We would like to thank Dan Slater, Greg Noble, and two anonymous readers from the Journal of East Asian Studies for very helpful comments.Google Scholar

1. Rodrik, Dani, “Growth Strategies,” unpublished paper (2003), available at www.ksg.harvard.edu/rodrik. Temple, Jonathan, “Growing into Trouble: Indonesia After 1966.” In Rodrik, Dani, ed., In Search of Prosperity: Analytic Narratives (Princeton, N.J.: Princeton University Press, 2003); he uses the term “growing into trouble” to refer to a process in which rapid growth “can eventually change the social, economic and political context so profoundly that underlying institutional weaknesses take on much greater importance.” Our use of the term implies institutional weaknesses only in the context of new and different growth challenges.Google Scholar

2. On upgrading, see Humphrey, John and Schmitz, Hubert, “Governance and Upgrading: Linking Cluster and Value Chain Research” (Brighton, U.K.: University of Sussex, Institute of Development Studies, 2000). The most systematic treatment of the structural/upgrading difference is David Waldner, State Building and Late Development (Ithaca: Cornell University Press, 1999).Google Scholar

3. Meier, Gerald, “The Old Generation of Development Economists and the New.” In Meier, Gerald, ed., Frontiers of Development Economics: The Future in Perspective (New York: Oxford University Press, 2001), p. 23.Google Scholar

4. “Function Does Not Map Uniquely into Form.” In Rodrik, , “Growth Strategies.” Google Scholar

5. Bates, Robert, “Social Dilemmas and Rational Individuals: An Assessment of the New Institutionalism.” In Harriss, John, Hunter, Janet, and Lewis, Colin, eds., The New Institutional Economics and Third World Development (New York: Routledge, 1995), p. 46. See Haggard, Stephan, “Institutions and Growth in East Asia,” Studies in Comparative and International Development 38, no. 4 (February 2004). On efficient institutions emerging from distributional considerations, see Knight, Jack, Institutions and Social Conflict (New York: Cambridge University Press, 1992), p. 20.Google Scholar

6. Perkins, Dwight, “There Are at Least Three Models of East Asian Development,” World Development 22, no. 4 (1994): 655–661; World Bank, The East Asian Miracle: Economic Growth and Public Policy (New York: Oxford University Press, 1993).CrossRefGoogle Scholar

7. Economist Intelligence Unit (EIU) data cited in Michael Porter, Thailand's Competitiveness: Creating the Foundations for Higher Productivity , presentation to the National Economic and Social Development Board (Bangkok, May 4, 2003), p. 7.Google Scholar

8. Dixon, Chris, The Thai Economy: Uneven Development and Internationalisation (New York: Routledge, 1999), p. 174.Google Scholar

9. Sugar exports amounted to 708,000 baht in 1850, compared to 150,000 for rubber. Ingram, James C., Economic Change in Thailand Since 1850 (Stanford: Stanford University Press, 1955), pp. 22, 123, from which this discussion of prewar sugar production is drawn.Google Scholar

10. Ibid., p. 125. Thai import duties “were fixed at 3 percent by treaties with the same European powers whose subsidies to beet sugar were contributing to the sharp drop in the world price of sugar, and because she could not afford subsidies to her domestic producers.” Google Scholar

11. Ibid., p. 127.Google Scholar

12. Employment data from Crispin, Shawn, “Sugar-Coated Deals Are Dicey,” Far Eastern Economic Review , November 23, 2000, p. 76. The number of persons directly involved in the growing and processing of sugar is smaller. There are approximately 160,000 farmers, 300,000 seasonal cane workers, and 27,000 mill workers. On Thailand's global position, see NaRanong, Viroj, “The Thai Sugar Industry: Crisis and Opportunities,” TDRI Quarterly Review 15, no. 3 (September 2000): 1. Manufactured goods earn more than sugar, but these earnings are offset by the cost of imported intermediate goods. Economic and Financial Statistics, table 49.1, the Bank of Thailand, www.bot.or.th/bothomepage/databank/EconData.Google Scholar

