Efficiency That Does Not Accumulate: The Forty-Percent Personnel Expenditure Ceiling and the Institutional Limits of Workforce Development in Thai Local Administrative Organizations

Abstract

Thai scholarship on the performance efficiency of personnel in local administrative organizations converges on a familiar conclusion: efficiency comprises time, operating cost, workload, work process and quality of work, and the way to raise it is to develop personnel. This academic article argues that the conclusion is accurate but of limited policy value, because it takes the individual as the unit of analysis and therefore cannot see the institutional condition that determines whether workforce development accumulates into organizational capacity at all. Section 35 of the Local Personnel Administration Act B.E. 2542 prohibits a local administrative organization from setting salaries, wages and other remuneration above forty percent of its annual expenditure budget. This ceiling is a defensible fiscal discipline instrument, but it produces three predictable consequences: smaller organizations with narrow revenue bases reach the ceiling sooner and must rely on fixed-term contract employees; those employees have no career ladder comparable to established local civil servants and therefore exit when opportunity arises; and where turnover is high, training expenditure does not convert into organizational knowledge. The article names this condition non-accumulating efficiency and proposes a three-layer efficiency model distinguishing individual efficiency, process efficiency and accumulated organizational efficiency. It argues that investment should shift toward the second layer, the codification of working knowledge into manuals and systems, because such expenditure survives staff turnover and, being operating rather than personnel expenditure, does not count against the statutory ceiling.