Control and Rent-Seeking: The Role of the State in the Thai Cassava Industry

Abstract: What we can conclude from this study is that the state and the market are not perfect substitutes in allocating resources and sustaining economic development separately. The case of the Thai cassava industry seems to suggest that the Thai state is not benevolent, but predatory in nature. The central point is that the Thai state cannot be simply seen as weak and predatory without understanding the dysfunction of the Thai institutions. Both formal and informal institutions in Thai society have been playing a significant role in shaping the economic policy choice. The case of the cassava industry shows that the administrative law is the main legal system empowering the elected politicians and government bureaucrats to administer the country. This path-dependency has allowed élite groups to easily abuse power without being checked by the legislative and judicial systems like in other developed countries. Since the middle of the 1970s, the Thai political economy has been seen as semi-democratic. However, the roles of vested-interest groups and other non-government groups have been growing, but they are limited by the fact that the country has been ruled by the administrative law.