Understanding the Evolution of "Khaki Capital" in Thailand: A Historical Institutionalist Perspective.

• Author: Chambers, Paul

Using the framework of Historical Institutionalism, this article examines the evolution of "khaki capital", or the economic power of military forces, in Thailand, and how the history of Thai khaki capital has been shaped by the contours of Thai civil-military relations. The article argues that the military's financial autonomy and economic power constrain the ability of civilians to control it. A combination of related factors--including Thailand's legacies of authoritarianism, the monarchy's support for the military, the armed forces' ability to maintain its relative cohesion (while civilians remain divided), continuing national emergencies and the use of coups to impede civilian rule--has established a "lock-in" of authoritarian path dependence in Thailand. This, in turn, has allowed the military to maintain its influence over the national economy through the defence budget, land, corporate ownership and shareholdings as well as corporate sinecures.

Keywords: khaki capital, Thailand, military, economy, history.

The military, with its monopoly on violence and important role in protecting the nation, is a powerful institutional actor in any country. It therefore matters to what extent democratic civilian control can be achieved and maintained over it. However, civilian supremacy over the military is difficult if the latter can bankroll themselves outside of, or despite, civilian monitoring and legislative oversight. Civilian control only becomes easier when civilians can control "khaki capital", or the military's economic power and financial levers.

Khaki capital results from the military's ability to influence state budgets in order to distribute financial resources and create pecuniary opportunities for the armed forces to directly or indirectly enhance its dividends institutionally, either at the unit or individual level. Khaki capital possesses formal and informal dimensions. The formal dimension involves "budgetary allocations that are either directly or indirectly budgeted to the armed forces by the legislature", which includes "legal landholdings by the armed forces" and "legal military investments in... businesses [as well as corporate sinecures]", while the informal dimension encompasses "activities that slide on a scale ranging from the semi-legal to the clearly illegal" (these include "military plunder" of the state budget through corruption and "military collusion with criminal interests"). (1) This study focuses on the formal aspects of khaki capital.

The strength of khaki capital, or the military's ability to succeed in its competition with other bureaucratic agencies for economic resources, is often dependent on the preponderance of power that the armed forces wield within the domestic political system: the more the political equilibrium favours the military sector, the more khaki capital the armed forces can possess. However, when a rough balance exists between the two sides, then a tug-of-war over decision-making and resource allocation ensues. In such situations, the military may be tempted to resort to a coup to forcibly enhance or extend their khaki capital.

In Thailand, compared to other domestic institutions, the military is enormously powerful and has significant political and economic clout. According to some assessments, Thailand possesses the eighth strongest military in Asia and the third most powerful among the ten ASEAN member states. (2) It would be easier to explain Thailand's military strength if the country were confronted with significant security threats. However, Thailand's security environment is relatively benign. This study offers an historical evaluation of the economic power of the Thai military, (3) which has evolved into a pivotal political and economic player in a country where democracy and civilian control over the armed forces remains stymied. (4)

This article argues that a combination of factors--including the legacies of authoritarianism, the monarchy's support for the military, the armed forces' ability to maintain its relative cohesion [while civilians remain divided), continuing national emergencies and the use of coups to impede civilian rule--has established a "lock-in" of authoritarian path dependence in Thailand. In blocking any critical path towards democratic civilian control, the military is able to preserve or expand its economic power over time. Today, Thailand's military is a prominent economic actor because it has been able to cultivate its legitimacy as the protector of national security, a leading force for development and the guardian of the monarchy. Moreover, the military has used these tasks to rationalize its need for financial aggrandizement.

This article is organized as follows. The next section discusses the framework of Historical Institutionalism, which contextualizes the path-dependent development of khaki capital in Thailand. Subsequently, the article examines the historical institutionalist evolution of Thai civil-military relations from 1932 to 2021 before analysing the four avenues through which the Thai military has built and entrenched its control over the national economy, namely defence budget, land, corporate ownership and shareholdings, and corporate sinecures. Finally, the article concludes by summarizing the key findings and briefly discusses the future of khaki capital in Thailand.

Historical Institutionalism as an Approach to Understanding Thai Khaki Capital

This study applies Historical Institutionalism (HI) to understand the development of khaki capital in Thailand. It is a useful framework because HI provides insights into the evolution of political institutions, including civil-military relations. (5) The idea underlying HI is that change comes about as a result of alterations in the distribution of power among societal actors across time, which is reflected in political institutions. (6) Institutions shape not only strategies, but also the historical evolution of preferences, goals and interests. (7) Meanwhile, historical events either constrain or offer opportunities which facilitate institutional resilience or transformation. (8)

HI can advance our understanding of khaki capital by illustrating how the military's economic interests, goals, preferences and strategies were historically shaped and how their influence within the economy was built over time. Other than illuminating the development of the armed forces as an institution (as well as the role of key military officials), the HI analysis of khaki capital in Thailand also elucidates how certain structural transitions, including changes in the global economic system, (9) have affected the military at different levels, thus affecting the extent to which historical legacies helped entrench path dependence and whether critical junctures to establish civilian oversight were able to realign that path.

Understanding the development of khaki capital in Thailand through HI involves three principal concepts: historical-cultural legacies; path dependence; and critical junctures. Historical-cultural legacies are the contextual conditions of the past that, once created, become entrenched through self-replication. These include traditions of autocracy as well as cultural institutions including kingship, which are pertinent examples of the "historical legacies... related to [path dependence]... [that bolster] military autonomy and privileges". (10) Path dependence refers to an evolutionary trajectory in which an original institutional choice or decision is reinforced by subsequent ones. This occurs because when actors make institutional choices, "the costs of reversal are very high.... The entrenchments of certain institutional arrangements obstruct an easy reversal of the initial choice". (11) In general, civil-military relations tend to be "a path-dependent phenomenon" since military leaders, as status quo stakeholders, can often veto civilian attempts to implement institutional changes to rein in military-backed authoritarianism. (12) The third concept of critical junctures involves "short, time-defined periods, where antecedent conditions allow contingent choices that set a specific trajectory of institutional modification... [which becomes] difficult to reverse". (13) Because khaki capital is predicated on the institutional influence that the military wields, it can thus be disrupted by a critical juncture involving the re-alignment of major political and economic structural configurations. Two "environmental variables" condition these structural configurations: structure and military cohesion. The former refers to crises such as insurgencies, invasions, economic crisis or pandemics. These events, with some exceptions, generally help militaries boost their political power. The latter refers to the relative ability of the military to transcend internal factionalism and act in cohesion, especially vis-a-vis civilians, at any given period of time. (14)

This article argues that cultural-historical legacies and environmental conditions have contributed to, and entrenched, the military's pre-eminence in Thai politics. In particular, the culturalhistorical legacies of autocracy and the legitimacy afforded by the monarchy's support for the armed forces have sustained the path dependence of the military and its economic clout. (15) Structural factors, such as counterinsurgency campaigns and the ability to maintain military cohesion, have also thwarted civilian efforts at control and oversight. Meanwhile, potential critical junctures that could have extricated the country from military authoritarianism have been stillborn due to military coups.

The History of Civil-Military Relations in Thailand (1932-2021)

The Thai military first took shape as an institution under King Rama IV, who created a permanent standing army in 1852. Before 1932, Siam was deeply embedded in the cultural-historical legacy of being a monarchy-controlled autocracy. In 1932, a military coup...