KEEPING PEOPLE’S HOPE ALIVE THROUGH HOPES: SOCIAL CONTRIBUTIONS OF THAILAND’S NATIONAL LOTTERY OFFICE

by Police Major General Attagrit Tharechat History and Development of Lottery in Thailand

The Chinese immigrants introduced some forms of lottery to Thailand during the reign of King Rama III, who granted a lottery operations concession to a group of Chinese businessmen. While the exact date of the introduction of lottery to Thailand is not known, it is recorded that the first lottery draw in the country was held in 1835. It is also known that the Chinese immigrants who resided in the capital city of Bangkok during those days were among the first group of regular patrons of the lottery. To determine the winners, the Chinese used a pool of their alphabets, not numeric, to draw for the winning prizes. This made it difficult for the Thais to participate and bet for the winning prizes. This also explains why, at first, the lottery was popular and played almost exclusively among the Chinese immigrants.

Later on, the competition for the concession of lottery operations became fiercer because there were more Chinese businessmen who wanted to operate the lotteries. The net result was more lottery operators and higher concessionary fees. New marketing strategies were, therefore, needed to attract large untapped Thai potential players. The most innovative one, by that day’s standard, was the replacement of Thai for the Chinese alphabet. This change made it easier for the Thais to understand how the game was played and could decide what alphabets they wanted to buy. This form of lottery became very popular among the residents of Bangkok, particularly those Thais who were enticed by a dream of becoming rich. The numbers of the Thais who patronized the lottery increased rapidly and constantly for nearly 40 years, to the point that the Chinese lottery operators had to quell the thirst of the Thais for a lottery ticket by selling and drawing it twice a day, once in the morning before noon and once in the evening before dusk.

The Chinese immigrants introduced some forms of lottery to Thailand during the reign of King Rama III, who granted a lottery operations concession to a group of Chinese businessmen. While the exact date of the introduction of lottery to Thailand is not known, it is recorded that the first lottery draw in the country was held in 1835. It is also known that the Chinese immigrants who resided in the capital city of Bangkok during those days were among the first group of regular patrons of the lottery. To determine the winners, the Chinese used a pool of their alphabets, not numeric, to draw for the winning prizes. This made it difficult for the Thais to participate and bet for the winning prizes. This also explains why, at first, the lottery was popular and played almost exclusively among the Chinese immigrants.

Later on, the competition for the concession of lottery operations became fiercer because there were more Chinese businessmen who wanted to operate the lotteries. The net result was more lottery operators and higher concessionary fees. New marketing strategies were, therefore, needed to attract large untapped Thai potential players. The most innovative one, by that day’s standard, was the replacement of Thai for the Chinese alphabet. This change made it easier for the Thais to understand how the game was played and could decide what alphabets they wanted to buy. This form of lottery became very popular among the residents of Bangkok, particularly those Thais who were enticed by a dream of becoming rich. The numbers of the Thais who patronized the lottery increased rapidly and constantly for nearly 40 years, to the point that the Chinese lottery operators had to quell the thirst of the Thais for a lottery ticket by selling and drawing it twice a day, once in the morning before noon and once in the evening before dusk.

The modern form of lottery, using numbers rather than alphabets, did not come to Thailand until the year 1874, during the reign of King Chulalongkorn (Rama V). The person who brought this form of lottery to Thailand was Henry Alabaster (2013), a former British diplomat to the Court of Siam. He introduced lottery to Thailand as a fundraising scheme. At that time the king granted the Royal Bodyguard Department permission to operate a lottery on the occasion of his birthday. The proceeds from the sales of the first lottery draw were used to assist and defray the cost that the foreign merchants had to bear for bringing goods to display at the Museum in Concadia Building located in the compound of the Grand Palace. 

