Thailand’s OECD ambition hinges on rule of law and regulatory reform

Thailand is at a crucial turning point in its economic and social development, as the country faces intensifying economic competition, shifting global geopolitics and the need to restructure for the modern economy.

One of the government’s key missions is to secure Thailand’s membership of the Organisation for Economic Co-operation and Development, or OECD, by 2028.

Although many may view the OECD simply as an international economic organisation made up largely of developed economies, Thailand sees accession as a “historic opportunity” to raise standards of governance, improve regulations and restore confidence among global investors.

The issue was discussed in depth at the Thailand Rule of Law Leadership Forum 2026: Competitiveness and OECD Readiness, which brought together policymakers, academics and business leaders to exchange views on Thailand’s future under OECD standards.

Participants shared the view that the “rule of law” would be central to determining Thailand’s competitiveness over the next decade.

Rule of law as invisible infrastructure

Prof Kittipong Kittayarak, a member of the committee overseeing Thailand’s OECD accession process, noted that Thailand has long focused on investment in visible infrastructure, such as roads, railways, airports, seaports and public utilities, believing these to be key drivers of competitiveness.

However, he argued that equally important is “invisible infrastructure”, referring to the country’s legal system, rule of law, transparency and good governance.

Kittipong compared Thailand to a smartphone, explaining that the country has relatively strong “hardware”, including transport systems and physical infrastructure. It also has “applications”, or new laws, that are regularly updated to keep pace with change.

The remaining weakness, however, lies in the “operating system”, which he likened to the rule of law and law enforcement mechanisms.

“If the operating system does not work efficiently, no matter how modern the hardware is or how good the laws are, the whole system cannot function at full capacity,” Kittipong explained.

Unlocking Bt135bn in hidden economic costs

A long-standing concern for the business sector is the complexity of regulations and licensing systems, which create significant costs for operators.

Information presented at the forum showed that Thailand has more than 100,000 pieces of subordinate legislation and more than 3,000 types of licences, many of which are overlapping, outdated or no longer suited to current economic conditions.

Kittipong estimated that if Thailand can reform regulations to make them more transparent, easier to use and aligned with international standards, the country could reduce costs and generate up to 135 billion baht in added economic value.

Such reforms would also reduce the scope for excessive discretion, narrow opportunities for corruption and improve the efficiency of public services.

Thai economy still trapped by structural problems

Payong Srivanich, chairman of the Thai Bankers’ Association, observed that although Thailand has strong economic potential, a strategic location and a resilient business sector, the country continues to face long-running structural constraints. One major issue is the large size of the informal economy.

World Bank data show that Thailand’s informal economy accounts for as much as 48% of gross domestic product (GDP), while informal workers make up 55% of the total labour force.

This not only affects economic efficiency, but also reflects imbalances in the country’s tax and welfare systems. At present, only 11.2 million people file tax returns out of the total population, while only around 4 million actually pay tax.

Thailand also faces a clear concentration of economic activity. Just 1% of businesses generate 65% of GDP, while small and medium-sized enterprises (SMEs), which account for more than 99% of all businesses, continue to face limits in accessing finance, technology and business opportunities. As a result, economic inequality remains a persistent structural problem.

“These issues are connected to the high level of household debt and also affect investor confidence. This is one reason why many Thai entrepreneurs are increasingly looking for opportunities to expand overseas rather than investing domestically,” Payong noted.

Rule of law as the economy’s core software

Payong described the rule of law as not only a matter for the justice system or legal profession, but also as the “software” that enables the entire economy to function efficiently.

With a strong rule of law, investors can have confidence in the rules, law enforcement and public-sector transparency. This directly affects decisions on investment, the creation of new businesses and the expansion of economic activity.

Conversely, unclear laws, inconsistent enforcement or excessive room for discretionary power become obstacles to doing business, increase costs and create greater risks of corruption.

Payong pointed out that Thailand is currently facing “regulatory overload”, with too many rules and regulations creating unnecessary burdens for businesses and limiting national development.

Complex and outdated regulations not only raise the cost of doing business, but also reduce the agility of public-sector processes and weaken Thailand’s long-term competitiveness.

Regulatory reform as an urgent national agenda

The private sector, through the Joint Standing Committee on Commerce, Industry and Banking, is pushing for “regulatory transformation”, a major overhaul of laws and regulations to bring them into line with the modern economy under the “Vibrant Thailand” proposal.

Business leaders believe that cutting duplicated procedures, improving transparency and modernising regulations would help create a business environment that supports fair competition, gives smaller operators more room to compete and reduces the overall cost of doing business in Thailand.

Such reform is also a key part of upgrading Thailand towards OECD standards, which place strong emphasis on good governance, transparency and public-sector efficiency.

Making Thailand the preferred choice

Payong stressed that preparing for OECD membership is not a task for the government alone, but requires cooperation from all sectors of society.

Thailand needs a holistic approach that connects the public, private and political sectors with civil society in order to build a shared understanding of the country’s reform direction.

Another key goal, he emphasised, is to make Thailand a “preferred choice” — a country that global investors trust and select as one of their top investment destinations as competition for international investment intensifies.

The decisive factors are not limited to labour costs or tax incentives. They also include the quality of institutions, public-sector transparency and the credibility of the legal system.

If Thailand can raise these standards, it will strengthen its ability to attract new investment, especially in future industries, and support higher-quality economic growth, Payong added.

OECD as reform process, not just membership

Thuttai Keeratipongpaiboon, director of the Strategy and International Cooperation Division at the National Economic and Social Development Council, stressed that OECD accession should not be viewed merely as a symbolic achievement.

The real value of the process, he explained, lies in using OECD standards as a “catalyst” to improve national administration across all dimensions.

This means the priority is not simply obtaining OECD membership, but changing the country’s working systems to align with international standards.

Thailand is currently at stage six of the 10-stage accession process and is entering the technical review phase. During this period, government agencies must review their laws, regulations and working procedures to ensure they comply with OECD standards.