Governance, Barriers, and the Socioeconomic Prospect in Laos
Mana K. Southichack, Ph.D.

Development and Agricultural Economist
Interim Executive Director
LaoEcon Organization


Government can either serve as a barrier or facilitator for socioeconomic progress. While some socioeconomic progress has been made since the 1990s, due largely to foreign aid, the existing governance emphasizing societal control does not only restrain economic growth, it exacerbates income inequality at the expense of the poor and disadvantaged. As an example, government suppression of the free flow of information and the private sector’s participation in the publication and media businesses does not only depress employment and professional development in the industry, the development of national intellectual capital stock and the market at large, it discriminates against the poor and disadvantaged. The existing judicial system, which is un-immune from the interference of high-ranking individual party members and government officials, can neither guarantee a level playing field to investors nor justice to the average citizen, an advantage for the rich and/or politically well-connected. Barriers to socioeconomic progress that exist in Laos are numerous. Certain barriers are purely natural phenomena while others are manmade and event-driven. Lowering these barriers would stimulate economic growth and social changes, but to whose advantage, the elites or the mass, it depends on how broadly and far reaching these barriers can be lowered. However, thus far, the efforts to reduce economic barriers by the Lao government have focused on natural variables while evidences indicate that governance is the main impediment to economic and social progress. The absence of fundamental reforms in governance has caused the fruit of foreign aid and economic growth to be skewed towards the few urban elites at the expense of the poor. To move towards sustainability and broad-based economic growth with social advancement necessary for poverty eradication and beyond, broad-based fundamental changes are necessary. In this light, this paper examines how and in what key areas has governance obstructed and promoted socioeconomic progress in Laos.