Doshisha University Center for the Study of the Creative Economy
Discussion Paper Series No. 2017-01

Generals in defense of allocation: Coups and military
budget in Thailand

Akihiko Kawaura（Professor, Graduate School of Policy & Management /Faculty of Policy Studies, Doshisha University）

Discussion Paper Series

Generals in defense of allocation: Coups and military budget in Thailand
Akihiko Kawaura
Professor
Graduate School of Policy & Management / Faculty of Policy Studies
Doshisha University

Abstract
This paper investigates the effect of coup d'état on government defense expenditure in
Thailand with 1948-2014 data. Regression analyses of the relationship between the
total and defense budget reveal that coups result in larger defense budget in the year
immediately following the coup. Among the branches of the armed forces, the army
gained in their allocation out of the total defense budget after coups. These results
imply that coup leaders have made use of their acquired executive power to direct
greater budget for the benefits of their organizations.

Keywords:

coup d'état; Thailand; budget

JEL codes:

D72, H56

1. Introduction
Coup d'état is an anomaly in democracy. Coup plotters resort to violence totake control of the government away from the sitting administration. Thistransgression is, however, not necessarily a rare event. Powell and Thyne (2011) reportthat the world saw 457 coup attempts between 1950 and 2010, of which almost half(227) were successful. These coups mainly took place in developing part of the world.
Countries in Africa (169, 37.0%) and Latin America (145, 31.7%) had more than twothirds of the total among them. The rest of the geographical breakdown was 72 in
Middle East (15.8%), 59 in Asia (12.9%) and 12 in Europe (2.6%).
Although coup is a political phenomenon as a forced transfer of political power,
it inevitably affects a broad range of economic variables. Allocation of government
budget is one of them, and recognition of this potential spillover is behind empiricalliterature that investigates coup’s implications on military budgets. A pioneering workof Zuk and Thompson (1982) examined the 1967-1976 military spending patterns of 66
developing countries and found little evidence that military coups accelerate thegrowth of military budgets. More recent inquiry, however, tends to draw the opposite
conclusions. Leon (2014) investigated the same issue with data for 153 countries overthe 1963-1999 period, taking into account the problem of reverse causality between
coups and military spending. Leon observed that successful coups increase militaryspending more than failed attempts and concluded that military stage coups in order toincrease its funding. Bove and Nisticò (2014) also found that a higher degree of
military involvement in policy-making, to which coups are a contributing factor,
increases the probability that the military obtain a larger budget allocation from asample of 135 countries in the 1984-2009 period.
This paper joins these efforts to explore the effect of coups on defense budget.
Its analysis is conducted in the context of a single developing country, which separates
this study from the existing literature that used data from a spectrum of countries.
Thailand provides an opportunity for this quantitative inquiry with its repeatedepisodes of military coups. 1 Findings from its experience would enrich ourunderstandings of coups by adding a new dimension to the literature.
Farrelly (2013) attributes this frequent military interventions in politics to thecountry’s “elite coup culture” which partly arises out of the symbiosis between palaceand military interests.
11The rest of the paper is organized as follows. The next section presents theshare of military spending in the total budget since 1948 in Thailand and lists thecoups that took place in that period. The third and fourth sections describe empiricalanalyses that identify effects of coups both on the total military budget and on army’s
allocation share in the defense budget. The concluding section discusses significance ofthe findings and areas of further research.
2. Defense budget allocation and coup d'état in Thailand
This study is primarily concerned whether coups bring payoffs to the military
in terms of greater budget allocation. The military officers must gain in policy-making
influence after they have seized executive power. If they use this power to direct
greater budget for the benefits of their organizations, the defense allocation share in
the budget should rise. Figure 1 depicts this share for Thailand since fiscal year 1948. 2
It starts at 9.30 percent in 1948. The 1950s and 1960s saw the share generally rising,with sporadic leaps and plunges in the interval, to peak at 20.96 percent in 1973. Since
the 1980s the share exhibits continuous decline, to find a floor at 6.24 percent in 2005.
The share at the end of the sample period is 7.26 percent in 2014.
Thailand experienced 15 coup attempts during these years. 3 There were threefailed plots in 1948, 1949 and 1951, before another 1951 attempt succeeded andabolished the 1949 Constitution to bring back the 1932 Constitution that had granted
more political power to generals in the Cabinet and the National Assembly. The
military staged two more coups in the 1950s, in 1957 and 1958, both led by the samearmy general.4 After the hiatus in the 1960s, the decade of the 1970s witnessed 4 coup
episodes. The 1971 coup was a self-coup by the prime minister who is a former army
officer. Two successful coups in 1976 and 1977, which had one failed attempt between
them, also installed successive army generals to the prime minister’s position.
The year 1948 is selected as the initial point of inquiry because the author judgesthat the country’s post-World War II fiscal management has become relatively stablefrom this year. The total budget in 1946 was larger than in 1945 by more than 80
percent. Even a greater gap is observed between 1947 and 1948. The total allocation in1948 was more than 2.9 times that of 1947. Since then, budget changes over theprevious fiscal year became smaller, remaining within the range of 37.9 percent
increase (1952) and 16.8 percent decrease (1961).
3 Historical coup accounts and its numbers in this section draw from Farrelly (2011),
Baker and Phongpaichit (2005) and Girling (1981).
4 For coups in the 1950s, see Baker and Phongpaichit (2005), pp. 143-148, and Girling(1981), pp. 111-113.
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Figure 1. Defense allocation share in the government budget: 1948-2014

