This study aims to understand two contradictory modes of reform that underpin Vietnam's urban development. The first mode, what I call categorical erosion, enables the capitalization of land by utilizing the gray spaces of legality and the opaque nature of authority under late socialist transition. Changes to the country’s political and legal structure, namely decentralization of governance and the 1993 land law privatizing land use, have created opportunities for the state to experiment with land expropriation and urban planning schemes central to the goals of state-led marketization. These schemes often contradict one another. The other mode, good governance reform, critiques the practices of categorical erosion as it assumes that the old ways of doing business under socialism cannot produce capitalist growth. This latter mode often misidentifies such practices as corruption. Good governance reform, like categorical erosion, is embraced by the state and spearheaded by development institutions. These reforms promote norms of liberalism, or strong private property rights, the rule of law, democratization and the strengthening of bureaucracy. Urbanization is a key process through which the two modes of reform conflict and expose the paradoxes of Vietnamese development under reform. I hypothesize that these reforms expand the legitimacy of the Vietnamese state while producing competing claims and rights to urban space predicated on land expropriation. Using the extended case study and deploying qualitative methods, the proposed research will examine two sites: peri-urban enclave development and NGO good governance initiatives. While land capitalization and reform are my objects of inquiry, they serve to elucidate: 1) the production of late socialist state power through urbanization; 2) the changing landscape of rights versus claims to urban space under economic transition; 3) how the two modalities of reform have created avenues of inclusion and exclusion to the city.