Lessons for avoiding the populist policy trap
Thailand's uneven economic growth over the past several decades has brought about both prosperity and economic disparity. With a level of income inequality comparable to Latin American countries, Thailand is prone to falling into the populist policy trap again.
Labour working in a warehouse where sacks of rice are piled up to hide empty space inside. The military junta wants the next charter to stop populist programmes in the wake of extensive corruption and losses from the rice-pledging scheme. Pongpat Wongyala
By now, it is clear that populist policies, such as the rice-pledging scheme, can be costly and do not contribute to the long-term well-being of the people in any way.
If practice really made perfect, Thailand is second to none in our expertise on charter drafting as we have already written 19 constitutions in 82 years. With a new set of constitution drafters selected, we are ready to draft another "permanent" constitution. As ever, it is hoped the constitution will bring about cures to many chronic problems, including those brought about by populist policies.
Under Section 35(7) of the interim charter, the drafters are required to provide "effective mechanisms to prevent populist policies from causing long-term damage to the economy and the people". While well intended, if followed blindly, this provision may risk taking the country backward for at least two reasons.
First, it is difficult to legally pinpoint a populist policy. This is because there is no clear definition of such a policy, even in reference to the wording used in the interim constitution.
As a result, the Constitutional Court will have to step in to judge whether a policy is populist and thus unconstitutional. The court will thus be drawn in to clash with political parties again.
To decide whether a policy may cause "long-term damage" to the economy and the people is tricky. This is because the consequences of such a policy can sometimes be observed only after its implementation. Therefore, to legally prevent such a policy is almost an impossible job.
Second, to prohibit a political party from campaigning on a certain policy would limit policy choices in the political market. Doing so also limits the right of voters to choose the policies they like.
Thus, using a constitution to guard against a populist policy, judging from its substance, is not only doomed to fail, but will also be undemocratic and likely to create more political conflict.
In my opinion, populist policies should not and cannot be banned. A more achievable and better goal is to discourage them or contain their damage in a democratic manner.
This can be done through the following four steps.
Firstly, the rules governing electoral campaign practices should be modified to make political parties responsible for their proposed policies. In particular, political parties must be required to declare the estimated cost of the policies they are campaigning for, say 30 days before the ballot day. In addition, the sources of funds that will be used to implement the policies must also be declared, be they taxes or loans.
With this, voters will be informed that a policy they like is not a free gift, but something with real cost. Is it not strange that we know the price of a Louis Vuitton bag when going shopping but not that of the rice-pledging scheme when voting?
If the political party is elected to government and tries to implement the policy, it will not be allowed to spend more than the amount declared during the election.
Second, there should be a provision in the constitution that regulates government spending. The provision should state that all government spending must be done through the budgetary process. This is to prevent the use of "off-budget" expenditure, which can be hidden from the public.
As shown with the rice-pledging project, such off-budget items cannot be monitored and regulated by the legislative branch, which is tantamount to abuse of power by the elected executive.
Third, it should be stated in the constitution that there must be a law outlining the framework for fiscal discipline. The framework should include, among other things, a maximum budget deficit in normal times and the ceiling for government debts.
Finally, there should be an independent "Parliamentary Budget Office" (PBO) which is responsible for analysing the budget and the fiscal position. The PBO should report and be accountable to parliament and the general public. This is to ensure that members of parliament and the public have sufficient information to scrutinise the budget bill, other major bills and important policy initiatives.
In addition, there must serious efforts to close the economic disparity gap by providing access to quality education and social welfare to the poor to make sure Thailand does not fall into the populist policy trap again.
Somkiat Tangkitvanich, PhD, is president of the Thailand Development Research Institute (TDRI). Policy analyses from the TDRI appear in the Bangkok Post on alternate Wednesdays.