Corruption in the privatization process: the case of the Electricity Generating Authority of Thailand

Abstract

This thesis is an exploratory study of the likelihood of corruption during the (ultimately cancelled) privatization of the Electricity Generating Authority of Thailand (EGAT). It builds on a model used by Manzetti and Blake to investigate the likelihood of corruption in privatization programmes in Latin America. This model has not been applied to an Asian country before. Conditions in Thailand are conductive to a high level of corruption in any privatization scheme. Willingness and opportunity for corrupt action are clearly present because of the strong connections between family business and politics, the high discretionary powers of the executive, the weak checks-and-balances mechanism, and the lack of transparency and accountability. Corruption is likely to have been involved at every point in EGAT's proposed privatization. Among the specific issues discussed in the thesis are the method of privatization, the speed of the process, and the valuation method. While old forms of corruption in the public sector tend to persist, the privatization of a strategic industry offers opportunities for a new kind of corruption that is more aggressive. Systematic high-level of corruption provides interest groups with substantial benefits at the cost of the country. By investigating these matters, this thesis makes a contribution both to our understanding of government-business relations in Thailand, and to the wider economics of corruption in Asia.