This paper attempts to test the validity of public welfare spending theories (compensation theory, system theory, median voter theory, group theory, Incrementalism and some variants of public choice theory) in the context of Thailand. The study make use of GDP, previous welfare spending, increases in population, tax revenue, openness to trade, democratic government, labour union, trade association, urbanisation and welfare spending as a share of GDP over the period 1982 – 2007. We found strong and positive link between globalisation, GDP, tax revenue, labour union and previous welfare spending with Thailand welfare spending. These increases will invariably call for increased access to education, health care systems and other related welfare spending which means, the revenue base has to be increased through tax. We therefore recommend Thai Government to undertake reform in the tax system to broaden the tax net. Also, land and property tax systems ought to be reformed as well to extend coverage. We also recommend the stimulation of domestic demand in Thailand to reduce the over reliance on the international market which exposes countries to high end risks and uncertainties. The falling population growth in Thailand could also spell a doom to Thai’s labour supply. Thailand currently relies on immigrant workers from neigbouring countries like Myanmar, Laos, Vietnam and Burma. As the economic conditions in these countries improve, these immigrant workers might return. This will create a shortage in the supply needs to cater for the ever increasing demand propelled by the continuous industralisation of the Thai economy. Policy decision makers should factor this in their subsequent decision to mitigate this effect in the near future.
Table of Contents
1. Introduction
2. Research Questions
2.1 Research Objectives
3. Literature Review
4. Conceptual Framework
4.1 Hypothesis Testing
5. Research Methodology
5.1 Data Collection
5.2 Model Specification and Data Analysis
6. Empirical Results
7. Policy Recommendation
Research Objectives and Topics
This study aims to examine the determinants of government social welfare spending in Thailand between 1982 and 2007 by testing the validity of established economic theories, such as Wagner's Law, public choice theory, and compensation theory, to provide empirical evidence for policy reform.
- Factors influencing the growth of public welfare spending.
- Testing the validity of social welfare spending theories in the Thai context.
- The impact of globalization and trade openness on public expenditures.
- The role of interest groups, specifically labour unions, in shaping welfare policies.
- Assessment of economic inequality and its relationship with social spending.
- Policy recommendations for sustainable tax and welfare system reforms.
Excerpt from the Book
1. Introduction
Government’s role over the past decades has been to create an enabling environment with equal opportunities to all to ensure equity in all facet of life. Opponents of government direct involvement with market have always had the belief in the self- correcting mechanism of the market towards equilibrium position. However, such believe in sole mechanism of the forces of demand and supply in the market has not worked to perfection, hence the inevitable involvement of government in correcting the market inefficiency. Welfare spending on education, health, unemployment and other social transfers are some of the means government uses in forestalling confidence in the economy and to bridge the gap between the rich and the poor.
Summary of Chapters
1. Introduction: Introduces the role of government in market economies and presents the core motivation for investigating welfare spending in Thailand.
2. Research Questions: Outlines the primary inquiries regarding factors affecting welfare spending and provides the specific research objectives for the study.
3. Literature Review: Explores theoretical foundations including demand and supply side theories, Wagner’s law, public choice, interest group, and compensation theories.
4. Conceptual Framework: Defines the variables used in the study and establishes the hypotheses to be tested regarding welfare spending relationships.
5. Research Methodology: Details the approach to data collection and the specification of regression models used to analyze the factors affecting welfare spending.
6. Empirical Results: Presents the findings from the multiple regression models and discusses the statistical significance of the various economic variables.
7. Policy Recommendation: Offers practical suggestions for the Thai government regarding tax reform, domestic demand stimulation, and future planning for labor supply.
Keywords
Welfare Spending, Thailand, Public Welfare spending theories, GDP, Tax Revenue, Globalisation, Labour Unions, Inequality, Compensation Theory, Fiscal Illusion, Incrementalism, Political Business Cycle, Economic Growth, Social Policy, Trade Openness.
Frequently Asked Questions
What is the primary focus of this research?
The research investigates the determinants of government social welfare spending in Thailand from 1982 to 2007, testing whether various economic theories hold true in the Thai economic context.
What theories are examined in the study?
The study examines several theories, including Wagner's Law, the Median Voter theory, Interest Group theory, Compensation theory, Fiscal Illusion theory, and Incrementalism.
What is the main objective of the research?
The primary objectives are to identify the drivers of government welfare spending growth, validate specific economic theories using Thai data, and provide evidence-based policy recommendations.
What methodology is employed to analyze the data?
The author uses multiple regression analysis on secondary data gathered for the period 1982-2007, preceded by a correlation matrix to check for multicollinearity.
What does the main body of the work cover?
The main body covers a comprehensive literature review, the development of a conceptual framework, detailed model specifications, and a discussion of empirical regression results.
Which keywords characterize this paper?
The paper is characterized by terms such as Welfare Spending, Thailand, Globalisation, Labour Unions, GDP, and Public Welfare spending theories.
How does globalization affect Thai social spending according to the results?
The results indicate that globalization, proxied by trade openness, has a statistically significant positive relationship with welfare spending, as the government increases expenditures to support sectors affected by market fluctuations.
What did the study find regarding the influence of labour unions?
The study found a statistically positive relationship between the number of labour unions and welfare spending, supporting the Interest Group theory regarding the influence of such organizations on policy.
What is the significance of the "One year lagged welfare expenditure" variable?
This variable serves to test the Incrementalism theory, which suggests that current spending is largely a continuation of past spending; the results showed this to be a highly significant predictor.
Why are tax system reforms recommended for Thailand?
Reforms are recommended to broaden the income tax base and modernize land and property taxes, which would provide the necessary revenue to meet the growing demands for education and healthcare.
- Arbeit zitieren
- Joseph Ato Forson (Autor:in), 2013, The Distributional Effect of Social Welfare Spending in an Economy: Evidence from Thailand, München, GRIN Verlag, https://www.grin.com/document/210953