13. Yield figures from Dixon, The Thai Economy , p. 155. On productivity, see Crispin, , “Sugar-Coated Deals,” 76. On the industry's potential collapse, see Thongrung, Watcharapong, “Sugar Nations Back Cartel,” The Nation, November 20, 2002, online edition.Google Scholar

14. Phongphaichit, Pasuk and Baker, Chris, Thailand: Economy and Politics (New York: Oxford University Press, 1995), pp. 52–54.Google Scholar

15. Sugar can be produced from sugarcane or sugar beets. The following discussion focuses on production of sugar from sugarcane, which is the main way of producing sugar in less developed countries.Google Scholar

16. Larson, Donald F. and Borrell, Brent, “Sugar Policy and Reform,” World Bank (2001), available online at www.worldbank.org/files.1724_wps.2602.pdf, p. 14.Google Scholar

17. Borrell, Brent and Duncan, Ronald C., “A Survey of the Costs of World Sugar Policies,” World Bank Research Observer 7, no. 2 (July 1992): 171–194.Google Scholar

18. Larson, and Borrell, , “Sugar Policy and Reform,” p. 3. The highest subsidies go to sugar farmers in the wealthiest nations. Japan, Western Europe, and the United States all provide extremely high subsidies to their producers, but they are not alone. “Producers of over 40 per cent of world production receive prices that are 50 to nearly 400 per cent higher than the world price,” in Brent Borrell and David Pearce, “Sugar: The Taste Test of Trade Liberalisation” (Canberra and Sydney: Centre for International Economics, 1999), p. 3.Google Scholar

19. Billig, Michael S., Barons, Brokers, and Buyers: The Institutions and Cultures of Philippine Sugar (Honolulu: University of Hawai'i Press, 2003), p. 100.Google Scholar

20. In the 1950s prices averaged between 30 and 65 cents per kilogram. Fluctuations in the 1990s were less dramatic, but the average price had dropped to between 19 and 30 cents per kilogram; Poapongsakorn, Nipon and NaRanong, Viroj, Khrongkanwichai utsahakam oi lae namtansai: lu thang kankkayai kanphalit phua phoem kansongawk. lem thi I [A study of the sugarcane and refined sugar industry: Toward increasing productivity to expand exports], vol. 1 (in Thai) (Bangkok: Thailand Development Research Institute Foundation, 2000), table 1.2, p. 11. On the costs of gluts to Thailand, see Borrell, and Duncan, , “A Survey of the Costs of World Sugar Policies,” pp. 177, 182–183, 186.Google Scholar

21. Nipon, and Viroj, , Khrongkanwichai , p. 8.; Viroj, , “The Thai Sugar Industry,” p. 2.Google Scholar

22. Nipon, and Viroj, , Khrongkanwichai , p. 8. Data on “low-cost,” “low-to-medium cost,” and “medium-to-high cost” producers (such as the Philippines) from Billig, Barons, Brokers, and Buyers, p. 64. Cost differences among these three groups are considerable. In the five lowest cost countries, in 1997 the average cost of producing a pound of sugar in 1994–1995 was 8.93 cents, with Australia producing for 6 cents. In the seven highest cost countries, the average cost was 51.78 cents per pound. Thai sugar averages approximately 10 cents per pound. But in a world market where sugar prices ranged between 9 and 13.6 cents per pound in the 1990s, the five cheapest producers could make profits consistently, whereas Thailand could not.Google Scholar

23. Ingram, , Economic Change in Thailand , p. 126. The value of sugar imports in 1950 was 34 million baht, up from 19.4 million in 1945, and 5.1 million in 1941.Google Scholar

24. Christensen, Scott and Rabibhadana, Akin, “Exit, Voice, and the Depletion of Open Access Resources: The Political Bases of Property Rights in Thailand,” Law and Society Review (November 1993): 5–6. The authors emphasize the generally informal nature of Thai property rights. See also Feeny, David, “Thailand Versus Japan: Why Was Japan First?” In Hayami, Yujiro and Aoki, Masahiko, eds., The Institutional Foundations of East Asian Economic Development (New York: St. Martin's, 1998), pp. 430–431. Sugar acreage was 412,000 rai in the early 1950s, 865,000 in the mid-1960s, 2,927 in 1980, and 4,298 in 1989–1990; Pasuk, and Baker, , Thailand: Economy and Politics, pp. 54, 135.Google Scholar