            This numeric form of lottery, however, was not considered as an effective fundraising device until 1917, when the British government wanted to borrow money from the government of Thailand to fund and balance its budget deficits caused by the staggeringly high costs of World War I. Thailand, as an ally of England, wanted to help out, but was afraid that this would affect the fiscal stability of the country. King Vajiravudh (Rama VI), therefore, granted permission to a group of Thai citizens to issue lottery tickets in order to collect the proceeds from the sales and use them as a loan to the British government from the people of Thailand. The drawing of this lottery was conducted at the British Embassy in December 1917.

            Evidently, the Thai government during the reign of King Rama VI, more specifically the members of the royal court and the elites, viewed the lottery as an effective fundraising device for the goal of collecting enough proceeds to support government-initiated projects on some special occasion or event. The second organized lottery of this model was later issued and drawn at the Winter Fair. The proceeds from the sale of this lottery were mainly used to cover the cost of this Winter Fair, which was held to celebrate King Rama VI’s birthday in 1918. At the same time the British Government was also authorized to issue lottery tickets in Thailand.

            In 1923, King Rama VI granted special royal permission to issue a sale of one million lottery tickets, at the price of one baht each. The goal was to raise a one million baht fund to buy guns and to cover for the management and operational costs of Wild Tiger Corps (Sue Pa Volunteer Unit). The actual draw of the lottery prizes was carried out in early 1924. Three more draws were carried out later in the year. But, it was found that the operations of this special lottery for the support of Wild Tiger Corps were plagued with some irregularities, and had to cease its operations.

            In early 1933, during the reign of King Prajadhipok (King Rama 7), the Siamese Red Cross applied for permission to run a lottery sale in order to collect proceeds to balance its budgets. Prince Boriphat granted the permission and reasoned that this was a public charity. The number of tickets printed for sale was 500,000, and each ticket was sold at the price of one baht. The tickets were sold out, and the drawing itself attracted much more attention from the public than the previous ones.

            As the lottery became more popular and succeeded in raising funds for public use, Mr. PridiPhanomyong proposed, in 1933, that a state lottery be formed for the benefit of the country as demonstrated in Britain and France. As a result, the government of Thailand set up the Siam Lottery Office. This office set up a regular drawing schedule of four times a year. Because of the popularity and a greater demand, the number of printed tickets was increased to 1,000,000. The ticket price remained at one baht each.

            Also in 1933, the Thai government, led by Premier Phraya Paholpolpayuhasena, had a policy to reduce draft deferment tax rate. In so doing, it had to find revenues from other sources to compensate for the lost tax revenue. The government decided to use the lottery as a mechanism to raise funds for that purpose. Rather than using the Siam Lottery Office, which had just been recently formed, the government authorized the Revenue Department to run this operation. The government enacted the Gambling Act to stipulate that the Revenue Department run the operations throughout the country. At this time the tickets were sold and drawn by a specified time period and schedule. The Thai government lottery enjoyed the highest level of popularity throughout the country up to that time. At the first draw, there were winners from 68 of 70 provinces of the country.

By 1934, as the Thai Government needed more revenue for various purposes, the Government assigned the Revenue Department to oversee the printing and sale of lottery tickets. The drawing for winning numbers was made periodically three to four times a year. By this time, it was clearly visible that the eager patrons of the government lottery were largely the low-income earners, those who did not earn wages or salaries regularly. For understandable reasons, these are the groups of people who had high hopes for a better life, if not for being rich one day. They are the ones who prayed diligently to the God of Chance. They viewed that their chance of winning the lottery is within the Providence of some divine power. Praying and hoping are what they could do.

            To prevent the Government lottery from being stereotyped as a game for only the poor, the Revenue Department issued a special lottery to evoke interest, and marketed it specifically to those who were wealthy or earned a regular salary. This met with some degrees of success. In addition, the Ministry of Interior was also authorized to run a special kind of lottery to fund municipal programs. The prize drawing dates were scheduled for the months in which there was no drawing for the lottery issued by the Revenue Department. These were done in order to avoid a competition in lottery marketing with the Revenue Department. There were two kinds of municipal lottery: General Municipal Lottery and Provincial Municipal Lottery. The tickets of the first type of lottery were sold throughout the country. The proceeds went to government public work projects, such as the construction of hospitals, schools and sport stadia. The proceeds from the sales of the second type of lottery came almost exclusively from two major cities: the capital city of Bangkok and the city of Thonburi.

