Political economy of Thai political pathologies

I.

The Thai military coup of May 2014 has had a number of well-publicized, negative consequences. It has restricted civil liberties; it has weakened Thailand’s position as a stable investment site and thus source of employment and foreign exchange; and it has been a blow to Thailand’s position as a force within ASEAN for regional economic integration and (at least potential) geopolitical problem solving.

Less attention has been devoted to a longer-term and very significant cost of the coup: It is likely to strengthen obstacles to the organization of stable, independent, socio-economic interest groups (“interest articulators” in political science jargon). As such, it further undermines the potential for habits of compromise and the likelihood of programmatic parties. Both of these are important ingredients for consolidated democracy and I believe, for sustained, inclusive development, including the ability to grow out of middle-income status. The absence of such habits was, of course, an important source of the coup itself. Indeed, others have pointed to polarization and the failure of to establish a democratic culture among Thai elites as a key source of Thai coups more generally.[1]

My argument, and it is both pessimistic and speculative, is that this “elite coup culture” has structural roots encouraged by Thailand’s globalized development trajectory. A useful starting point is Pasuk and Baker’s contention that Thailand’s increasingly turbulent politics of the past few years results from a gap between the lag between the development of Thailand’s political system and “a big social transformation driven by a quarter century of rapid economic growth.”[2] This view is especially useful in at least two ways: It goes beyond more static and ahistorical views of coups by emphasizing the significant changes in Thailand’s economy and society. And, consistent with recent writings on development, it implies the need for political institutions, including parties, for resolving collective action problems in the realms of political conflict and economic policies.[3]

But this perspective is incomplete and, as a result, overly optimistic. It implies that Thailand is going through a process experienced by other countries and that, given enough time, the conflicts will be resolved:

All societies go through similar transitions. After World War I, European countries had to recognize the demands of working classes whose status had been changed by the war. From the 1950s, the US had to respond to new demands from the black population. Such movements often face fierce opposition, and take a long time to be resolved.[4]

This perspective makes an unjustified assumption about collective action common to many studies of democratization. It assumes that societal actors, broad interest groups such as business, farmers, labor and aggrieved minority populations, can actually get sufficiently organized to articulate their views, to foster the growth of parties to aggregate those views, and in doing so to foster habits of compromise and norms of democracy – the new social contract that Marc Saxer articulated in his recent New Mandala post. My impression is that there is not, at this point, such high levels of collective action in Thailand; and my argument is that this state of affairs constitutes a major obstacle to a new social contract.

In the rest of this essay, I want first to offer initial support for the view that interest groups are underdeveloped in Thailand. I then want to trace this state of affairs not to some Thai (or Sino-Thai) cultural antipathy to organizations, but rather to Thailand’s economic development trajectory. Finally, I want to suggest implications of my argument for political and economic development.

II.

At first glance, the contention that Thai interest groups are weakly developed is ludicrous. Work by Anek Laothamatat and others alerted us to the growth of business associations, ranging from the Federation of Thai Industries at national and provincial levels, to the Thai Bankers’ Association, to the Thai Chamber of Commerce, to a wide range of sectoral associations. These groups have been continually engaged in proposing policies and arguing their positions, often in close consultation with government officials. At the other end of the socio-economic spectrum, we see frequent protests by groups of Thai farmers in products ranging from rice, to sugar, to rubber. Thai farmers are clearly active.

Nevertheless, my sense is that several factors render the Thai interest group landscape quite thin. First, Thai business associations, especially the peaks, are weakened by the lack of engagement of the multinationals who dominate several of Thailand’s key export industries (e.g. automobiles, electronics, tires). MNCs are, of course, members. But they can often resolve problems, such as technical training, “in-house.” And on issues that do require engagement with public officials, they have alternative ways of making their views felt, such as going right to the Board of Investments. Such direct engagement with the state is often more efficient than the complex negotiations among firms of different sizes and value chain positions required to come out with a common associational perspective.

Second, popular sectors are organizationally weak. Although Thai farmers are often active, their foci tend to be product-, time- and place-specific. If there is a national farmers’ federation, its visibility and impact are significantly inferior to those of sector-specific components. Especially striking, of course, is the fact that Thai labor has little organizational presence or clout. These weaknesses contribute to the absence of broader peak associations able to mobilize, reconcile, and articulate and the interests of Thailand’s popular sectors. They also leave these sectors vulnerable to what were, at one level, programmatic appeals of Thaksin and the Thai Rak Thai party, but were more basically an astute form of redistributive politics based on personalistic appeals rather than a strengthening of the bureaucracy and support for autonomous interest groups. Further, I believe that they contribute to a particular form of political instability, what Dan Slater has called “democratic careening,” in which Thailand’s political system bounces between “vertical,” appeals to popular sectors (Thaksin) and more “horizontal” efforts by the traditional oligarchy to reign in leaders allegedly accountable to the masses.[5]

III.

