Problems of Local Public Finance in Thailand

Abstract

This study aims to explore the local public finance problems in Thailand. Data were collected from four groups: government officials, experts, local politicians, and local government officials. In addition, data from local budget allocation documents were also analyzed. Results indicate that local administrative organizations face five main problems. The first problem is the structure of local revenue as the proportion of revenue from each source does not reflect local fiscal self reliance and fiscal autonomy. Second, many laws on local fiscal issues are still outdated and there is no clear legislation regarding revenue source for local administrative organizations. In addition, there are problems with regulations and methods for generating new revenue sources. Third, there are problems resulting from the local administrative organizations’ inability to develop their fiscal system, such as problems with the management system, local staff, and taxpayers. Fourth, there is the problem of budget allocation, especially with regard to the system of intergovernmental grant allocation which does not have mechanisms to ensure fiscal equality. Furthermore, the allocation is often delayed, unpredictable and, for specific grants, susceptible to political intervention. The last problem is budget setting as there is a lack of content-rich public participation in local budgeting process and little diversity in the participation method, as well as shortcomings in the budget auditing process of local administrative organizations.