25. Wonghanchao, Warin, “The Relationship Between the Business Elites, Sugarcane Planters, and the Bureaucracy in the Thai Sugar Industry.” Paper prepared for the Social Science Research Council–Joint Council for Southeast Asia, Sukhothai, Thailand, December 9–12, 1986. On Chinese vulnerability to predation in the 1950s, see Skinner, William G., Chinese Society in Thailand: An Anthropological History (Ithaca: Cornell University Press, 1957), pp. 394.Google Scholar

26. Billig, , Barons, Brokers, and Buyers , pp. 118, 104–107, 62.Google Scholar

27. Sheales, T., Gordon, S., and Toyne, C., “Sugar: International Policies Affecting Market Expansion” (Canberra: Australian Bureau of Agricultural and Resource Economics, Research Report 99.14, 1999).Google Scholar

28. Christensen, Scott, “Coalitions and Collective Choice: The Politics of Institutional Change in Thai Agriculture.” Ph.D. diss., University of Wisconsin, 1994; Silcock, T. H., Thailand: Social and Economic Studies in Development (Durham: Duke University Press, 1967), p. 184. The classic study of the commercial banks' role in Thailand's postwar diversification is Kevin Hewison, Bankers and Bureaucrats: Capital and the Role of the State in Thailand (New Haven, Conn.: Yale University, Center for International and Area Studies, 1989).Google Scholar

29. Inson, Sayon, “Anachak Thai Rung Ruang” [The Thai Rung Ruang Kingdom], Phuchatkan [Manager] 5, no. 51 (December 1987): 113–132. Other leading sugar-milling families also relied upon commercial banks, or a combination of commercial banks and personal connections with other businessmen. Aree Choonfong founded the Wang Kanai Group, now the third largest sugar group in the country, with help from fellow businessmen and the Thai Military Bank. When faced with an exchange-rate crisis in 1983 that caused the group to lose more than 3.7 billion baht, the Thai Military Bank helped it survive with strong financial support; see Santivimolnat, Santan, “Sugar Milling Empire 30 Years in the Making,” Bangkok Post, January 10, 2001. See Hewison, Kevin, “The Development of Capital, Public Policy, and the Role of the State in Thailand.” Ph.D. diss., Murdoch University, 1983, appendix B (list of ties between sugar millers and commercial banks).Google Scholar

30. The four firms were Ruang, Thai Roong, Phong, Ban, Lee, Kwang Soon, and Phol, Mitr; see Pasuk, and Baker, , Thailand: Economy and Politics , p. 135, and Hewison, , Bankers and Bureaucrats. The overthrow of Field Marshal Thanom Kittikachorn's government in 1973 by student-led demonstrations ended one firm's (Thai Roong Ruang) control of exports. After the collapse of the Thanom government the military was fragmented among competing cliques, and civilian governments allowed Thai Roong Ruang's competitors to begin to establish their own export firms. In the following twenty years, production capacity became more dispersed. Whereas the three largest sugar milling groups produced 55 percent of Thailand's sugar in 1979–1980, the three largest groups in 1992–1993 controlled only 34.13 percent of total production capacity. In 1998 the three largest groups produced approximately 38 percent of the sugar, and Mitr Phol had become the largest group.Google Scholar

31. Siamwalla, Ammar and Setboonsarng, Suthad, Agricultural Pricing Policies in Thailand: 1960–1985 (Bangkok: Thailand Development Research Institute, 1987), pp. 92–93.Google Scholar

32. Jessadachatr, Phitsanes, A History of Sugar Policies in Thailand: 1937–1975 (Bangkok: Faculty of Economics, Thammasat University, 1977), p. 72.Google Scholar

33. Pasuk, and Baker, , Thailand: Economy and Politics , p. 135; Phitsanes, , A History of Sugar Policies, pp. 71–73.Google Scholar

34. Netayarak, Prayong, Kankamnot nayobai sethakit kankaset: karani tuayang Kankamnot rakha oi [Setting agricultural economic policy: The case of sugarcane pricing] (Bangkok: Faculty of Economics, Thammasat University, 1988).Google Scholar

