6The Social Investment Fund in Thailand

The Thai economic crisis that began in 1997 has forced Thai society to reexamine its priorities, and even attempt to reshape some salient fea-tures of its society. Its financial system, the epicenter of the country’s eco-nomic turmoil, has naturally been the focus of much government attention. Thai businesses are undergoing profound and painful changes as a result, and even the political system underwent radical change fol-lowing the passage of the new constitution in October 1997. Given the profoundly conservative nature of Thai society, the pace at which changes have been taking place is nothing short of breathtaking. The crisis has also put an additional burden on the social relationships that bind individuals in society, although the extremely rapid growth and the accompanying economic restructuring that took place in the decade before the crisis were no less responsible for their fraying. Indeed, it is arguable that economic growth had an even greater and more permanent impact. It is to restore these frayed relationships, and to make them func-tional and efficient again, that the social investment fund was established. The terms social investment and social capital require some clarifica-tion, to which end we shall be following the line of thinking pioneered by Putnam (1993), and echoed by Ammar (2001). The argument starts with the obvious proposition that if people cooperate with one another, they can collectively achieve more than by following their individual selfish instincts. The problem concerning collective action arises because, fro