            It should be noted that, at that point in time, there was more than one major operator of Government lottery. To avoid the stiff competition in marketing strategies and to reduce the confusion in terms of authority, the Thai government transferred the Ministry of Interior control of the Government lottery to the Ministry of Finance on April 20, 1939. Prior to that, on April 5, 1939, the Ministry of Finance set up the first Government Lottery Committee, with its office housed in the City Hall of Bangkok and Thonburi. This office later on was named the Government Lottery Office (GLO). In June of 1939, the number of draws increased from three to four times a year to once every month. The number of lottery tickets sold in the market, at the price of one baht each, increased dramatically from 1,000,000 to 5,000,000. After 1944, the lottery sales steadily increased, as did prices. Today, the number of tickets sold is 72,000,000 per drawing and the market price is 40 baht each. The frequency of draws has increased to twice a month.

The Ardent Supporters of Thai Government Lottery

Some academicians argue that the lottery is a kind of regressive tax; defined as a tax that takes larger percentages of income from low-income earners than from high-income people (Borg and Mason 1988; Clotfelter and Cook, 1987; Hansen, Miyazaki, and Sprott 2000; Price and Novak 1999). In general, a regressive tax is applied uniformly. This means that it hits low-income persons harder. The way lottery disguised itself as a regressive tax is through people’s hope. People in low-income brackets, in general, have more hope for a better life than those in high-income brackets.

In theory, most poor people are structurally poor, meaning that they are stuck in poverty. In this instance, societal norms and practices work against them and subsequently hinder their upward mobility.To elaborate further, it is said, as an example, that, in general, a child who is born to poor farmers who have a low level of education and live in a hostile environment, are destined to poor, when he or she grows up. In the future, the progenies of that child will also more than likely be poor. Structurally, poor people normally do not possess the means to help them overcome the structural discrimination they have to face. We call this phenomenon a “poverty trap,” that entraps the children of the poor into the vicious cycle of poverty.

It is necessary to consider whether the structure of Thai society contributes to the continuing impoverishment of a significant segment of society. We can indirectly look at this issue through studies of income distribution and the percentages of people whose annual income chronically lies below poverty levels.

When we examined the pace of economic development of Thailand, we found an impressive record. For the three decades since 1960, the country has experienced a satisfactorily high rate of economic growth (Hutaserani and Jitsuchon 1988). In 2013, it was reported that Thai economy grew by 6.5 percent (Bank of Thailand 2013).

Thailand’s longer-term record in poverty reduction has also been equally impressive. Thailand measures poverty incidence by comparing per capita household income against the poverty line, which is the income level that is sufficient for an individual to live at the minimum standard of living in Thailand. The proportion of people living under the poverty line gradually declined from over 57 percent in the early 1960s (The World Bank 2011) to 45 percent of the population in 1988 before it decreased to 17 percent in 1996. The incidence of poverty increased to 21 percent in 2000 before it declined again to 11 percent in 2004, (Office of the National Economic and Social Development Board,n.d.) which is the level that has already met the Millennium Development Goals set by the United Nations.

The problem of structural poverty still remains in spite of these impressive improvements. The disparities among regions and groups are still noted. The incidence of poverty is still concentrated in the Northeast and the North. These two regions combined represent nearly 80 percent of the poor in the country. This translates into 5.81 million persons. A disaggregation of the total number of the poor in the whole country by urban and rural categories indicates that more than half of the poor live in rural areas. Most of the poor have low educational attainment, which limits their job opportunity or their ability to find a higher-earning job. More than half were in the agricultural sector, and the majority were landless farmers.

