*	Nipon Poapongsakorn holds a Ph.D. in Economics and is Vice-President of the Thailand Development Research Institute (TDRI).

**	Martin Ruhs holds a Master Degree in Economics and is a Senior Researcher at TDRI.

***	Sumana Tangjitwisuth holds a Bachelor Degree in Economics and is a Junior Researcher at TDRI.

1	For a detailed discussion of the relevance of stylized facts to Thailand’s economic development see Ruhs (1996).

2	All labor force and employment data of this section are taken from the Labor Force Survey (1996), Round 3, National Statistical Office.

3	Until 1989 the ratio of labor force over total population had continuously increased, from 44 percent in 1975, to 50 percent in 1985, and finally 56 percent in 1989.

4

While an elimination of the social inefficiency, i.e., the internalization of the external costs related to pesticide use, will certainly lead to a reduction of overall pesticide use, the effects of an elimination of the technological (private) inefficiency on overall pesticide utilization is ambiguous. Pesticide use may actually increase as a result of technological efficiency improvements. The argument goes as follows. Efficiency improvements induce higher profits. Higher profits, in turn, attract “entry” of new producers, i.e., attract more farmers to take up growing the crop whose production has become more efficient and more profitable. Hence, it could happen that the increase in pesticide use at the extensive margin (through the expanded production of the pesticide requiring crop) outweighs the decrease of pesticide use at the intensive margin (due to improved efficiency). A similar argument has been made by Abler and Shortle (1995).

5	Assuming certain conditions to hold, the First Fundamental Theorem of Welfare Economics postulates that competitive markets are (pareto) efficient.

6	There are only two aspects in which Thai regulations lag behind American and European ones. First, the number of banned chemicals in Thailand is much lower than that in more developed and environmentally concerned countries. Second, in contrast to the US and Europe, Thai pesticide regulations are primarily aimed at controlling the availability rather than the utilization of pesticides.

7	The government’s recent policy to emphasize bans prohibiting pesticides to be produced, sold and used domestically rather than to be imported, is a positive and necessary step toward reducing the scope for the described behavior of pesticide companies.

8	Actual pesticide taxes should not be uniform but should vary according to relative hazardousness. The assumption of a uniform tax serves only to simplify the calculation.