Legislator Incentives in a Fragile Democracy: Evidence From Budget Allocation in Thailand

Abstract

This article investigates if legislators in a fragile democracy share the same local benefit seeking incentives that are observed among politicians in mature democracies. Fledgling democracies are characterized by uncertainty over the survival of democratic institutions, which may discourage elected officials' reelection effort in favor of more direct measures to gain personal payoffs. Analyses of the relationship between legislative representation and the allocation of the budget among Thailand's 76 provinces indicate that Thai legislators are directing government expenditure to their home provinces. This result suggests that politicians' self-serving motives play an important allocation role even in a young, fragile democracy. (JEL D72, H59)

Public Sector Management and Corruption in Asean Plus Six

“…Government expenditure on sectors such as education, health and construction were selected for this study as they had the largest budget allocation in 15 studied countries. The results of the causes of corruption as presented above showed that the significant impacts of government expenditure on health and construction on corruption were supported by the studies of Tanzi (1998) and Kawaura (2011). These findings were also relevant to Mauro (1998), who argued that politicians intended to spend public budget on items that were easy to levy large bribes on but were also hard to reveal.…”

“…In contrast, the impact of education expenditure on corruption was found to be negative in this study that the larger size of the education budget may reduce the levels of corruption. This finding was against the results of Tanzi (1998) and Kawaura (2011). Mauro (1998) stated in his study that there were fewer opportunities for bribery and corruption in the education sector compared to other sectors due to a relatively large number of suppliers for education technology and equipment.…”

“…The first problem examined in this thesis is related to government expenditure. Most of the studies in the examination of the relationship between corruption and government expenditure found that corruption led to a less transparent allocation of the government budget for different sectors , Kawaura 2011, increased expenditure in the military sector (Gupta et al 2001), reduced education and health expenditure (Mauro 1998, Gupta et al 2000, and Delavallade 2006. In contrast, not much research had done on the opposite, that corruption can be influenced by the size of the government spending.…”

“…As per discussion of the research statement in Section 1.2, and revision of the corruption theories in Section 2.2, the hypotheses were proposed to test the correlation between corruption and causal variables, as well as corruption and economic development variables to answer the thesis' research questions. Many empirical studies examined the impact of corruption on government expenditure , Kawaura 2011, Gupta et al 2001, Mauro 1998, Gupta et al 2000and Delavallade 2006), however, not much research had done on the opposite, that corruption could be influenced by the size of the government spending. Besides, in less developed countries, budgets allocated for public sectors such as education, health, and construction were larger than the other sectors (World Bank 2019), while the level of corruption in those countries was also higher than in developed ones.…”

“…Tanzi (1998) examined the factors influencing corruption and found that the allocation of the government budget for different sectors tended to be less transparent. Kawaura's (2011) study of the relationship between legislation and budget allocation found that politicians used their power to direct government expenditure to their home provinces in order to increase the number of votes they collected in the next election. Once the legislators win the next election, they may continue to use their power for corruption.…”