25%

20%

15%

10%

5%

0%
1950

1960

1970

1980

1990

2000

2010

Source: Calculated from total and defense budget figures in National Statistical Office,Statistical Yearbook Thailand, various years.

After two failed attempts in the 1980s, the country did not have a successful
coup until 1991. The civil conflict that followed it had to be finally resolved in 1992 by
the intervention from the King (Baker and Phongpaichit 2005, pp. 243-246). A new,highly democratic constitution was adopted in 1997. In less than a decade’s time,
however, this constitution was abolished by a coup in 2006.5 The military intervened in2014 with yet another coup to oust the elected government. Table 1 presents the list ofnine successful coups mentioned above.
The coups in 1991 and 2006 have been extensively analyzed in the contemporary
literature. Pathmanand (2008) argues that these coups were of different nature; while
the former was a result of friction between factions in the military personnel, theplotters of the latter claimed to have acted to preserve the institution of the monarchy.

5

3

Table 1. Successful coups in Thailand between 1948 and 2014-----------------------------------------------------------------------------------[1950s] 29 November 1951
17 September 1957
20 October 1958
[1970s] 17 November 1971
6 October 1976
20 October 1977
[1990s] 23 February 1991
[2000s] 19 September 2006[2010s] 22 May 2014------------------------------------------------------------------------------------

It has been discussed that military leaders had benefited from coups inThailand. For example, Pathmanand (2008) writes about the 2006 coup that “[T]hecoup has already brought about numerous political and economic payoffs for coup
leaders and coup supporters” (page 136) and lists armed forces personnel that wereappointed on the board of state enterprises after the coup (page 137). Regarding thedefense budget allocation, Nidhiprabha (2015) argues that the budget share of defense
spending rises after the coup and declines after restoration of democracy, which he callsa “military business cycle”. Nidhiprabha mentions Thai government’s proposal topurchase submarines after the 2014 coup as an anecdotal evidence. The next section
presents the empirical analyses of budget data to investigate whether there is astatistical basis to substantiate these statements.
3. Analysis of defense budget share
As was shown in Figure 1, the percentage share of defense allocation had
ranged between 6.24 and 20.96 in the 1948-2014 period. In order to account for thesevariations with reference to coups, determinants of annual changes in the defense
budget are examined through the regression analyses. The dependence variable isDefense_Change, which is the defense budget change over the previous fiscal year. As
the total budget size must influence the defense allocation, its change over thepreceding year enters the regression as an explanatory variable Total_Change. Theirsummary statistics are in Table 2. The mean value of these variables does not differ
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from each other. Both total and defense budget grew at the average annual rate of 1213 percent in the period.

