This article applies a novel approach to analysis of the transition to the market economy in Vietnam, a country with a political economy that draws upon South-East Asian, Sinic and Leninist cultural elements. This was a 'conservative' transition, in the sense that no shift in political regime occurred. Understanding transition as a process where endogenous forces drive and resource institutional change, and far from dependent upon policy shifts, the article argues that it relied heavily upon two sets of phenomena. The first may be understood in terms of the creation and seeking out of economic rents, in the 'neoclassical' sense of resources available 'below economic costs'. When rents result from institutional obstacles to competition, institutional change can support relatively costless output gains. I argue for Vietnam that as the economic system switched from plan to market, so rent seeking shifted away from advantageous access to resources for plan implementation, to switching resources into forms that supported market-oriented activity. This 'rent switching' (RS) relied upon adaptive social relations, comparable to the 'competitive clientelism' of the SEA studies literature, that were preserved and augmented during transition. It also permitted mobilisation of resources derived from static efficiency gains. This framework contrasts with a second, more 'classical' in nature, that concentrates upon the creation of appropriable resources (ARs) and contestation over them. These help explain the medium and longer term, and how ways of appropriating resources supported the political economy of systemic change. At root, this is then to do with the emergence of factor markets (land, labour and capital), class formation and thus broader social and cultural change. The article thus argues that different economic theories provide useful insights into the social as well as the economic implications and nature of the transition to a market economy. Given that static efficiency gains, whilst significant in relative impact, tend to act over the short term, and, since growth processes take decades, the 'neoclassical' approach is ultimately less important than the 'classical' one.