35. Rodrik, Dani, “Institutions for High-Quality Growth: What They Are and How to Acquire Them.” Paper presented at the International Monetary Fund Conference on Second-Generation Reforms, Washington, D.C., November 8–9, 1999.Google Scholar

36. Property rights in the form of corvee, prisoner of war slavery, and debt slavery were gradually abolished during the end of the nineteenth century. Feeny, David, The Political Economy of Productivity: Thai Agricultural Development, 1880–1975 (Vancouver: University of British Columbia Press, 1982); Feeny, , “Thailand Versus Japan,” p. 431. See also Christensen, , Coalitions and Collective Choice, p. 5.Google Scholar

37. Christensen, and Akin, , “Exit, Voice,” pp. 1–2.Google Scholar

38. Morell, David, “Power and Parliament in Thailand: The Futile Challenge.” Ph.D. diss., Woodrow Wilson School, Princeton University, 1974, p. 136 (“Without money, no network; without network no power; and without the power, no money”).Google Scholar

39. This process can be seen in the careers of the founders of two major groups of mills. Suree Atsadathorn, founder of the Thai Roong Ruang group of mills, was one of the first entrants into the modern sugar business. He gained familiarity with the industry through his machinery repair business, and in the early 1950s he saw good prospects for sugar sales, especially after the creation of the Thai Sugar Corporation (TSC). Suree found supporters among officials in the TSC in 1953, and when General Sarit Thanarat seized power in 1957 and placed his own men on the TSC board, Suree was quick to cultivate ties with them. Throughout his years in the business Suree shrewdly used political specialists (nakkanmuang) to act on his behalf in the policy struggles affecting the industry. Other entrepreneurs soon followed Suree into the business by finding their own political connections. Chuan Chinthamit, one of the other early founders of a major milling group, got his start in the industry by selling sugar. He developed his own links to powerful military men, especially General Prasert Thammasiri. Other milling families used similar means to build their groups. Warin, “The Relationship,” p. 5; Phiphatseritham, Krirrkiat and Yoshihara, Kunio, Business Groups in Thailand (Singapore: Institute of Southeast Asian Studies, 1983), p. 4.Google Scholar

40. For a fuller discussion, see Doner, Richard F. and Ramsay, Ansil, “Competitive Clientelism and Economic Governance: The Case of Thailand.” In Maxfield, Sylvia and Schneider, Ben Ross, eds., Business and the State in Developing Countries (Ithaca: Cornell University Press, 1997).Google Scholar

41. Phitsanes, , A History of Sugar Policies in Thailand , p. 29.Google Scholar

42. Ibid., p. 56.Google Scholar

43. Ibid., p. 51.Google Scholar

44. Interview with Pichai Kanivichaporn, Bangkok, August 3, 1998.Google Scholar

45. Ammar, and Suthad, , Agricultural Pricing Policies in Thailand , p. 93. An initial step was the creation, by millers and government officials, of a cartel of sugar mills that would sell all of their sugar to the Thai Sugar Corporation. The TSC would in turn use its monopoly profits from domestic sugar sales to subsidize sugar exports. The effort failed because some of the larger sugar mills refused to join.Google Scholar

46. Ibid., p. 94. Information on the R&D component of the 1961 act from Phitsanes, A History of Sugar Policies in Thailand , pp. 52–63.Google Scholar

47. Abdulbhan, Pakorn and Suksupha, Khubbol, “Growth and Structure of the Sugar Industry in Thailand,” International Sugar Journal 78 (1976): 266.Google Scholar

48. Phitsanes, , A History of Sugar Policies in Thailand , p. 193, from which the rest of this paragraph is drawn.Google Scholar

49. Ammar, and Suthad, , Agricultural Pricing Policies in Thailand , p. 88. The Thai Roong Ruang group built three new mills in Kanchaburi Province between 1967 and 1970, and the Mitr Kaset group built one new mill in 1971 and another in 1973. These developments are covered in Sayon Inson, “Anachak Thai Rung Ruang” [The Thai Rung Ruang Kingdom], p. 123; Phikunsri, Buntham, “Tuktalomluk: Wongthengpo,” Phuchatkan 7, no. 75 (December 1989), p. 112.Google Scholar