Table 2. Summary statistics: 1949 - 2014----------------------------------------------------------------------------------------------------------------------Variable

Mean

Std. Dev.

Min

Max

----------------------------------------------------------------------------------------------------------------------Defense_Change

0.127

0.188

-0.211

1.110

Total_Change

0.123

0.104

-0.1680.379----------------------------------------------------------------------------------------------------------------------Source: Calculated from total and defense budget figures available in National
Statistical Office, Statistical Yearbook Thailand, various years

The effect of coups is captured by dummy variables for the four fiscal years
since the coup, Coup_Tth-Year (T=0-3), which take the value of unity for thecorresponding years, and zero otherwise. There are nine successful coups in the sample
period, and the years of their occurrence are represented by the dummy, Coup_0th-Year(T=0). There are two cases of coups in successive years (1957/58 and 1976/77), in which
dummies for the post-coup years (T=1-3) start from 1959 and 1978, respectively.
The coefficients of these explanatory variables will be estimated in thefollowing form.
Defense_Change = α+ ∑βT * Coup_Tth-Year+ (γ1 + γ2 * Since80) * Total_Change + ε

Figure 1 shows that the defense allocation began to decline as a share in the total
expenditure in the 1980s. In order to isolate this trend, the coefficient of Total_Change
is allowed to shift for the years after 1980 by the margin of the coefficient of thedummy variable, Since80, which is one for 1980-2014. If there was a structural breakin the relationship between the total and defense budget, the sign of γ2 would be
negative.

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Table 3. Effects of coups on defense budget changes: 1949 - 2014------------------------------------------------------------------------------------------------------------------------Defense_Change

(I)

(II)

(III)

(IV)

------------------------------------------------------------------------------------------------------------------------Coup_Tth-Year
β0
β1-0.025-0.021-0.0200.049(0.48)(0.40)(0.37)(1.33)

0.226 ***

0.230 ***

0.231 ***

0.097 **

(3.61)(3.62)(3.58)(2.22)

0.030

0.032

(0.49)(0.50)

β2
β3

0.011
(0.17)

Total_Change
1.010 ***

1.003 ***

1.006 ***

0.975 ***

(5.42)(5.42)(5.28)(7.87)-0.413 *-0.405 *-0.410 *-0.224(1.80)(1.74)(1.74)(1.52)

F-statistic

13.37

10.61

8.70

19.29

p-value

0.000

0.000

0.000

0.000

Adj. R-squared

0.432

0.425

0.416

0.575

Observations

66

66

66

55

γ1
γ2

------------------------------------------------------------------------------------------------------------------------Note: t-statistics are in parentheses. ***Statistically significant at the 1% level.
**Statistically significant at the 5% level. *Statistically significant at the 10% level.

