Municipal Responses to Fiscal Austerity: The Thai Case

Weerasak Krueathep

International Journal of Public Administration, 2013, vol. 36, issue 7, 453-468

Abstract: This article discusses the use and determinants of fiscal retrenchment strategies of Thai municipalities during the FY 2009/2010 economic downturn. Based on a survey of over 900 municipalities, the author finds that Thai municipal government did not prepare itself for a declining economy. It mainly employed short-term strategies by cutting down line-item and miscellaneous spending rather than utilizing more fiscally sustained schemes such as increasing the revenue from untapped resources or applying more stringent budgetary control measures. Reasons for the fiscal adaptation were several but mainly stemmed from the declining fiscal conditions during the recession as exhibited by fund balance ratio and debt service payment. The findings indicate that Thai municipalities are running at fiscal risk due to inadequate preparation for economic fluctuation and suggest that a local fiscal surveillance system be put in place.

Date: 2013
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DOI: 10.1080/01900692.2013.772631

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