50. Buntham, , “ Tuktalomluk: Wongthengpo ,” p. 111.Google Scholar

51. Also contributing to associational growth was the high concentration of sugarcane farmers in only four provinces near Bangkok.Google Scholar

52. Ramsay, Ansil, “The Political Economy of Sugar in Thailand,” Pacific Affairs 60, no. 2 (1987): 248–270, from which the rest of this discussion is drawn, unless otherwise noted.Google Scholar

53. Interview with Pichai Kanivichaporn, August 3, 1989.Google Scholar

54. Such a game is a “coordination” game in which the parties, although starting from different points, are all interested in reaching a deal and, once a deal is reached, have no interest in defecting. More accurately, the conflict can be described as “dividing the dollar,” in which players bargain over the division of some units with transferable utility. And whereas “battles of the sexes” are usually understood to have self-reinforcing equilibriums, the fact that global sugar prices shift has meant that the game between growers and millers must be replayed every year. We are grateful to Cliff Carruba for clarification. See also the discussion of the Rubenstein Bargaining Model in Morrow, James D., Game Theory for Political Scientists (Princeton, N.J.: Princeton University Press, 1994).Google Scholar

55. Ramsay, , “The Political Economy of Sugar in Thailand,” pp. 248–270; interview with Pichai Kanivichaporn, Bangkok, August 3, 1989.Google Scholar

56. Interview with Sompob Manarangsan, Bangkok, July 13, 1989.Google Scholar

57. Interviews at the Ministry of Industry, March 1985; interview with Manu Leopairote, Bangkok, June 22, 1989.Google Scholar

58. Pasuk, and Baker, , Thailand: Economy and Politics , p. 344.Google Scholar

59. Available online at www.ocsb.go.th/sugar2001/caneco/sugar_planters.Google Scholar

60. In addition, distributional differences made sugar politics a contentious and sometimes dangerous proposition: Chirayu's main adviser, representing the sugarcane planters, was assassinated in Bangkok during the 70:30 negotiations.Google Scholar

61. Ramsay, , “The Political Economy of Sugar in Thailand,” pp. 248–270.Google Scholar

62. Only six sugar-producing countries had lower production costs for refined sugar than Thailand. Prayong, , Kankamnot nayobai sethakit kankaset: karani tuayang Kankamnot rakha oi [Setting agricultural economic policy: The case of sugarcane pricing].Google Scholar

63. Vietnam has displaced Thailand as the largest sugar exporter to Indonesia and Singapore. Santivimolnat, Santan, “Sugar Milling Empire 30 Years in the Making.” In the mid-1990s, Thai cane yields were below those of fifty-nine other countries; see Nipon, and Viroj, , Khrongkanwichai. This review draws extensively on Viroj, “The Thai Sugar Industry: Crisis and Opportunities,” p. 1.Google Scholar

64. Viroj, , “The Thai Sugar Industry: Crisis and Opportunities,” p. 4.Google Scholar

65. Ibid. Google Scholar

66. Ibid., pp. 2, 4.Google Scholar

67. Unless otherwise noted, this discussion draws on Doner, Richard F. and Ramsay, Ansil, “An Institutional Solution for Thai Economic Success.” Paper presented at the annual meeting of the Association for Asian Studies, Washington, D.C., April 6–9, 1995.Google Scholar

68. On the 60:40 split, see Viroj, , “The Thai Sugar Industry: Crisis and Opportunities,” p. 8. In 1992–1993, the first season the office of the Cane and Sugar Board began reporting the sugar content of cane, the average CCS sugar content was 11.60. In the 2001–2002 season the CCS level was almost identical (11.62); see McSherry, Rodrick, “Thailand Sugar Annual 2003,” Foreign Agricultural Service GAIN Report No. TH3048 (Bangkok: United States Department of Agriculture, 2003).Google Scholar

