[1] The previous general elections had been held in July 1995 and resulted in Banharn Silpa-archa of the Thai Nation Party becoming prime minister.

However, concerns about Banharn's ability to ensure a strong economy grew after several unpopular cabinet appointments, including the appointment of Surakiart Sathirathai as Finance Minister, a move that met with the disapproval of the business community due to the sharp economic downturn that followed.

The terms demanded that he step down and a new cabinet be formed with NAP leader Chavalit Yongchaiyudh as head of government.

However, although Banharn agreed to step down, he dissolved the House of Representatives rather than allowing Chavalit to become prime minister.

Vote buying tended to be focused on areas where influence could be purchased relatively cheaply,[2] and most of the vote-buying occurred in the north-east region.

The NAP dominated in the north-east, where Chavalit had established a strong base during his period as Army Commander, building ties with the officials and business leaders.