Analysis points to two main reasons for the observed concentration of expenditures:
(i) momentum of expenditures – concentration of economic activity requiring concentration of
investments in infrastructure and education and health facilities in the Bangkok and the central
region. Now these need to be maintained, leading for little fiscal space for other expenditures;
and (ii) the equalization component of the intergovernmental fiscal transfer system is very small
– out of total grants from central government to the local government of TBH 174 billion, a mere
3.7 billion were set aside for equalization purposes in 2011.