The empirical analysis of cigarette tax avoidance and illicit trade in Vietnam, 1998-2010.

Illicit trade carries the potential to magnify existing tobacco-related health care costs through increased availability of untaxed and inexpensive cigarettes. What is known with respect to the magnitude of illicit trade for Vietnam is produced primarily by the industry, and methodologies are typically opaque. Independent assessment of the illicit cigarette trade in Vietnam is vital to tobacco control policy. This paper measures the magnitude of illicit cigarette trade for Vietnam between 1998 and 2010 using two methods, discrepancies between legitimate domestic cigarette sales and domestic tobacco consumption estimated from surveys, and trade discrepancies as recorded by Vietnam and trade partners. The results indicate that Vietnam likely experienced net smuggling in during the period studied. With the inclusion of adjustments for survey respondent under-reporting, inward illicit trade likely occurred in three of the four years for which surveys were available. Discrepancies in trade records indicate that the value of smuggled cigarettes into Vietnam ranges from $100 million to $300 million between 2000 and 2010 and that these cigarettes primarily originate in Singapore, Hong Kong, Macao, Malaysia, and Australia. Notable differences in trends over time exist between the two methods, but by comparison, the industry estimates consistently place the magnitude of illicit trade at the upper bounds of what this study shows. The unavailability of annual, survey-based estimates of consumption may obscure the true, annual trend over time. Second, as surveys changed over time, estimates relying on them may be inconsistent with one another. Finally, these two methods measure different components of illicit trade, specifically consumption of illicit cigarettes regardless of origin and smuggling of cigarettes into a particular market. However, absent a gold standard, comparisons of different approaches to illicit trade measurement serve efforts to refine and improve measurement approaches and estimates.

Multilevel Governance and Accountability: Does Decentralization Promote Good Governance?

Today, the trend towards decentralization is far-reaching. Proponents of decentralization have argued that decentralization promotes responsive and accountable local government by shortening the distance between local representatives and their constituency. However, in this paper, I focus on the countervailing effect of decentralization on the accountability mechanism, arguing that decentralization, which increases the number of actors eligible for policy making and implementation in governance as a whole, may blur lines of responsibility, thus weakening citizens’ ability to sanction government in election. By using the ordinary least squares (OLS) interaction model based on historical panel data for 78 countries in the 2002 – 2010 period, I test the hypothesis that as the number of government tiers increases, there will be a negative interaction between the number of government tiers and decentralization policies. The regression results show empirical evidence that decentralization policies, having a positive impact on governance under a relatively simple form of multilevel governance, have no more statistically significant effects as the complexity of government structure exceeds a certain degree. In particular, this paper found that the presence of intergovernmental meeting with legally binding authority have a negative impact on governance when the complexity of government structure reaches to the highest level.