Reforming the Development Governance Model in the Digital Era: Drivers for Vietnam's Ambitious Growth Targets toward 2030 and the 2045 Vision

Abstract

In the context of a twenty-first century shaped by VUCA (Volatility, Uncertainty, Complexity, and Ambiguity) conditions and rapid digital transformation, traditional linear, siloed governance models are revealing serious systemic misalignment in the face of non-traditional security challenges. This study advances an integrated multi-layer development governance model grounded in the theory of Optimal Institutional Layering. Drawing on the metaphor of a living organism to represent key functional roles, the model integrates four dialectical governance sub-layers: (1) the Skeletal System (Traditional Public Administration), which establishes foundational stability and rule-based discipline; (2) the Muscular System (New Public Management), which drives efficiency and organizational streamlining through market-based instruments; (3) the Nervous System (New Public Governance), which optimizes resource allocation through networked coordination mechanisms; and (4) the Brain (the Digital Developmental State), which assumes strategic leadership by leveraging data and technology to shape market trajectories. A case analysis of Vietnam reveals that the country is successfully transitioning from consolidating its institutional foundations and streamlining its administrative apparatus toward a phase of connectivity and innovation-driven development in the digital era. The study argues that the synchronized operation of these four sub-layers will generate a state of dynamic equilibrium, enabling Vietnam to resolve the governance paradox between the imperatives of stability and the demands of transformative growth. This integrated approach constitutes the critical lever for enhancing total factor productivity (TFP) and fostering systemic innovation. In so doing, it facilitates a structural reorientation of Vietnam's growth model from extensive to intensive development, ultimately advancing the nation's aspiration to become a high-income developed economy by 2045.