Thailand and State Capture

Though it is a fondly disputed theory, for many in the West the collapse of the Soviet Union signaled an “end of history” – the decisive and presumably permanent victory of the ideas of liberal democracy and market capitalism over each of their twentieth century rivals.

The enthusiasm was based in part on the decline of communism, then perceived as the sole remaining alternative to market capitalism. By 1992, communist regimes seemed to face only three choices: collapse (Eastern Europe), liberalize their economies (China, Vietnam), or remain trapped in a situation of economic backwardness and international isolation (Cuba, North Korea).

Just as importantly, the disintegration of the Soviet Union also came on the heels of an unprecedented expansion of liberal democracy to all corners of the world – what Samuel Huntington called “the third wave” of democratization. The remaining fascist/military regimes in Western Europe (Spain, Portugal, and Greece) had fallen in the mid-1970s. Military dictatorships in much of Latin America followed suit in the late 1970s and 1980s. A wave of “people power” in Asia brought democracy to South Korea and the Philippines, while the massacre of Tienanmen Square had exposed the weaknesses of the Chinese ruling party. After the communist regimes in Eastern Europe had fallen, the “third wave” reached into Sub-Saharan Africa, where a number of dictators were either removed or themselves initiated democratic transitions.

The confidence in a common, “democratic” future was grounded in what was perceived to be a secular, worldwide process of change. What dictatorships remained looked weak and illegitimate, their founding ideologies now thoroughly discredited. Their fall or transformation appeared to be simply a matter of time.

But the high hopes of the early 1990s were gradually disappointed. China and Burma never democratized. Some of the “third wave” democracies suffered outright authoritarian reversals. Others got stuck somewhere between democracy and dictatorship, giving rise to a plethora of new typologies of hybrid regimes. Still more countries maintained the institutional structure of a constitutional democracy, but behind that façade democracy “emptied out” as a result of the decline in the quality of representation, the absence of accountability, the erosion of civil and political rights, and/or the destruction of the rule of law.

A common reason for the gradual decline of democracy in the non-Western world is the phenomenon of “state capture,” which has earned the attention of several international organizations dedicated to the assessment and improvement of the quality of governance. World Bank scholars define “state capture” as “the extent to which firms make illicit and non-transparent private payments to officials in order to influence the formation of laws, rules, regulations or decrees by state institutions.” This definition is useful but arguably somewhat misleading, in that it makes “state capture” appear to be simply a matter of degree.

Certainly, special interest groups and private firms regularly attempt to purchase access to state officials in most of the world – even in the oldest and most “consolidated” democracies. But the difference between a country like Russia and one like the United States is not merely a matter of degree. There is in fact an important qualitative difference between countries where powerful interests exert great influence over the policy-making process, but voters ultimately retain the right to make and break governments, and countries where business interests effectively seize control of the state, in collusion with powerful unelected officials, and commandeer the institutions of the state to maximize their power and wealth, often at the expense of the rights of voters and the space reserved for elected officials to make national policy. Often associated with “state capture” are heavy restrictions on freedom of speech and association, at least to the extent that repression is required to prevent voters from effectively mobilizing against the seizure of the institutions of government.

My law firm has repeatedly encountered various forms of “state capture” in different parts of the world. In places like Guatemala and Russia, oligarchic groups have captured the state and hijacked the intelligence services, the courts, the legislature, and the army to suit their own interests. The pretense of constitutional democracy notwithstanding, all decisions of any consequence are not made by voters or their elected representatives. The outcome of judicial proceedings is mandated from above. The justice system is rigged to guarantee the impunity of oligarchs and their patrons in the state’s officialdom, while simultaneously serving as a powerful instrument to slander, imprison, or chase out of the country those who either oppose the system or have fallen from the grace of its main players. The media is controlled through a mixture of censorship, intimidation, and bribery. And citizens are free only so long as they don’t use their freedoms to press for meaningful change.

