Governance Quality, Infrastructure Development, and Income Inequality in Vietnam’s Provinces

This study examines the effects of governance quality and infrastructure development on reducing income inequality in the provinces/districts of Vietnam. Panel data from population of 63 provinces in Vietnam over a 3-year period (2018–2020) is collected, with the GINI index serving as the proxy for income inequality. The study utilizes the fixed effects estimation method with robust standard errors to investigate the relationship between investment in development infrastructure, governance quality, and income inequality. The findings support the hypotheses that governance quality and infrastructure development are negatively correlated with income inequality. The study highlights the need to redirect investment away from industrial development and toward other infrastructure projects to effectively close the income gap and improve living standards in the provinces. However, the study acknowledges limitations in data availability, suggesting the need for further research to explore specific income segments and causality relationships to inform more targeted policy implications for local governance in Vietnam.