The relationship between development and governance is a central question in the public administration literature on developing countries. Yet, we still understand little about the gap between urban and rural governance in these nations. Our paper tackles this issue using the novel Vietnam Provincial Governance and Public Administration Performance Index (PAPI). PAPI is Vietnam’s largest nationwide survey, and it is considers six dimensions of local public administration, including participation, transparency, accountability, corruption control, administrative procedures, and public service delivery. Using a small area estimation approach we present three new findings. First, urban citizens report better local governance and public administration than rural citizens do. Second, districts with better reported governance tend to have a smaller urban-rural public administration gap. Third, this gap follows a U-shaped pattern, decreasing initially and then increasing slightly as local living standards rise. These findings have implications for priorities in public administration reforms.