Power (lessness) of the state in globalisation era: Empirical proposals on determination of domestic paddy price in Thailand

Abstract

In the context of globalisation, states are insinuated as little homes in the global village. Although arguments on change of powers in the current situation are widely made qualitatively, quantitative analysis by empirical information is still minimal. This study, therefore, chose an advanced quantitative methodology, using time series data on domestic paddy price, cost of domestic rice production, rice world market price, and the government-determined price according to its policy, in multiple regression analysis. The research findings show that, as the cost of domestic rice production does not influence domestic paddy price, at statistical significance of.05, the domestic paddy price is in fact more affected by the rice world market price, which represents the power of globalisation, than by the price determined by the government, which represents the power of the state, at statistical significance of.05, for approximately 4.78 times, indicating that state power in this context is no longer in the position to bargain with the power of globalisation. Hence, policy recommendations continue to be regarded with the adjustments of economic management, in which the current Thai government still chooses to utilise great amount of its budget to intercept the market price of rice.