After one year of operating Vietnam's two-tier local government model, experts say early gains are evident, but stronger legal authority is needed to ensure coordinated governance across newly expanded urban regions.
The organization of local government and the capacity of commune-level administrations have emerged as major issues after one year of implementing the two-tier local government model. Many localities have raised concerns and proposed recommendations aimed at improving operational efficiency, strengthening governance quality and enhancing implementation capacity, in line with the direction of General Secretary and State President To Lam.
VietNamNet is publishing a special series titled "Redefining the role of commune-level government in Vietnam's two-tier local administration", examining the organization of grassroots government, human resources, and policy recommendations to improve the effectiveness and efficiency of the new governance model.
One year after implementation, Ho Chi Minh City's experience demonstrates the effectiveness of the two-tier local government model through its socio-economic performance in 2025 and the first six months of 2026.
Most socio-economic development targets, state budget revenue goals and Party-building indicators have been achieved or exceeded. The city's urban landscape and infrastructure have continued to improve rapidly, while social welfare programs have been effectively implemented.
Among the new initiatives introduced by the city are free health check-ups for residents, free public bus services, construction and renovation of community facilities, accelerated implementation of at least 200 key projects to mark major national events and Party congresses, and expanded support for war veterans, low-income households and workers.
The city has also reported positive results in improving the effectiveness of both municipal and commune-level government operations.
VietNamNet spoke with Dr. Tran Quang Thang, Director of the Ho Chi Minh City Institute of Economics and Management, about the challenges facing the city after one year of implementing the two-tier local government model.
Dr. Tran Quang Thang, Director of the Ho Chi Minh City Institute of Economics and Management. Photo: TL
After one year of implementing the two-tier local government model, how do you assess its impact on Ho Chi Minh City's development?
Overall, after one year, the model has generated broad impacts across both economic and social sectors.
Economically, I believe there are many encouraging signs. The city now has greater opportunities to expand its development space and accelerate growth thanks to improved regional coordination compared with the previous situation, when the three localities operated independently.
Infrastructure is gradually becoming more integrated, providing an important foundation for attracting strategic investment and strengthening competitiveness on a larger scale with a longer-term vision.
At the same time, the economic potential of a mega-city with more than 14 million residents, a strong industrial base and a modern seaport system is considerable. The two-tier model is creating conditions to unlock that potential.
On the social side, however, pressures remain significant.
Grassroots administrations are under heavy strain in many areas, while the quality and accessibility of public services have yet to keep pace with rapid population growth and urbanization following the administrative merger.
Residents in peripheral and newly merged areas have not yet benefited proportionately because social infrastructure has not received corresponding investment.
The widening gap between economic growth and the capacity of social services requires early attention. Otherwise, it could lead to increasing inequality in access to opportunities and quality of life across different parts of the same metropolitan area.
What challenges does creating a unified development space after the merger pose for planning and resource allocation, given that each area has its own strengths and characteristics?
This is far from a simple task. It involves multiple interconnected challenges that require long-term vision and decisive leadership.
The first challenge stems from the fundamental differences among the three areas. Ho Chi Minh City, Binh Duong and Ba Ria - Vung Tau each have distinct economic structures, infrastructure systems, population characteristics and administrative cultures.
Without effective coordination, these differences could complicate development planning, as each area may naturally seek to prioritize its own comparative advantages rather than broader regional interests.
In my view, if the shared regional space after the merger - from transport infrastructure and free trade zones to an integrated regional metro system - is to become a genuine growth engine, the essential prerequisite is establishing a regional coordination mechanism with real authority.
Such a mechanism must be strong enough to unify planning, investment and cross-regional infrastructure management.
Only then can the newly integrated area function as a single economic ecosystem rather than a loose administrative combination. Without such a mechanism, even major infrastructure projects such as metro lines or free trade zones would remain disconnected pieces incapable of generating genuine regional synergy.
From a planning perspective, the existing master plans of the three localities were developed independently, with considerable overlaps and inconsistencies. Integrating them into a unified spatial framework is therefore not only a technical challenge but also a political one, as each locality has vested interests embedded in its previous planning framework.
In terms of resources, investment will naturally flow toward the urban core, where infrastructure is stronger, markets are larger and returns are higher. Without proactive allocation mechanisms, development disparities within the region are likely to widen.
At the same time, each locality has different investment priorities based on its own development needs, making it more difficult to establish common priorities and slowing implementation.
Finally, differences in infrastructure quality and administrative capacity across localities create additional delays in putting integrated planning into practice. It is unrealistic to expect regions with significantly different starting points to develop at the same pace under identical standards.
What concerns you most during the transition to operating such an unprecedented metropolitan area under the two-tier local government model?
My greatest concern is that the current administrative system may not yet have the capacity to match the size and complexity of this newly formed mega-city.
If institutional capacity fails to keep pace, commune-level governments will become overloaded, creating a real risk that the entire system could struggle during the transition period - arguably the most critical stage.
Specifically, commune-level authorities are now expected to manage the workload of a mega-city while operating with staffing levels, institutional capacity and administrative procedures designed for the previous model. Administrative bottlenecks are therefore almost inevitable, with citizens and businesses likely to bear the greatest impact.
There is also a realistic risk of coordination delays because the three areas, each with different administrative cultures, are still adapting to operating under a unified governance framework, while new coordination mechanisms are still being established.
Differences in data systems and digital infrastructure among the three areas could also create bottlenecks in managing cross-regional matters, from land administration and business registration to transport coordination.
Moreover, if local authorities continue operating according to habits formed before the merger, prioritizing local interests over regional objectives, conflicts in planning and investment priorities could emerge during the transition.
Finally, and perhaps most importantly, I am concerned about legal uncertainty during the transition.
Until the previous legal framework is fully replaced by a new one, many projects and administrative procedures may face uncertainty over which regulations should apply, leading to delays.
In my view, the forthcoming Law on Special Urban Areas should grant the two-tier local government model five key legal powers to ensure the entire region functions as a unified system rather than allowing each locality to pursue its own agenda.
The first is the authority to formulate and approve integrated regional planning, enabling the city government to adopt a unified spatial master plan covering the entire merged area with legal authority above sectoral and local plans.
The second is a legally binding regional coordination mechanism through the establishment of a Regional Coordination Council with authority over land allocation, infrastructure, transport, environmental management and logistics, ensuring that all local governments comply with common regional decisions.
The third is centralized authority over resource allocation, allowing the city to determine budget distribution, public investment and strategic land use according to regional priorities rather than former administrative boundaries.
The fourth is a unified data-sharing and digital governance platform requiring all localities to use common systems for land management, population data, investment and infrastructure, preventing fragmented digital platforms and inconsistent standards.
Finally, the city should be granted authority to review, supervise and suspend local planning decisions whenever they conflict with the overall regional development strategy.
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