Another way of unraveling the existing structural discrimination against the economic advancement of the poor is by analyzing the studies on income distribution in Thailand. Based on the results of many studies, we found that the overall reduction in poverty is encouraging. But when we turn to the issues of income distribution and income inequality, it is less reassuring. Our literature reviews indicate that just as poverty consistently fell throughout the country (though not uniformly) the levels of income disparity among the rich and the poor became wider.

We use the Gini Index to measure the extent to which the distribution of income among individuals deviates from an ideal equal distribution. A Gini Index of 0 represents perfect equality, whereas an index of 100 signifies maximum degree of income inequality. In 2006, Thailand’s Gini Index of 43 was ranked 47, and tied with Cambodia, in the global comparison (CIA World Factbook 2011). This index rose to 54 at the end of the decade (The World Bank 2011). With the poor showing on the index, Thailand does worse on the issue of income distribution than many countries in Asia and stays in the middle among the ten member countries of ASEAN.

More insight about income inequality can be gained by looking at how much money the rich and the poor make in their earnings. Statistics on income earning by groups show that the richest 20 percent in Thailand makes 15 times more than the poorest 20 percent (Johnston 2011, Seagraves 2010, The World Bank 2011 & Trading Economics 2013). For the nation as a whole, the ratio of the income of the richest 10 percent to that of the poorest 10 percent is 28 (The World Bank 2011). The bottom 60 percent of the population’s share of income is only 25 percent, meaning the other 75 percent share of total national income goes to 40 percent of the population (Seagraves 2010). These statistics are the reason for concern. At least for one reason, income inequality has a negative impact on poverty reduction.  Had income inequality not risen, the level of the population living under the poverty line would have been much lower.

Now that we have looked into the pictures of poverty and income inequality, it is interesting to look at how they are related to lottery sales. In order to understand the relationships between the two, we first establish the premise that as long as humans live there is always hope for the betterment of tomorrow. There is no difference by color of skin, religion, gender, age, occupation, or place of residence; people always live with hope. The only difference is in what they are hoping for. But the poor certainly hope to become wealthy one day. For them, wealth is associated with many good amenities in life that most people wish for. How to become wealthy is an obscure question that has no clear answer, particularly for a poor person who is entrapped by poverty.

In order to shed some light on the relationships between economic disparities and the demand for lotteries, we reviewed research conducted in other countries and have come to a conclusion that, in statistical terms, there are positive relationships between the two variables. For example, Freund and Morris (2005), using data from the United States, found that, when controlling for other factors, the states with legal lotteries have a higher level of income inequality than those states that have no legal lotteries. When the unit of analysis was individuals, rather than state, a study in Taiwan found a small and not significant impact of income inequality on lottery sales. The authors attribute the results of the study to the small degree of income inequality in Taiwan, which has a low effect on lottery expenditures. Yet, there is still evidence that lottery tickets are disproportionately consumed by the poor, who eventually, become the heavy bearers of the implicit progressivity of the lottery tax (Chen, Chie, Fan & Yu 2009).

Based on the findings of a positive relationship between the percentage of people under the poverty line and volume of lottery sales, on one hand, and income inequality and lottery sales on the other, we can infer that the future demand for lotteries in Thailand will undoubtedly increase. But in order to better comprehend this inference, we need to recognize one disturbing fact that the low-income earners, particularly those below the poverty line, are the regular patrons and staunch supporters of government (or state) lotteries. The increase in Gini Coefficient in Thailand over a period of time reflects that, with a larger population size now than before, a large proportion of, if not more, people will still be entrapped by poverty. Keeping in mind that, the term ‘poverty’ here is only relative, and it is not an absolute or abject poverty, which means that those people who live under the poverty line also enjoy the rising per capita income, except that their percentage share of the increase in income is dwindling. As a result they will always find it hard to free themselves from the poverty trap. But they are still as free as ever to patronize both the government and underground lotteries, which is the topic that will not be discussed in this paper.