But if Pasuk and Baker are correct, this “political immaturity” should correct itself as average Thais, whose incomes are now three times higher than 30 years ago, become more aware, active and organized. I hope this is the case, but I’m skeptical, and my skepticism is rooted in a belief that Thailand’s development trajectory itself has and will continue to impede collective action by business, labor, and farmers.

With regard to business, Thailand’s development strategy, adopted by almost all Thai governments and intensified after the 1997 crisis, has been to foster an export-led, multinational-dominated assembly base in manufacturing, reserving much of the service and agricultural sectors for Thai capital. [6] Services tend to be oriented toward the domestic market and, to a greater extent than in manufacturing, benefit from “natural” as well as legally derived protection such as licensing and concession arrangements. The strength of Thai firms in agriculture and agro-processing is, of course, a reflection of Thailand’s comparative advantage. But, apart from areas such as rubber-based products (e.g. tires, condoms, gloves), where foreign firms draw on domestic inputs, there is little need to coordinate and reconcile interests. Indeed, the broader point is that strategy- and policy-influenced divisions within the business world weaken the need or potential for coordination and broad interest aggregation.

Andrew Walker’s work on Thailand’s Political Peasants identifies one factor contributing to the lack of broad interest group activity on the part of the country’s farmers: the Thai state’s top-down, project-based approach to rural development, an approach that has in fact helped to raise rural incomes. As suggested by his book’s title, Walker is not proposing that Thai farmers are apolitical. But he is, I believe, arguing that their politics are constrained by their focus on state “projects.” Although these projects certainly involve politics in the sense of strategic efforts to fashion and obtain project-based resources, these efforts tend to be both local and focused on obtaining particular state resources. They do not translate into stable organizational forms designed to make broad claims on policies and to bargain with other interest groups over these claims.

Walker and others highlight a second factor that undermines broad farmer organization: high levels of rural-urban migration. But this isn’t the one-way process leading to the so-called “Lewis turning point” in which a steady stream of people from the rural, informal sector would flow into the formal, urban industrial world, leading eventually to mechanization of agriculture and, when the rural labor supply is depleted, higher wages for urban workers. It is instead often a two-way process in which workers shift among urban employment and periodically leave to return to the countryside. The result is a rural workforce accounting for roughly 39% of the total workforce,[7] much larger than agriculture’s contribution to the overall economy. Rural areas thus become not just a source of labor for the cities but also a “labor sink,” bolstered by state agricultural support programs, for people unable to find permanent, decent-paying work in the urban, formal sector. Indeed, the urban workforce has a very large, even dominant, informal component, with up to two-thirds of the labor force estimated to work in the informal sector.[8] Such unstable work situations are unlikely to encourage the kinds of collective identification and activities required for broad interest group activity.

That leaves the question of why Thailand’s impressive industrial growth has not resulted in a stable, industrial workforce with the potential for organizational and political clout. Part of the answer involves anti-union measures by the Thai state ranging from malign indifference to outright repression. Another part has to do with the option to return to the countryside, noted above. But another factor is Thailand’s access to and continued reliance on migrant labor, including in the automotive and electronics industries, as well as in rubber and food. Such reliance further encourages informality and reduces incentives to promote technical skills and to engage with organized labor to develop such programs.

This overall move to informality is obviously not limited to Thailand. And indeed, the Thai economy may be experiencing another emerging phenomenon, what Dani Rodrik has labeled “premature deindustrialization.”[9] This refers to the tendency of the share of manufacturing employment in most of today’s developing countries to decline much more rapidly than was the case in the rich countries. More workers in countries such as Thailand are moving into the informal economy and/or services, sectors less fertile for stable identities and organization.

IV.

Rodrik’s speculation on the social and political consequences of this phenomenon inform my own concerns:

Some of the building blocks of durable democracy have been byproducts of sustained industrialization: an organized labor movement, disciplined political parties, and political competition organized around a right-left axis. The habits of compromise and moderation have grown out of a history of workplace struggles between labor and capital – struggles that played out largely on the manufacturing shop floor. Given premature deinsutrialization, today’s developing countries will have to travel different, as yet unknown, and possibly bumpier paths to democracy and good governance.[10]

These conditions also constitute potential obstacles to Thailand’s ability to avoid the “middle-income trap.” The requirements for moving beyond middle-income status are fairly well known: reducing heavy reliance on exports and labor-intensive assembly and improving the ability of workers and firms to absorb, adapt and disseminate technology. These in turn require better education and training, more effective R&D, improved infrastructure, and less reliance on inefficient populist policies. However, good policies require good institutions in both the public and private sector. But institution building in Thailand is difficult due to what might be called the country’s “disarticulated” nature: The economy is split between local and foreign firms, between formal and informal workers, between urban and rural interests, and between upstream and downstream firms; income inequality has grown; and society lacks stable, broad interest groups capable of pooling the costs and gains from investments in things like education and training. And, of course, economic problems feed back into political dysfunction; production politics affect state politics. Ending Thailand’s political turbulence requires addressing the economic – and social — sources of those pathologies.

Rick Doner is the Goodrich C. White Professor of Political Science at Emory University

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