Fiscal decentralisation and governance in Thailand

Abstract

This chapter studies expenditure assignment, revenue assignment and the debt of local governments in Thailand. The distribution of local expenditures and revenue among jurisdictions in 2017 are analysed by applying the Gini index and Lorenz curve. The study shows that the governmental functions that have the most unequal distribution of local expenditure per capita among local governments are agriculture, domestic peace maintenance and commerce. The least unequal distribution of local expenditure per capita is in general administration, central budget and education. Thai local governments collect a very small proportion of their budgets themselves, with around eight percent of their budgets coming from local sources of revenue. This study suggests that the shared revenue and grants are good instruments to reduce the disparity of local governments’ revenue. Moreover, government functions should be defined more clearly, identifying which functions are solely provided by the central government and which functions should be jointly provided by the central government and local governments.