It has long been an aim of Thai governments to reduce the substantial inter-regional income
differentials in the country. As shown in SUWANRADA (2005), inter-provincial disparities in Thailand
in terms of per capita GPP are extremely high and still growing. 11 To the extent that fiscal
decentralization will increase inter-provincial differences in the supply of local public goods, price
differences are bound to increase as well, with strong implications for income inequality and interregional
redistribution in Thailand. Granting provinces discretion over public goods supplies which, as
our observations indicate, would then considerably impact on provincial prices and levels of wellbeing,
may exacerbate income inequality among provinces and, in particular, between the relatively
prosperous areas around Bangkok and the poor rural regions.