Dynamics of poverty, inequality and Thai government provincial budget allocation

Abstract

This dissertation examines the impact of government budget allocation (all inper capita unit) to inequality and poverty by single household level covered in 75provinces. The study is based on in-depth analysis the dynamic of governmentexpenditures and other factors such as inflation, gross provincial product (GPP) andunemployment to the two main welfare indicators (inequality and poverty). The studyapplied panel data analysis in provincial level. The study result shows thatgovernment budget allocations per capita from each ministry can alleviate theinequality in some extent; likewise can also reduce the poverty rate. Also if consideron other factors, higher inflation in Thailand leads to a higher inequality. In addition,this study is exploring the analysis on the special program that invested in eachspecific province whether it is able to alleviate the inequality and poverty or not. Theresults show some specific program is worthwhile to invest but some is in doubt

However, as changes in inequality and poverty are not purely the effect ofthese special programmes, then cannot conclude that some of the selectiveprogrammes are not effective tools. This might be because other factors had a bignegative influence in those particular provinces, so these programs alone could notimprove income distribution and lower poverty rates. Even if inequality and povertywas improved, still cannot conclude that this was purely from these specialprogramme; other factors might support this outcome. According to this, this studycan be a guidance for Thai government should study more in a depth detail which kind and which source of government expenditure should be focused more to investas to relieve the inequality and poverty.