Politics and the price of rice in Thailand: Public choice, institutional change and rural subsidies

In: Research Collection School of Social Sciences

Abstract

Despite the Thai state's long record of rice market interventions, historically politicians failed to leverage rice subsidies in their pursuit of political support, notwithstanding the large number of farmers in the country. Since Thaksin Shinawatra's election in 2001, though, each government has subsidised rice producers, although at varying degrees. What explains this change? This article traces the four-decade history of rice price support programmes. It is proposed that these policies be interpreted through the dual lens of institutionalism and public choice theory, demonstrating how political institutions have shaped incentives for politicians to cater to different constituencies. During the pre-1980 period, under authoritarian regimes, Thai leaders applied rice price policies to benefit urban consumers and the government. From 1979 through 2000, following implementation of the block-vote system, rice interventions were used to appeal to voting intermediaries like rice millers, as bargaining chips among competing parties and as stopgap measures to diffuse farmer protests. Since 2001, responding to the electoral system created by the 1997 constitution, politicians have appealed directly to the voting public, seeking broad-based support via subsidies. The analysis highlights the impact that shifting institutional incentives have on politicians' actions and thus the emergent policies.