LEGISLATOR INCENTIVES IN A FRAGILE DEMOCRACY: EVIDENCE FROM BUDGET ALLOCATION IN THAILAND

Abstract

I. INTRODUCTION The legislature in many representative democracies comprises politicians that represent geographically specified constituencies. These legislators are concerned with their reelection prospects and make efforts to direct government budget allocation to their home constituencies in order to increase the number of votes they collect in the next election. There is a rich body of literature that has investigated this relationship in mature democracies. Atlas et al. (1995), Meyer and Naka (1999), and Kawaura (2003), for example, confirm that the geographical distribution of government expenditure reflects legislative representation of regional units such as U.S. states and Japanese prefectures. The objective of this article is to examine if legislators in a fragile democracy share the same incentives with their counterparts in mature democracies. This inquiry is important because uncertainty over the survival of democracy may affect their allocation of time and effort. Although the public choice aspect of government policies, including the self-serving behavior of politicians, has entered the domain of empirical research on developing democracies, an inquiry into the geographical budget allocation and legislative representation has been lacking due mainly to data limitation. (1) This article tries to fill the gap by conducting an analysis of Thailand's government budget for the fiscal years 2000-2006. This research, combined with studies from developed democracies, will contribute to a greater insight into the differences and similarities of the political elements in public resources allocation between mature and fledgling democracies. The rest of the article is organized as follows. Section II discusses different incentives that potentially characterize incumbent legislators in a fragile democracy. Section III offers a brief constitutional history of Thailand together with its legislative and electoral systems. It also reviews literature on the role of politicians in budget formulation in Thailand. Section IV gives an overview of budget allocation in Thailand among its provinces, and Section V reports the results of regression analyses and discusses their implications. The concluding section suggests topics for further research. II. LEGISLATOR INCENTIVES IN A FRAGILE DEMOCRACY In a fragile democracy, legislator incentives could deviate from the ones facing their counterparts in mature industrial democracies, as variables that enter their cost-benefit calculations could be different both in magnitude and nature. A divergence between mature and young democracies arises with respect to the faith in the continuity of democratic institutions. In a country where the military has frequently intervened in politics, for example, elected officials may not take it for granted that they will complete their term and that there will be the next round of elections. This would affect their behavior through discounting of payoffs that can be derived from assisting their constituencies, as those payoffs would materialize only in the event that democratic institutions are sustained. Thus, they may substitute local benefit seeking with activities that would bring them direct benefits in the short run. One means for legislators to obtain personal payoffs is to intervene in the operation of the government's executive branch for the benefit of private interests, which could constitute corruption depending on the interpretation of the law. (2) To the extent that democracy nurtures rule of law, this potential for corruption is greater in young, fledgling democracies. (3) This would in turn reduce legislator incentives for assisting their constituencies. Politicians in developing democracies may also find it a viable option to engage in buying votes at the time of elections. This opportunity would allow them to further discount the value of serving their constituencies through budget allocation. …