A study in the U.S. indicates that state lotteries consumed at least 9 percent of take-home income from households making less than $13,000 a year. The average amount spent per household is $645 a year (Rosefield 2013; Williams 2010). In Thailand, we also found some similarly disturbing results. A preliminary tabulation from a research study commissioned to the College of Local Administration (COLA) by the GLO shows similar findings. There is a negative correlation between income and the extent of playing the lottery that is full of hope, and sometimes only a daydream. Needless to say, again, the poor spend a higher percentage of their income on lottery buying. Worse is that the low-income earners are more likely to be the regular and loyal supporters of underground (illegal) 2 or 3-digit lotteries. To them underground lotteries, which focus more on the probability of winning a prize, are more, probabilistically speaking, responsive to their desire to make their dreams come true, supposedly by winning a prize that will help make ends meet.

Social Contributions of Thailand’s National Lottery Office

From the onset, the National Lottery Office was authorized with a clear mandate from the Ministry of Finance to support and help the government balance its budget. It is stipulated by law that the office has to send 28 percent of its proceeds from the sales of lottery tickets to the Ministry of Finance. The payout to the buyers of the tickets amounts to 60 percent of the earnings. Nine percent is earmarked for sales commission. After all these figures are totaled, only 3 percent of the money from ticket selling goes to office management and operations. On average, from the years 2004 to 2012, the national Lottery Office has made an annual contribution of approximately 12,000 million baht to the national coffer. The total of the contributions from 2004 to 2012 amounts to more than 120,000 million baht. All these moneys were sent to the Ministry of Finance. The spending of the funds has to undergo a process of budget approval by the Parliament. How the funds were spent was not under the control of the office.

The GLO only has a 3 percent share of the proceeds from lottery sales to balance the budget under its own discretion. Of this discretionary money, the office spends approximately 90 percent (2.7% of the proceeds) for personnel, compensation, office operations and indirect costs, and is still able to discretionarily allocate close to 10 percent of its budget for relatively small scale philanthropic activities. Regularly, the office has donated, on a case by case basis, to education, sports, health, religion, arts and culture development and promotes programs in a humble way.

Realizing that it has a responsibility to behave ethically and contribute to improving the quality of life of the members of Thai society, the National Lottery Office has sought and has received approval from the government to operate special charitable lotteries. Of the total number of 72,000,000 lottery tickets, sold each 15 days, which are drawn on the first and sixteenth days of month, 22,000,000 are printed and designated as a charity lottery. The proceeds from these charity lottery tickets are earmarked for socially responsible projects. For example, the National Lottery Office has regularly and almost routinely allocated the largest proportion of the proceeds from charity lottery tickets to help the Thai Red Cross.  In addition, during the period of last 10 years, more than 10,000 million baht have been donated to improve services at public hospitals throughout the country. The largest part of the money has been well spent for the construction of patient care facilities, medical equipment acquisition, health research, and health technology development. The GLO has also been trying to close the gap in health care quality between the hospitals located in the rural areas and those in the urban areas. It has been reasoned that by reducing the rural and urban divide, it not only improves the quality of health services and the quality of life of people in the peripheral areas, but it also has a spillover effect of reducing, if not solving, the overcrowding problems of hospitals in urban areas.

The GLO also allocated a large sum of the proceeds from these charity tickets to support education development. Many schools in the remote rural areas received a donation to cover the costs of class room buildings, books procurement for libraries and other learning facilities. Physical improvement such as development of children’s playground has also been a major component of the GLO’s corporate social responsibility program. In addition, the office has provided scholarships to the children of low-income earners. The manner in which these scholarships are awarded to the needy persons are both directly to selected individual students and indirectly through Anada Mahidol Foundation’s selection of the awardees for studying abroad.

