Thai Public Capital Budget and Management Process

Thai Public Capital Budget and Management Process

Arwiphawee Srithongrung (University of Illinois at Springfield, USA) and Kenneth A. Kriz (University of Illinois at Springfield, USA)
Copyright: © 2019 |Pages: 30
DOI: 10.4018/978-1-5225-7329-6.ch010

Abstract

This chapter describes the public capital budgeting process in Thailand. Public infrastructure is very centralized; local governments do not play a large role in public infrastructure investment. The country's long-term physical planning is fragmented and lacks an effective long-term fiscal planning. The budget process is dominated by senior civil servants in the Bureau of the Budget, the Ministry of Finance, Bank of Thailand, and the National Economic and Social Development Board. Expensive projects financed by long-term debt bypass the budget process, and as a result, a comprehensive list of annually approved projects is unavailable to the public. This leads to public investment being driven almost entirely by debt capacity. Because of these factors, Thai governments have invested too little in public infrastructure, and the infrastructure investment is uneven across sectors.
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Introduction

This chapter describes the public capital management and budgeting process in Thailand along with the country’s social, legal, economic, and public administration institutions. Thailand is an emerging economy in Southeast Asia. At one time, it was a relatively poor country by international standards. But from the 1960s to the late 2000s, it grew rapidly. Along with the strong economic growth, the country’s public infrastructure system demands also grew, especially for urban transit systems. Public infrastructure quality and quantity are significant factors contributing to growth (Srithongrung & Kriz, 2012). Therefore, it is imperative to develop an understanding of Thai public capital management and budgeting processes. The goal of these processes is to acquire public infrastructure in the most efficient and effective manner (Srithongrung, 2008).

This chapter is comprised of five sections. The first section describes the country’s socio-economic and demographic characteristics along with the structure of its public administration. The local government’s institutional arrangement is also discussed given that Thailand has been attempting to make basic public infrastructure (e.g., local road and water services) available at the local level since the 1999 Decentralization Act was enacted (Chardchawan, 2006, 2010; Krueathep, 2010). The second section provides an overview of the country’s public infrastructure systems along with an objective evaluation drawn from the international public capital literature and analysis of secondary data. The third section describes the four main components of the Thai public capital management and budgeting process: planning, budgeting and financing, execution, and evaluation. The fourth section evaluates whether the Thai processes adhere to the normative framework set forth in the introduction to this volume and identifies the strengths and weaknesses of the process. This section also provides critical analysis of the linkages between the capital management and budgeting processes and the quality and quantity of public infrastructure delivered to the public. The last section concludes with observations regarding the processes and future propositions for the relationship among institutions, management processes, and outcomes.

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