Abstract

Vietnam has been exposed to various advantages and challenges since becoming a member of the AEC.This context requires innovation in the state's perception of governing, regulating and operating the country. In the contemporary stage, the developmental state model isof pivotal importance and necessity to the efforts of achieving the national goals ofprosperous people and a strong, democratic, equitable, and civilized country. This paper discusses concepts, roles and basic functions of a state, and analyzes key aspects of the formation ofa developmental state. Special focus is onthe state's market failure correcting role, its non-competitive nature, and the state that does not act for markets. The ultimate goals of the developmental state is to ensure the rights to live, liberties, and wealth of individuals. The concept of the developmental state wasfirst developed by Chalmers Ashby Johnson (1982). The developmental role of the state is centered on improvingits competence to promote market activities by means of ensuring public security, lessening uncertainty in the economy, mitigating asymmetricinformation, reducing transaction costs, etc. for markets. Finally, we suggest a package of seven solutions to the formation of a developmental government in Vietnam.