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Executive

Summary

This research project is set for two modest objectives: The first, to
empirically investigate economies of scale for local governance in
Thailand. Our units of analysis refer to 7,775 units of municipality and
subdistrict administrative organization. First, we pool secondary data
from different government agencies that are responsible for supervision
of local administration. Second, we define terminology and specify the
important variables that reflect the unit cost of local public goods for
further hypothesis testing. Their unit costs are assumed to be
nonlinearly related to the size of local administration (proxied by,
population). Specifically, three hypotheses are stipulated as follow: H1:
The unit costs for small-sized municipalities and SAOs tend to be very
high which partly reflects inefficient utilization of resources and
diseconomies-of-scale; the unit costs for the moderate-sized local
administration tend to be significantly lowered than the small-sized units
which may be a combination of an increasing return to scale and the
fixed cost; H2: Once the scale of local administration exceeds a certain
level (i.e., the minimum unit cost) their unit costs tend to increase which
could be inferred that they are operating in the range of diseconomies-
of-scale. H3: The proposal to amalgamate small-sized local
administration may be theoretically sound and reasonable—but it could
be opposed by many parties who are adversely affected from the policy
reform. From field survey we realize that there are potential losers from
amalgamation: i) the high-ranking officers due to demotion of local

XVI สถาบันพระปกเกล้า