Paper short abstract:

Hirschman's tunnel effect is used widely to explain a social movement regarding economic inequality. This paper discusses this proposition and provides the possible extensions with an application to the Thai economy.

Paper long abstract:

Along the path of economic development advancement of some groups generates an economic disparity in society: The emergence of both winners and losers invariably give rise to the psychologically economic question of how the losers perceive and respond to the benefits of development. The proposition of 'tunnel effect' proposed by Hirschman (1976) is widely used to explain this changing tolerance of economic inequality in the process of economic development. This paper critically discusses this proposition, review the related literature, and provides possible extensions in the context of the Thai economy. Relating to the Thai experience, two explanations are provided of a prolonged period of tolerance of inequality in terms of unique characteristics of Thai people and the high degree of military intervention.