Thailand economic progress and the move to populism1
Abstract
Thailand is unusual among middle-income developing countries in several respects. The crisis operated through Thailand's overextended financial system and produced a serious economic contraction. The crisis eroded some of the gains from the economic growth that had been achieved during the long period of economic expansion, but it did not erase them. A growth accounting framework, which focuses on the determinants of aggregate supply, is therefore of limited relevance for such periods. The analysis decomposes the aggregate productivity growth component just described into one component due to growth in productivity in individual sectors, each weighted by its share of gross domestic product, and a second component due to the reallocation of resources among sectors of differing total factor productivity. Moderately rapid growth from 1962 to 1981 coincided with steadily declining poverty incidence. Despite the genuine problems, evidence can be advanced for substantial social progress accompanying Thailand's economic growth.