Price control in underdeveloped countries

In addition to the classical criteria of logic and relevance, development studies can also be judged in terms of their interdisciplinary consistency. Slavish adherence to behavioural findings in the other social sciences which tend to corroborate the conventional assumptions of micro‐economic theory, however, should be discounted where their own logic and relevance remain controversial.

Micro‐economic studies of ‘industrial organization’ in Thailand have widely adopted the social anthropological thesis that Thai society is ‘loosely structured’, implying that the Thai behave as typical economic entrepreneurs. Analyses of Thai economic history subscribe to this view for the peasantry but not for the elite. An alternative model of Thai ‘industrial organization’ which dispenses with the purported market orientation of Thai peasants provides greater explanatory value than the conventional interpretation.

The entourage model of ‘industrial organization’ views the Thai economy as a hierarchy of relationships within which each participant is patron to associates of lower rank, and client to one of higher rank. Each entourage, composed of a patron and a coterie of clients, is integrated by a web of functionally and temporally diffuse economic‐social‐political reciprocities. Furthermore, mobility within the system follows rank enhancement opportunities rather than pecuniary incentives.

Thai economic development over the past century can be satisfactorily explained in terms of the entourage model, which deals directly with problems (such as the role of the Chinese and the decline of human bondage) not readily explained in the conventional context. Application of the entourage model, in conclusion, suggests that Thailand's development prospects under guidelines geared to the market model may be seriously misleading.