¹ A very similar division can be found in Schatz, Sayre P., “Economic Environment and Private Enterprise in West Africa,” The Economic Bulletin (Accra, Ghana), VII (No. 4, 1963), 42–56Google Scholar. He calls our item (2) “difficulties in the economic environment.” Such difficulties are quite familiar to students of underdeveloped countries. In Adreas G. Papandreau's Strategy for Greek Economic Development (Research Monograph Series 1, Athens, Greece, 1962) p. 30, these are listed as follows: “Inadequate infrastructure, technological backwardness and inefficiency, scarcity of market information, widespread monopoly, and extreme inequality in the distribution of wealth.” A related imperfection he mentions is the “lack of reliance on the stability of institutions.” Of course, this list is not exhaustive nor does it apply equally in all countries.

² See, for example, Wolf, Charles Jr., “National Priorities and Development Strategies in Southeast Asia,” and Theodore Morgan, “Economic Planning—Points of Success and Failure,” The Philippine Economic Journal, IV, No. 2 (Second Semester 1965)Google Scholar.

³ For example, Schatz, Sayre P., “Economic Environment,” and Gustav Papanek, “The Development of Entrepreneurship,” American Economic Review, LII (May, 1962), 46–58Google Scholar.

⁴ The relevant aspects are elaborated in Ayal, Eliezer B., “Value Systems and Economic Development in Japan and Thailand,” The Journal of Social Issues, XIX (January, 1963), 35–51CrossRefGoogle Scholar.

⁵ Thailand, National Economic Development Board, National Income Statistics of Thailand, 1964 Edition, p. 94. The year to year changes were erratic, and in 1954 there was even a decline due to bad rice harvests.

⁶ See Table I.

⁷ Some qualifications might be appropriate here. Much of the “upland” (namely nonrice) crops are grown on newly cleared areas in the Northeast. Often, especially in the case of kenaf, they are grown in addition to subsistence rice. However, evidence of interest in increased income should be weighed against contrary evidence. Platenius points out that many farmers are satisfied with the income already gained from a single crop and show little desire for the additional income derivable from growing a second crop. See Platenius, Hans, The North-East of Thailand, Its Problems and Potentialities (Bangkok: National Economic Development Board, October, 1963) pp. 36–37Google Scholar.

⁸ The large increases in rice production during the last two years was largely fortuitous—a result of good weather. But in part it reflects improved water control resulting from the irrigation works started a few years earlier, and a small increase in harvested areas. Therefore, the higher level of rice production can be expected to continue.

⁹ The decline in demand deposits in 1962 was not a reversal of the trend. On the contrary, the reason for it was the abolition of the tax on interest income which caused a major shift from demand deposits to time deposits. This is a clear sign of “rational” response.

¹⁰ Wai, U Tun, “Interest Rates in the Organized Money Markets of Underdeveloped Countries,” International Monetary Fund, Staff Papers, V, No. 2 (August, 1956), 249–250CrossRefGoogle Scholar.

¹¹ According to the 1964 Edition of National Income Statistics of Thailand, p. 120. The readers should be warned, however, that Thailand's capital formation data are not entirely satisfactory and are being revised.

¹² In another paper I develop this argument in a more technical and rigorous way but this is not essential for the present paper.

¹³ This was suggested to me by Dr. Leon A. Mears.

¹⁴ There are no data accurate enough for drawing conclusions concerning the trend, if any, in the terms of trade. It might be pointed out, however, that the benefits due to the expansion of the production of exportables, the foreign exchange gained thereby, and the accruing benefits mentioned in the text would remain valid even if the terms of trade had turned against Thailand.

¹⁵ There are, of course, some exceptions. The most prominent is Mr. Chow Kwan-Yun, a comparatively recent arrival, who has been the driving spirit in a number of new enterprises. The most notable of these are the new Thai Oil Refining Company and the contemplated Kra Canal.

¹⁶ National Income Statistics of Thailand, 1964 Edition, pp. 92–93.

¹⁷ For the data on the European countries see United Nations: Economic Survey of Europe 1959, Chapter V, page 3.

¹⁸ See Peacock, Alan T. and Wiseman, Jack, The Growth of Public Expenditure in the United Kingdom (New York: National Bureau of Economic Research, 1958), Table A-12Google Scholar.

¹⁹ Its share in total gross fixed capital formation averaged about 25 percent during 1957–1962 while its share in total value added was within the range of 11–14 percent.

²⁰ The Thai rice farmers do not pay for water.

²¹ The erection of hydroelectric projects, especially the near completion of the gridding system from the Yanhee Dam, has been increasing the availability and reliability of a power supply. Formerly, firms had to produce their own power at high costs.

²² However, Platenius, in The North-East, pp. 69–70 and 91, expresses doubts whether the costs are significantly reduced by improvements in the conditions of the highway system. He also doubts whether the primitive road system in the Northeast really affects farmers' decisions to grow upland crops or the prices they receive.

²³ For a recent example, see Charles Wolf, Jr., “National Priorities and Development Strategies in Southeast Asia,” mentioned in footnote 2.

²⁴ There were some retractions on such policies, especially around and during World War II.

²⁵ Some would argue that pressure groups make a positive contribution towards economic development. The reader should form his own opinion on this question.