Effect of Decentralization Strategy on Macroeconomic Stability in Thailand
Lao-Araya, Kanokpan | August 2002
Abstract
"This research study examines how the Thai central government can finance decentralization and make local governments accountable for their own finances. The Thai government’s medium-term fiscal stance is not conducive to planned fiscal decentralization, and local governments will not immediately assume responsibility for providing public services previously provided by the central government. This study proposes that the central government must improve revenue collection efficiency without hindering economic growth by gradually increasing the value added tax rate over the medium term. Thailand has adopted an unbalanced approach to fiscal decentralization. Local governments are guaranteed revenue from transfers from the central government but need not assume increased responsibility for providing public services. This encourages local authorities to spend irresponsibly in expectation of bailouts by the central government. This study recommends that the Thai central government impose hard budget constraints on local governments."
Citation
Lao-Araya, Kanokpan. 2002. Effect of Decentralization Strategy on Macroeconomic Stability in Thailand. © Asian Development Bank. http://hdl.handle.net/11540/2044. License: CC BY 3.0 IGO.ISSN
1655-5252
Keywords
Macroeconomic
Macroeconomic Analysis
Macroeconomic Framework
Macroeconomic Models
Macroeconomic Performance
Macroeconomic Planning
Macroeconomic Policies
Macroeconomic Reform
Macroeconomic Stabilization
Social condition
Economic dependence
Economic assistance
International monetary relations
International monetary relations
International trade
National accounting
Market
Exchange
Comparative economics
Index number
Monetary policy
Value analysis
Adjustment cost
Transaction cost
Conditionality
International relations
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Citable URI
http://hdl.handle.net/11540/2044Metadata
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