Environmental protection has also been a vital part of the active socially responsible programs of the GLO. Many environmental concerned agencies, both private and public, have requested and received financial assistance from the GLO to cover operational costs of their reforestation and wild life reserve projects. Promoting ecological balance and preservation of natural foods for both wild life and humans are also a crucial thrust of the environmental protection program, which also includes watershed protection and improvement or construction of reservoirs. Other environmental friendly programs such as development of clean and efficient alternative energy sources also received financial support from the office.

Keeping People’s Hope Alive

We have mentioned in the previous section that the staunch supporters and the major contributors to government (or state) lotteries in all countries around the globe are the poor, who spend a large proportion of their income to buy lottery tickets. The poor buy lottery tickets with an earnest hope that they would win a prize; if not the jackpot. Comparatively speaking, the poor have a stronger hope to win the lottery tickets than their rich counterparts. Normally, and at least in Thailand, when the poor decide to spend a sizeable chunk of their hard earned money to buy a lottery ticket, they are not just making a wish that they win a prize, but they actually pray diligently to the God of Chance to help them win. We name the money they spend to buy lottery tickets as “praying money;” and it is this money that we want to see returned to the poor and the disadvantaged in a recognizable way. It is quite dismal to learn that their hope vanishes at the end of each lottery draw.

We are well aware that the lottery is a game of hope, and our business is selling hope to people who almost always have to gamble with the little money they have. This money spent on lottery tickets helps keep their hope alive and helps them forget the suffering and the pain of being poor. Most of them are the people who have little or no opportunity to improve their own life quality, and that of the members of their immediate family, whom they also have to take care of. Because of the hope of winning we are selling, we are compelled to make the hope of people last beyond the end of the draw. We reflect and ask ourselves what we are really doing and we find ourselves handing (H) opportunity (O) to people’s (P) enterprises (E) in a socially responsible manner (S). From this reflection, we form the acronym of HOPES. We employ HOPES as a concept upon which a specific strategy to enliven the hope of people can be based.

In the last section, we describe, in brief, what and how much we have done for the people and for society. We could do a lot more with the same old paradigm that we have employed, and the poor will still be as poor as ever. What we need to do is to free the poor from the poverty trap. We ask ourselves again how we can operationalize and translate HOPES into some action. We reviewed our philanthropic programs and realize that our office has served as a fund raising machine for the central government. The proceeds we collected and transferred were treated as national revenue which we generally had no control over. Only those with high political power, particularly, those who can impose their power and political will on bureaucracy can decide how the money from the poor will be spent.

            With the mandates from the cabinets’ resolutions which are embroiled as policy instruction from the government, the GLO has an authority to issue charity lottery tickets. All along, our office has been regarded as a conduit of funds to support many more and larger scale projects, with an increase in requested budget of nearly or greater than one billion baht each. The requests usually come from a high place, which are normally channeled through the minister of different ministries for approval at a cabinet meeting. And because of the perception of those with high political power that the GLO is a fund raising apparatus for the government, we, by ourselves, are not in a good position to advocate any pro-poor project to enliven the hope of the poor. Such action will be regarded as ideological and will be a politically and socially sensitive issue that our office should not initiate. Therefore, it is advisable that we find a strategic partner to implement the concept of HOPES. We have thought that the strategic partner we are looking for must have a status of legal entity and not only represent but be close to the roots of people. It is with this qualification that we have our eyes on Local Administration Organizations (LAO). One advantage of working with and through LAOs is that they are able to pass any ordinance that creates a sustained positive impact on people at the lower level. Another advantage is that, because of its proximity to the poor and to the marginal groups, who normally cannot make their voice heard, they are more informed about and more responsive to the problems and needs of people who are far away from the centers of political, social and economic power.