69. Interview with Pichai Kanivichaporn, Bangkok, July 27, 1992.Google Scholar

70. As land and labor prices rose in the provinces close to Bangkok in the 1980s, growers began to look for cheaper land and labor in the lower north and northeastern provinces (interview with Manu Leopairote, Bangkok, July 23, 1992). In the 1996–1997 growing season the northeastern and northern regions produced 36,883,761 metric tons of cane, whereas the formerly dominant central region produced only 23,129,216. McSherry, , “Thailand Sugar Annual 2003,” p. 9.Google Scholar

71. Information on this initiative is drawn from interviews at the office of the Cane and Sugar Board, Bangkok, July 24, 1992, and with Pichai Kanivichaporn, Bangkok, July 27, 1992.Google Scholar

72. For an excellent discussion, see Pongsudhirak, Thitinan, “Crisis from Within: The Politics of Macroeconomic Management in Thailand, 1947–1997.” Ph.D. diss., London School of Economics, 2001.Google Scholar

73. Viroj, , “The Thai Sugar Industry: Crisis and Opportunities,” p. 4.Google Scholar

74. Interview with Pichai Kanivichaporn, Bangkok, July. 1998.Google Scholar

75. Viroj notes that this process also strengthened support for liberalization: the growth in Thai sugar exports led to a rise in the (baht) export price of sugar and a shortage in the domestic market. Yet the quota system did not allow any increases in domestic prices. Viroj, , “The Thai Sugar Industry: Crisis and Opportunities,” p. 3, from which the following paragraph draws.Google Scholar

76. See Priwan, Yuthana, “Wang Kanai in Talks with TMB on Debt,” Bangkok Post , January 7, 2000, online edition (generous debt restructuring terms for the Wang Kanai Sugar Group by the Thai Military Bank).Google Scholar

77. Crispin, , “Sugar-Coated Deals,” p. 1.Google Scholar

78. Ibid. Google Scholar

79. Viroj, , “The Thai Sugar Industry,” p. 4.Google Scholar

80. Fry, James, “International Productivity Comparisons,” International Society of Sugar Cane Technologists (ISSCT), 23rd Congress, New Delhi, India (February 22–26, 1999), p. 4.Google Scholar

81. Ibid., p. 7 (lists the comparative advantages of public and private sectors in different issue areas, e.g., government is likely to play the dominant role in R&D on cane breeding/variety improvement; the sugar mills will be the major party in R&D on farm mechanization, with state and academic technical support; and disease prevention and control will be best addressed through a joint state/grower arrangement).Google Scholar

82. NaRanong, Viroj, “The Thai Sugar Industry: Crisis and Opportunities,” TDRI Quarterly Review 15, no. 3 (September 2000), p. 4 (Internet edition).Google Scholar

83. The associations judge ministers of industry, and politicians in general, by their “ability to seek funds to support the [sugar] industry, particularly growers,” Praiwan, Yuthana, “Wang Kanai in Talks with TMB on Debt,” Bangkok Post , January 7, 2000. Even when the industry faced major financial problems in 2002, growers' associations continued to ask the minister of industry to adopt policies that would cover their costs of production and secure them a profit; Thongrung, Watcharapong, “Sugar Sector: Financial Aid Seen as Vital,” The Nation, September 14, 2002.Google Scholar

84. Khana Kammagan Pathana Utshahaakam Heng Chaat [National Industrial Development Committee], “Industrial Restructuring Plan: 1998–2002” (Executive Summary), Bangkok (June 15, 2003).Google Scholar

85. World Bank, Thailand Economic Monitor (Bangkok: World Bank, 2003).Google Scholar

86. Aron, Janine, “Growth and Institutions: A Review of the Evidence,” World Bank Research Observer 15, no. 1 (February 2000): 99–135, 104.Google Scholar

87. In the longer study (in process) on which this article draws, we compare the Thai sugar industry with those of a weaker performer (the Philippines) and a stronger performer (Australia). On the utility of a single case, see Rueschemeyer, Dietrich, “Can One or a Few Cases Yield Theoretical Gains?” In Mahoney, James and Rueschemeyer, Dietrich, eds., Comparative Historical Analysis in the Social Sciences (New York: Cambridge University Press, 2003), pp. 305–336.Google Scholar

88. Rasiah, Rajah, “Manufacturing Export Growth in Indonesia, Malaysia, and Thailand.” Unpublished manuscript, 2002.Google Scholar