Regression results are in Table 3. The post-coup dummy is restricted to thefirst year in specification (I), while specifications (II) and (III) include the dummies forthe second and third years. Estimated coefficients for the coup year dummy (β0) are notstatistically significant. Coefficients of the first post-coup year dummy (β1) imply thatthe defense budget jumps by more than 22 percent in the fiscal year following the coupon top of any increase associated with the total budget expansion. Other post-coupdummies for the second and third years (β2 and β3) are not statistically significant, andtheir inclusion lowers the goodness of fit for the regressions in terms of F-statistic and6adjusted R-squared. These results indicate that the coups give rise to a substantiallybigger military budget allocation, and that this budget impact is concentrated in thefiscal year immediately after the coups.
The absence of coup’s effects on the military budget in the coup year itself may
be attributed to the timing of the coups. Thailand’s fiscal year runs from Octoberthrough September (The FY2006, for example, is from October 1, 2005 to September
30, 2006). Table 1 shows that, out of nine successful coups in the sample period, seven
were staged after the second half of September, including October and November. In
these cases it is impossible for coup leaders to change the government outlays in thecoup year’s budget.
The estimated coefficients for the Total_Change variable (γ1) areapproximately one and statistically significant at the 1 percent level in specifications(I) to (III). Coefficient estimates (γ2) of the dummy for the years after 1980 (Since80)
are negative and significant at the 10 percent level, which suggests that a breakoccurred in the relationship between the total and defense budgets in the 1980s. The
total budget change was generally translated into a similar size of the change in the
defense budget until the 1970s. Since the 1980s, the extent of the defense budget
increase fell to about six-tenths of the total budget increase, which is behind thedeclining defense allocation share in the period.
These results are obtained with analyses of the 1949-2014 data. Figure 1
shows that there is a big jump in the defense budget share in 1959 after the 1958 coupfrom 11.36% to 20.39%, which suggests the possibility that the coup’s effects obtained
above is driven by the inclusion of 1959 data. 6 As a sensitivity analysis, coefficients are
estimated after removing data up to 1959 as specification (IV) in Table 3. Although thesize of β1 coefficient becomes smaller, it remains positive and is statistically significant
at the 5 percent level. Coups result in greater budget allocation for the military inThailand.
4. Army’s share in the defense budget
The regression analysis above supports the hypothesis that coups result in
The maximum value (1.110) of the Defense_Change variable shown in Table 2 isobserved for 1959.

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expansion of the military budget. The next question is how this post-coup budget
expansion has affected three branches of the armed forces, i.e. army, navy and air force.
Army has been the dominant force in the history of Thai military. Figure 2 depicts
army’s allocation share in the total defense budget for the 1975-2014 period. 7 Although
it has some fluctuations, the share never fell below 50 percent. The fact that all the
successful coups in the 1948-2014 period were led by the army generals also
corroborates its dominance in the armed forces. 8
Army’s generally dominant position and its leading role in the coup attempts
may be translated into its stronger bargaining power vis-à-vis navy and air force in the
Figure 2. Army’s share in the defense budget: 1975-2014
60%

58%

56%

54%

52%

50%

48%

46%
1975

1980

1985

1990

1995

2000

2005

2010

Source: Calculated from defense budget figures available in National Statistical Office,Statistical Yearbook Thailand, various years.
Note: The 1986 data is not available in the source documents.
7
8

The budget data by the armed force branch is available only from the year 1975.
The navy initiated a coup in June 1951, to be suppressed by the army.
8

2014

post-coup budget allocation. To investigate this issue, changes in army’s defense budget
percentage share over that of the previous year are derived as their annual difference
for the 1975-2014 sample. As is summarized in the top panel of Table 4, it has themean of minus 0.05 percentage point, reflecting the lower share at the end of thesample period (56.74 percent in 2014) compared with the beginning (59.04 in 1975).
The average figure for the three fiscal years immediately following successful coups(T=1) is minus 0.12, which is even lower than the sample average. Coups do notdirectly benefit the army in terms of its budget share among the armed forces in thefirst post-coup year. When post-coup years are extended to include the second and thirdyears, however, average changes in army’s budget share turn positive (0.04 for T=2)
and then become larger (0.17 for T=3).