While “state capture” is a phenomenon that is typically associated with transitional societies in Eastern Europe and Latin America, it has been a reality in Thailand for several decades. Behind the façade of constitutional government, which has existed in Thailand since 1932, the state has long been under the control of a cartel of Sino-Thai business families, high-ranking officials in the military and civilian bureaucracy, and powerful palace advisors – what our White Paper referred to as the “Establishment.” In exchange for great personal wealth, officials in the civilian and military bureaucracy have consistently made sure that large domestic conglomerates would benefit from favorable fiscal policies, a weak labor movement, and the state’s protection from both domestic and international competition – over decades, allowing a few dozen families to establish virtual monopolies over large sectors of the economy.

Any elected government that ever challenged this system by taking control of national policy and/or by disrupting the amarthaya’s patronage networks has been systematically undermined through accusations of malfeasance and disloyalty to the throne – failing that, it was removed by military coup. The irony is that while Thailand’s Establishment operates in much the same manner as a criminal enterprise, it is those who defy it who most commonly end up labeled as “corrupt” and “unsavory.”

Every coup in the history of Thailand has included a statement that the military had seized power to stamp out corruption, even in the instances where the military had essentially seized power against itself. The use of the rhetoric of corruption to justify illegal seizures of power is the hallmark of state capture in Thailand, engineered by a military-industrial clique. Its use of the grammar of transparency to hide the evils of oligarchy seduces the West even today – even when this clique continues to be soaked in the blood of its citizens, against whom it has repeatedly turned its guns.

Fighting cases in countries that have suffered state capture is exceedingly complicated. On the one hand, because the courts are frequently the most easily hijacked institutions, holding powerful officials accountable for their abuses is hopeless, while trials are little other than elaborate kabuki dances whose outcome is not determined by the strength or weakness of a defendant’s legal case. On the other hand, raising awareness internationally is hampered by the fact that public interest abroad is often limited, while Western governments are famously more interested in the appearance of democracy than they are in the substance.

Thailand’s own variety of “state capture” presents unique challenges. Internationally, since the 1950s the priorities imposed by the realpolitik of this famously volatile region – first the fight against communism, more recently the need to counteract growing Chinese influence – have led the United States government to support and generously subsidize the Thai Establishment no matter how repressive it happened to be at the time. The result is that the one country that ever had any leverage to nudge Thailand in the direction of democratization has never had much of an interest in doing so. Domestically, “state capture” in Thailand is based on a much more sophisticated scam than it is in places like Guatemala or Russia. Whereas, in many such countries, state capture is based on little other than money and naked force, Thailand’s version is based on a great deal of superstition and indoctrination. Over the last hundred years, the main mission of Thai educational and religious institutions has been to fool the population into believing that whatever differences in power and wealth exist are somehow “natural” – and, by implication, that the syndicate running the country has a natural right to do so based on better karma and superior merit.

Perhaps, then, there is a silver lining in the tragic events of the last four years, during which Thailand’s Establishment could only hang on to power by resorting to the most extreme, most desperate measures – military coups, airport occupations, censorship on a massive scale, hundreds of political prisoners, emergency rule, state massacres, and very possibly an ongoing campaign of terror. The reason why these measures are necessary is that everything else – indoctrination included – has failed. The Thai people aren’t buying it anymore. And many of them are determined to take their country back.

The last twenty years did not show, as some Western observers fear, that democracy is unworkable in the developing world. But the fact that the wave of democracy that crested in the early 1990s has since receded demonstrates that there was never such thing as the “end of history.” The erosion of democracy the world has witnessed over the past two decades offers a sobering cautionary tale that no triumph is ever permanent – and that, once achieved, freedom must be defended tooth and nail. As they struggle to reclaim their government from an entitled, unscrupulous elite, the Thai people are writing an inspiring new chapter in the centuries-long struggle for freedom and democracy. In the process, they might just remind the rest of the world how it is done.