Thailand's Hurdle Approach to Budget Reform
2002
Dixon, Geoffrey | Dorotinsky, Bill
The note shows how Thailand's efforts to ease budget controls, can complement efforts to strengthen the capabilities of government agencies. The country's budget reform strategy, while seeking to retain the benefits of tight central control, aims at avoiding its costs, by transferring control over budget details, from the Bureau of the Budget to spending agencies, making them more responsible for managing their budget allocations, and accountable for achieving better results. This approach strengthens agency management, avoids corruption, and provides incentives for agencies to improve their management, rewarded by increased financial autonomy. However, such approach increases the risk of stalled budget reform, if agencies prolong the approach standards, or if agencies are reluctant to agree to an understanding. Although Thailand's budget reform is not yet finalized, lessons indicate the need for stronger political will, since bureaucracy in the country, enjoys far more power relative to the executive, than in many other countries; the complexity of the Thai budget reform approach could have been simplified, by increasing awareness of the need for good financial management, and by a computer-based accounting system that would meet basic financial control, and reporting standards; and, that inputs from international consultants should have been integrated with budget reform efforts.
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