Table 4. Coups and army’s share in the defense budget: 1976-2014-----------------------------------------------------------------------------------------------------------------[Changes in army’s defense budget share] Post-Coup T Year(s)
Mean

Mean

Mean

All Years (37)

-0.05

-0.05

-0.05

T=1 (3)-0.12

T=2 (6)

0.04

T=3 (9)0.17

Other (34)-0.04

Other (31)-0.07

Other (28)-0.12------------------------------------------------------------------[Difference in changes in army’s defense budget share] Post-Coup T Year(s)
Mean

Mean

Mean

All Years (35)

0.13

0.13

0.13

T=1 (3)0.82

T=2 (6)

0.58

T=3 (9)0.46

Other (32)0.06

Other (29)0.03

Other (26)0.01

t-test for difference in means between Post-Coup T Year(s) and other years
T=1 t-statistic = 1.49 (statically significant at 10 percent level)
T=2 t-statistic = 1.43 (statically significant at 10 percent level)
T=3 t-statistic = 1.36 (statically significant at 10 percent level)-----------------------------------------------------------------------------------------------------------------Note: The sample size of [Changes in army’s defense budget share] is 37, as the army’s
1986 share is not available in the source and changes for 1985-86 and 1986-87 cannot
be calculated. The sample size of [Difference in changes] is further down to 35, as it
cannot be defined at the beginning of the period (for 1976) and for 1988.
9In order to investigate the underlying factors behind this observation, we takethe difference of percentage point changes in army’s defense budget share. Thisdifference represents the shift in the pace or direction of the change in army’s
allocation share. For example, a positive difference would signify three possibilities. In
the phase of rising army’s share, a positive difference indicates that its gain in theshare is accelerating. In the stage of declining share, on the other hand, it means thatthe pace of army’s loss in the share is slowing down. Alternatively, it could mean thatthe army saw a reversal in its share change from decrease to increase. 9 Hence a
positive difference could bring about percentage point changes that expands army’s
defense budget share. The larger the positive value, the more likely the budget share
shifts in army’s favor.
The sample average of this difference is 0.13 as shown in the bottom panel ofTable 4. The sample is then divided whether the year falls in the post-coup periods. The
mean for the first post-coup year (T=1) is 0.82, while the mean for the other years is
0.06. Although the difference of share changes is on average positive for both years, its
mean is larger for the years immediately following coups. A t-test for the difference
between means produces a t-statistic of 1.49, which is statistically significant at the 10
percent level. When post-coup years are extended to incorporate the second and thirdyear (T=2 and 3), the t-test also gives the same result that the mean is statisticallygreater for the post-coup years. They suggest that coups affect the pace or direction of
the change in army’s allocation share in the manner favorable to the army at theexpense of the navy and the air force. This may be driving the changes in army’s
defense allocation share, expressed in the top panel of Table 4, to turn positive in postcoup years (T=2 and 3).
5. Conclusion
The effect of coups on government budget has been a topic of active researchfor empirical analyses. A body of recent literature used data from a broad range ofcountries to find that coups result in greater military budget. This inquiry has
investigates the same issue with data from Thailand. Regression analyses of therelationship between the total and defense budget reveal that coups give rise to larger
budget allocation for the defense purpose in the year immediately following the coup. It
Expressed in the mathematical language, this difference is compared to the second
derivative of the army’s share with respect to year.

910has also been found that the army, which is the dominant force in the Thai military,
gained in their allocation out of the total defense budget after coups.
These results imply that Thai military leaders, once they are successful intheir coup plot, have made use of their acquired executive power to direct greater
budget for the benefits of their organizations, and that the army are best positioned
among the armed forces for this exercise. It requires further investigation, however, toargue that the budget expansion is among their coup objectives before they staged
coups. Leon (2014) reached the conclusion that the military plot coups in order toincrease defense spending after considering alternative explanations. The same careful
examination is necessary before one can argue that coups are a vehicle for the Thai
military to serve their self-interests.
This investigation contributes to the political economy literature in general byproviding additional evidence that decision-makers of public policy have the incentives
to use their power for their advantages. Kawaura (2011) observed that elected
legislators in Thailand are directing budget allocation to their home provinces toincrease their re-election prospect in spite of the fragility of the country’s democratic
institutions. Results from this study complement it by arguing that coup plotters who
do not respect democracy cannot escape the same incentives that affect politicians.

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