Economic Development in Post-war Thailand

This paper discusses five aspects of Thailand’s economic performance since World War II: the changing rate of growth and its composition; the sources of that growth; the causes and consequences of the Asian Financial Crisis (AFC) of 1997-99, including the reason it originated in Thailand; the distribution among the Thai population of the fruits of long-term growth; and whether Thailand is caught in a middle-income trap. The evidence from Thailand demolishes the notion that economic growth fails to benefit the poor – provided ‘benefit’ is understood in absolute and not relative terms. It is argued that Thailand is now caught in a ‘middle-income trap’ caused by a backward and under-resourced educational system. Exit is possible, but requires a public commitment to overcoming the under-supply of human capital that a market-based economic system inherently produces and to raising the public revenue needed to finance higher levels of educational investment.