Lao PDR has shown a strong record of economic growth and poverty
alleviation since the early 1990s. Yet, the pace of economic development has varied
significantly between different parts of the country – the rate of growth was initially
faster in more developed areas, but after the mid-1990s growth has been stronger in
poorer rural areas. Here it is shown that this pattern of regional development has been
driven by the nature of market integration. This is highlighted in three case studies
covering: (i) the effect of transport infrastructure and local institutions on domestic
consumer good markets; (ii) the process of regional integration with neighboring
countries; and (iii) the ability of Lao producers to compete on the world market for
coffee.