Bad luck or bad budgeting
Creators: name: Krueathep, Weerasak
Publisher: name: No Publisher Supplied
Year: 2010

description: This research examines fiscal conditions in Thai municipal government. It aims to investigate how fiscal conditions vary from one municipality to the next, and what explains the variation. A mixed analytical approach is employed in the current research. First, this research quantitatively applies conventional (U.S.-based) measures of revenue-raising capacity and expenditure needs as developed by Martinez-Vazquez and Boex (1997), Dye (1984), and Ladd and Yinger (1989) to a sample of 14 cities located in the central and eastern regions of Thailand, utilizing FY 2001 – 2006 data. Second, it qualitatively investigates four in-depth cases in order to explain why some cities are fiscally less able to satisfy constituents’ needs. The case analyses are guided by a budgetary roles framework as developed by Wildavsky (1975, 1984) and later expanded by Schick (1980) and Good (2007). The quantitative findings show a sensible picture of Thai municipal fiscal conditions when compared to U.S. cities during the past few decades. Large, highly populous central cities as well as semi-rural, residential areas were fiscally weak. By contrast, industry-based cities were fiscally healthy. Notwithstanding, Thai suburban cities faced relatively poor fiscal conditions. This part of the findings is inconsistent with the literature in that the fiscal conditions of the suburbs are generally strong. Additionally, four extreme cases from each of the city’s socioeconomic characteristics are explored. The four cases utilized demonstrate distinct taxing and spending policies as well as the cities’ political dynamics which underlie local fiscal conditions. In contrast to the fiscally healthy cities’, budget actors in the fiscally weak cities failed to follow designated budget roles. Neither did political executives set policy priorities that fit urgent communal needs, nor did the council sufficiently monitor and safeguard the municipal purse. Furthermore, the role of financial watchdogs was underperformed. Auditors, interest groups, and the media were not yet influential to the point that they could have assisted in making the municipal fiscal administration more transparent and viable. Not only does this study help to extend theoretical frameworks for understanding the fiscal condition variations, the research also provides a foundation for the design of intergovernmental transfer systems that takes into account local fiscal conditions. Stress-relief fiscal transfers can be made available for fiscally distressed cities in order to help eradicate their structural deficits, given that their governance problems have been remedied beforehand. Additionally, improved budgetary roles should be promoted in Thai municipal administration. The council’s roles in safeguarding the municipal purse should be fortified. The capacity building of the cities’ internal audit teams as well as the use of private auditing agencies and external control mechanisms are also essential to the strengthening of local fiscal conditions. Future research should focus on the analysis of multi-governmental level fiscal conditions and on debt financing as a crucial means for elevating the capacity of municipal service provisions.