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Multilateral and bilateral aid agencies now direct much of their East Asia activities to so-called''governance''reform. Almost every major development project in the region must now be justified in these terms and will usually involve an element of legal institutional reform, anti-corruption initiatives or strengthening of civil society-and often a mix of all of these. Most are, in fact, major exercises in social engineering. Aid agencies and major multilateral players like the IMF, the World Bank and the Asian Development Bank, are attempting not just to improve governance systems and combat corruption but, implicitly, to restructure entire national political systems and administrative structures.''Conditionality''puts real weight behind these projects. If successful, they could transform the face of East Asia. Defining''governance''and understanding''corruption''are therefore not minor issues of terminology. However, a great deal of optimism is required to believe that social engineering for good governance will succeed in either Indonesia or Vietnam within the foreseeable future. In Indonesia, there is neither the political will nor the mechanism to act, since the legal system is itself utterly corrupted. Better laws have been passed, but they fail in implementation. In Vietnam the problems are somewhat different, but the outcomes are similar. Corruption is widely recognised to be a major political, social and economic issue-even by the Party itself-but few cases are ever tried. The bureaucracy (including the legal system) and the party are so complicit that reform is impossible. These systemic problems point to the basic flaw in the good governance agenda and strategy. A …