With the support of the king and the military membership of NARC, a new government was formed under the prime ministership of Thanin Kraivichien, a former Supreme Court justice who had a reputation for honesty and integrity. Though a civilian, Thanin was a passionate anticommunist and established a regime that was in many ways more repressive than those of earlier military strongmen. He imposed strict censorship, placed unions under tight controls, and carried out anticommunist purges of the civil service and education institutions. Student leaders, driven underground by the October 1976 violence, left urban areas to join the communist insurgency in the provinces. As a result of his harsh rule and a growing feeling within the political elite that university students, themselves members of the privileged classes, had been poorly treated, Thanin was replaced in October 1977 by General Kriangsak Chomanand.
Kriangsak was more conciliatory than his civilian predecessor and promised a new constitution and elections by 1979. He courted moderate union leaders, raising the minimum daily wage in the Bangkok area in 1978 and again in 1979. He allowed limited press freedom, and he gave verbal support to the idea of land reform, though no action in this area was forthcoming. In September 1978, he issued an amnesty for the "Bangkok 18" dissidents who had been arrested in the October 1976 violence and tried by military courts.
A new constitution was promulgated in December 1978. The 1978 Constitution established a bicameral legislature, the National Assembly, consisting of the popularly elected House of Representatives (301 members) and the appointed Senate (225 members). The military controlled appointment to the Senate, and it could block House of Representatives initiatives in important areas such as national security, the economy, the budget, and votes of no confidence. The 1978 document also stipulated that the prime minister and cabinet ministers did not have to be popularly elected. When elections were held on schedule in April 1979, moderate rightist parties--the Social Action Party, the Thai Citizens’ Party, and the Chart Thai (Thai Nation) Party--won the largest number of seats, whereas the Democrats lost most of their seats.
Further changes came during 1979 and 1980, however, as economic conditions deteriorated in the wake of the second oil crisis. Uncontrolled inflation caused the standard of living to fall in urban areas, especially Bangkok, while government dilatoriness and corruption in the villages stalled policies designed to help the farmers. In February 1980, the Kriangsak government announced sudden increases in the prices of oil, gas, and electricity. This action provoked opposition from elected politicians and demonstrations similar to those of 1973 by students and workers. As opposition grew, Kriangsak resigned. In March 1980, General Prem Tinsulanonda, who had been army commander in chief and defense minister, became prime minister with the support of younger officers of the armed forces and civilian political leaders.