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How does the nature of business–government relations shape the capacity of local governments to accomplish their development objectives? How do different patterns of business–government interaction affect the quantity and quality of public services and the ability of citizens to hold policymakers accountable for their performance? This article attempts to answer these questions in the context of one municipality in Thailand, Khon Kaen City. We argue that the political economy of business–government relationships in Khon Kaen can be divided into three eras, each defined by a different model of business–government interaction: the government-led model, the contracting model, and the public–private partnership model. We describe how the character of business–government relationships has changed across these different models, focusing on three dimensions: (1) the degree to which ties are formalised or institutionalised, (2) the extent to which local businesses coordinate, cooperate, or collude amongst themselves, and (3) the distribution of power between the local government and businesses. We also analyse the drivers behind the shift from one model to another and consider the implications of each for local development and service provision, patterns of rent-seeking, and levels of accountability and participation.

OverviewThe smart city, seen at the end of the 20th century in the West, has become a national policy strategy for social and economic development in Thailand in the first decade of this century. While the central government is overseeing and financially supporting designated cities in Thailand, key business and community leaders in Khon Kaen City have worked diligently but have not yet received all the necessary approvals from the central government for locally‐based smart city initiatives. We demonstrate that direction without a clear policy statement will not produce the intended results. Moreover, the highly centralized bureaucratic management style may result in lost opportunities for Thailand to improve life for its citizens. Thailand needs to completely and successfully overhaul its political system in order to pave the way for a functional democracy, good governance, and responsive bureaucracy before its implementation of smart city policy will produce maximum benefits.

AbstractThailand has witnessed very uneven spatial outcomes of economic policies pursued in the country since the 1970s. This partially resulted from top‐down, place‐based approaches favoring the already prosperous regions. Therefore, in order to bridge the territorial economic divide in the country, an alternative policy framework is needed to promote bottom‐up, place‐based initiatives led by local governments. As a starting point, we surveyed a stratified sample of local governments in Thailand to document and classify their economic development activities using the taxonomy of similar practices found in other countries. We examined how these practices are shaped by local conditions found in various localities.