Currently, public governance theory and "good governance" have a profound and positive influence on the government reform process in many countries around the world today. In essence, good governance is the set of principles and criteria on social management to maximize public interests as well as promote and ensure  the harmonious and sustainable development of a country. It can be said that good governance is both the ideal state and the goal that government reform in countries is aiming for, and the guiding principles for the design and operation of the state apparatus, government or system. In recent years, reform of government as well as reform of local government, according to good governance theory in Vietnam, has achieved many outstanding results. This is evident in the improvement in the indicators of provincial governance and public administration (Provincial Governance and Public Administration Performance Index (hereinafter referred to as PAPI)) in Vietnam over the years. Based on the survey results of PAPI in recent years, the article analyzes the good governance level of the local government of Vietnam, offers comments and assessments and proposes solutions on how to increase and strengthen the reform of local government in Vietnam according to good governance theory.