The concept of HOPE was first implemented in the US state of Georgia in 1992, after Georgia voters passed the lottery amendment by a narrow margin of 95,666 votes (1,146,340 to 1,050,674). That lottery amendment provided revenue for the HOPE program. Unlike HOPES, HOPE stands for Helping Outstanding Pupils Educationally. The 1992 Georgia’s HOPE program was created and based on a merit scholarship aimed to motivate Georgia high school students to pursue education after high school. In 1994, the program expanded to provide support for tuition and mandatory fees and books for four years. The increase in demand for higher education and the rising costs of higher education forced the program to make some operational adjustment, or otherwise the budget reserve would be drained (see Berman and Jones 2012). Other US states such as Delaware, Florida, New Mexico and Tennessee have learned from the experiences of Georgia and adapted it to suit the local situation.

To apply the HOPES scheme, we will seek approval from the cabinet to issue a special lottery to raise endowment funds for local governments to carry out the scheme. The HOPES scheme consists of 5 elements to improve the quality of life of poor people. The five elements are: H for health, O for occupation, P for poverty, E for education and S for security. Theoretically, these five elements form a vicious cycle that creates a poverty trap. People are poor because they have low salary. People have low salary because they do not have good or stable occupation, or sometimes because they have low productivity, or their business failed. This is because they lack occupational skill and technology, as a result of low or no ongoing education. Research also shows that schools that hire the least qualified teachers also produce students that perform lower than the norm. This leads to certain schools not producing many students that go on to college.

            Poverty is both a cause and a result of ill health. For example, poverty causes illness because it leads to inadequate or improper food and poor sanitation as the poor often live in overcrowded places, and have inadequate access to health facilities. Poverty can also be a result of illness, as people who are sick usually lose income or often even their job. Also because health care is costly it may push people into poverty. There is also a theoretical link between poverty and human security (Sanusi and Nass 2013). At the individual level, poor people frequently face high risks from domestic violence, and crime. At the community level, the poorest communities are particularly vulnerable, and often can only survive by short-term coping strategies (Department of Economic and Social Affairs, United Nations 2008). Because of social exclusion, both the poorest persons and poorest communities cannot participate in the process of economic development, which in the long run increases their exposure to all risks.

By supporting LAOs, the GLO will be able to effectively break the poverty trap. In effect, the GLO will provide both start up and endowment funds to tackle problems of health, occupation, poverty, education and security of people at the local level. A standing committee comprised of representatives from all types of local governments and experts in local development administration will be set up and chaired by the Director of the GLO. The committee should also be made up of local business men, women, professionals and people with expertise in promoting local economic development. The GLO will serve as the secretariat of the committee, and also provide policy guidelines as well as technical input to LAOs. The selection and awarding of the grants in aid are carried out annually on the basis of needs, merits, and availability of funds for the proposed HOPES project. The committee may appoint a subcommittee to evaluate the feasibility and the cost benefits of the proposed projects. The opinions of this subcommittee will be provided to the committee before making awards. Another subcommittee on monitoring and evaluation may also need to be set up for management function. This subcommittee will assist both the standing committee and the implementers (LAOs) of the awarded projects in determining the extent to which the project is on track and the need to make any needed adjustment. Particularly, it will make it easier for the standing committee to make an informed decision regarding operations management and service delivery. Moreover, it will ensure the most effective and efficient use of resources, and finally to evaluate the extent to which projects under the HOPES concept have achieved the goal of not just keeping people’s hope alive but actually whether the poverty trap has been dismantled.

In the final analysis, the criteria used for evaluating the merits of the proposed projects is to look at total or net impact of the projects on socio-cultural and economic development at the local level. A recently conducted a study by COLA (Kamnuansilpa et al 2013) indicates that LAOs are quite inactive in promoting economic development. They tend to see this as a task of central government and not their concern. Therefore, the preparedness of local government for local development should also be taken into serious consideration. Only representatives of local communities know what the needs of the local people are, and whether they are able to solve the problems on their own. In effect, the HOPES concept, as advocated in this paper, will help make local governments an engine for economic development. After all, we avail ourselves as a partner of LAOs, not as a God of Chance.

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