The Politics of Economic Reform in Thailand: Crisis and Compromise

Abstract

What explains the varying responses by Thai governments to changes in the international economic environment over time. To answer this the paper emphasizes the link between the nature of the political structure/policymaking environment and the government's reform capacity. Thailand's political structure typically undercuts the government's reform capacity in two way. First, it is difficult to get needed reforms on the political agenda. Second, it is even harder to push reforms through the policy process to implementation. During the 1980s, Thailand was able to overcome some of the challenges inherent in its political system via an informal compromise between party politicians and technocratic reformers. This 'pork-policy compromise' gave the government the capacity to adopt certain reforms - reforms that laid the foundation for the economic boom of the late 1980s and early 1990s. Changes in the political structure in the late 1980s brought an end to this compromise, thereby reducing the government's reform capacity.

Keywords: Thailand, reform, political economy, capacity

JEL Classification: H1, H3, H4