On Innovation and State Capability

Today is my last day as a researcher at the Thailand Development Research Institute, and I wanted to write up some of my thoughts to wrap up my time here.

The year that I spent at TDRI has also been very impactful in shaping how I approach the problems that face Thailand. In particular, I want to share two things that I’ve been thinking about regarding the work I did on Thailand’s competitiveness: the innovation trap and the state capability trap.

The innovation trap

One of my colleagues, Warakorn Awutpanyakul, wrote an excellent piece in the Bangkok Post that recaps the problems facing Thailand’s economy. Overtly dependent on tourism, it is badly in need of restructuring so that innovation can lead the way towards more sustainable economic growth. Yet the government’s support for innovation has been insufficient: expenditure on R&D is lower than in peer countries and indeed declining.

To be sure, restructuring an economy takes time — it can’t happen overnight. The government has tried to move forward with structural reform with a variety of policies and projects. Yet many run into similar traps: insufficient political will and government support, lack of funding. Useful tools like government procurement for innovation remain underutilized. Even something that should play to Thailand’s strengths, such as developing the creative economy, is relatively neglected. The Creative Economy Agency, tasked with supporting efforts to develop the creative industries, for example, receives a laughably small budget.

Meanwhile, Thailand’s education system remains ill-equipped at best for producing a skilled workforce that can drive forward the knowledge economy we need. Lifelong learning is poorly supported. I think often about visiting one of Bangkok’s skills training schools, ostensibly aimed at providing adults with the skills they need to succeed in this economy, and finding out that it teaches fortune-telling classes. A useful thing to know, perhaps, but surely not what quite we are looking for in a labor force we hope will drive an innovative economy.

How, then, might we bring ourselves out of the innovation trap? It is not enough to simply mouth platitudes like “Thailand 4.0.” We cannot simply fool ourselves into thinking the current government programs intended to drive innovation — which exist, to be sure — are sufficient. We need a competent state capable enough to guide Thailand’s economic restructuring. Which brings me to…

The state capability trap

A useful book that I had the chance to read over the past year is Building State Capability by Matt Andrews, Lant Pritchett and Michael Woolcock. “Many states,” they argue, “have skewed capabilities — the capability to routinely and repeatedly propose the three P’s [policies, programs and projects], but not the capability to implement them.” They also find that Thailand has been experiencing a “rapid deterioration in state capability.” Not a cheerful finding!

Indeed, this is often the big stumbling block when working in Thai public policy. It is easy to propose policy recommendations — you can throw in the kitchen sink and say whatever — but when one steps back to consider what is actually within the capability of the Thai bureaucratic system to implement, the possibilities tend to narrow considerably. This problem extends both when thinking about innovation policy and also other policy areas, including Thailand’s responses to pressing emergencies like the coronavirus crisis.

But how can this be fixed? Barbara Geddes (1994) argued that there exists a “politician’s dilemma.” Politicians have conflicting incentives — they could build a bureaucracy that is competent and capable of advancing long-term national interests. However, they could also sustain a clientelistic civil service that can be used for short-term personal and political gain. It is worth asking: what incentives do Thailand’s politicians have for bureaucratic reform?

The common thread with the issues I’ve mentioned: regardless of which political camp ends up in power at the next election, they will face the same structural issues that the current government have been unable to resolve: a society that will get old before it gets rich, unready for many of the transformations that are taking over the world, still stuck with the same sputtering economic engines that are no longer sufficient to propel Thailand into the future. Our political leaders must develop the necessary vision and determination to look beyond short-term political gain in favor of thinking strategically about the long-term challenges facing Thailand. Otherwise, these problems will remain unresolved — until it is too late.

TDRI is an exceptional place, filled with researchers motivated by using evidence-based policy analysis to serve the public good. It is also a very unique organization in Thailand, a country that does not host many think tanks — most would be hard-pressed to name another economics and public policy think tank here. But what makes TDRI particularly special is its status as a genuinely independent research institute. It is not, as many mistakenly think, just another bureaucratic agency, but rather a separate nonprofit that lies outside the reach of Thailand’s powers that be. This makes it both nonpartisan and unsusceptible to political pressure, and thus a remarkably valuable public asset.

Working at TDRI has been an enormous privilege, and I’m immensely grateful to have had the opportunity to work here, alongside brilliant colleagues. I want to once again thank everyone I had the chance to work with for a wonderful one year (and four months!). I’m also particularly grateful to Dr. Saowaruj Rattanakhamfu for her supervision and guidance. For anyone interested in public policy and possessing of a desire to contribute to advancing necessary conversations on Thailand’s economic development, I would heartily recommend working there.

Leave a comment.

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s

This site uses Akismet to reduce spam. Learn how your comment data is processed.