Thailand introduced state subsidies for political parties for the first time in 1997. The Political Parties Development Fund (PPDF) was intended to reinforce the internal coherence of parties and encourage their democratic functions. Designers hoped that this party financing would be an effective means of curbing illicit fundraising, particularly during electoral campaigns. However, the PPDF has not led to strong party organizations. While the state provides a great amount of financial support for political parties every year, many parties receiving funding are still weak and unable to compete effectively in elections. Utilizing data from focus groups and extensive interviews with politicians, election commission officers, and party members, I demonstrate that financial deficiencies and a weak system of public finance allocation encouraged many small political parties—particularly those without parliamentary representation—to access these new state resources. Instead of helping to sustain the development of small and medium-sized-parties, the PPDF became an alternative source of income for those parties. Parties have intensified their efforts to exploit such funding using questionable means. Consequently, public party financing has contributed to an increase in corrupt practices in Thai party politics rather than strengthening party organizations as well as the party system.