Viet Nam is one of the favorites of international donors for providing development aid and support. Since its opening up and economic reforms in the early 1990s, it has received an enormous amount of money 1 of Official Development Aid (ODA) from both bilateral and multilateral development programmes as well as many development funds from non-governmental agencies. Nevertheless, whether development funds are put to good use or, in other words, are effective in enhancing development has long been a question. The fact is that Viet Nam has been one of the most robust economies, in terms of GDP growth, in the region from the mid-1990s to the mid-2000s. One point in question is whether development funds have led to the economic improvement of Viet Nam, or the other way round, whether Viet Nam’s robust economy has attracted ‘effect’-thirst donors.

Quite a number of studies have attempted to analyze large sets of data across countries to prove or disprove the direct relationships between economic improvement and development, yet, no definite conclusion can be drawn. This research employs a qualitative approach to examine the relationship between development and development aid on the ground level. It targets three international donors – two ‘traditional’ donors: Japan and the Word Bank, and one new donor: Hungary.

Field work was conducted in a city in the south of Viet Nam in which the researcher built up rapport with local project staff, observed interaction between development workers from the donors’ and recipients’ teams, and collected views and comments from different parties involved in and related to the projects. Through collecting field data on such a micro-level of the actual implementation and project management processes, the research has been able to attain a different lens in understanding ‘development’.

There have been many critical analyses of the development policies of international donors and their development directives, such as the widely quoted Washington Consensus (WC) and post WC neoliberal principles. The notorious ‘rules and conditions’ imposed by donors are often critiqued. While this research will incorporate these critical discussions into its analysis, it argues that different donors do show different ‘characteristics’ and their interactions with local project teams vary. Such interactions often shape the ways project staff handle the projects and their views on the effectiveness and fruits of development work. Rather than soliciting market forces into development work, different terms and conditions imposed by the donor actually constrain the market mechanism and prioritize donors’ interests. The ‘market’ is set aside.

This research argues that there is no simple logic between development aid and development, as development itself is a contested concept. This research seeks to examine ‘development’ from below through a processual approach and an actor-oriented approach. It will focus on the interactive process between donor and local development actors. Through examining the actual management processes of ODA projects in Viet Nam, this study maintains that ‘development’ is a complex interactive process between people and systems, entailing different ideologies and concepts (of development and development related issues), conflicting manners towards project management, and conflicting interests of different actors and parties. In development work, there are conjuncture and disjuncture of interests on both state and individual levels, clashes of inter-state relations, and conflicting sources of power and legal regimes.

Based on the above two fundamental approaches, and collected data, this research then examines three analytical themes, including the politics of development, the new political economy of ODAs, and the development resilience. It will reveal the imbalance of power relationships within development work, entangled political and economic interests of donor in offering ODA, and how local actors, in the face of different donor behavior, have put forward much resilience in response to different ‘problematic’ scenario.

While most projects will at the end of the day be ‘accomplished’ – a hospital built, a bridge constructed, a sewage system installed – whether this means ‘development’ is open for interpretations. This research has revealed that development in practice (as an interactive process between those involved in managing aid and aid projects) has often challenged development in rhetoric, and has incurred conflicting interests of different parities, power struggles, and the wrestling for supremacy during such a process.

Finally, the ‘new governance’ approach suggested by this project aims to promote the ground level and bottom-up approach in development studies, and focuses on both donor and recipient actors; both of them are responsible for problematic management of ODA projects. Overall, development governance has to be understood in local contexts and in the ‘process’ of ODA management; and only with such understanding, we would be better informed on ways to achieve good development governance.