms of decentralization is essential.
In addition, although the legal framework for decentralization of state management of capital
construction investment has a tremendous role, however, the legal system has its limitations, the
problems that should be solved by political ideology, perception or power relationships, are often
difficult to resolve by using legal tools. Therefore, the shortcomings related to the decentralization of
the management of capital construction investment in Hanoi can be fundamentally resolved only by the
determination of the state political system. /.

23