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The evolution of Taiwan's political economy seems paradoxical. From the 1960s to 1980s, Taiwan went through economic transformations that have been called an “economic miracle.” This was followed by a successful democratic transition from the late 1980s to mid‐1990s that might be considered a “political miracle.” In the early 1990s, Taiwan could be regarded as a success story and a model for developing nations. Yet, Taiwan was soon to “enter troubled waters” marked by growing conflict and threat from China (PRC), fears about the “hollowing out” of its previously vaunted economy, and vicious polarization and gridlock in its domestic politics. We argue that many of the challenges facing Taiwan derive from unanticipated and unintended costs of its previous successes. In particular, what worked to promote successful economic and political development at one point later became counterproductive in the changed circumstances created by the country's rapid developmental trajectory. Our basic research questions, hence, are whether the challenges currently facing Taiwan's political economy can be explained by the country's past pattern of development and, if so, whether these linkages appear to be connected to success or failures in Taiwan's history. [ABSTRACT FROM AUTHOR]

In the present paper, an integrated cash flow model is developed to examine the relative impact of tax incentives, financial subsidies, and macroeconomic variables on the profitability of industrial investments. It allows for the variables in the model to interact with each other. An application of the model is carried out for Taiwan, which has implemented a variety of fiscal incentives over the past 40 years. The principal policy conclusion is that trade and macroeconomic policies are much more important than income tax incentives or subsidized finance policies in determining the success of Taiwan's industrialization process. The effects of all of the fiscal incentives are found to be much smaller than those of the trade policies or the fundamental trends in macroeconomic variables such as the movement of the real exchange rate and the real wage rate. [ABSTRACT FROM AUTHOR]

Examines the effects of the tenure system introduced with the land reform carried out in Taiwan from 1949 to 1953 on the rice sector. Features of the land reform program; Model for rice production in Taiwan; Behavior of rice farmers since the land reform; Effect of land reform on the rice production; Effect on the market of rice in Taiwan.

Argues that Taiwan and South Korea have had unusually liberal trade regimes despite the conclusions drawn from comparative trade studies and neoclassical studies. Departure from free trade principles; Trade regime in 1969; Import impediments after 1969; Economic effects of protection; Design of multinational economic institutions; Belief system of economics.

South Korea and Taiwan share common structural characteristics and export-led industrialization. Several studies have documented in active role of government, beyond correcting market failures. But the role of government differs. The Taiwan government has been supportive rather than interventionist, whereas the Korean government has been collaborative and even coercive in relations with the private sector. Government in both countries helped launch and sustain the export-led strategy, taking into consideration the initial conditions in industrial organization and structure, capital markets and trade. Although the strategy contributed to export development, once put in place, the respective governments have been unwilling and unable to adjust their role to changing circumstances. This rigidity accounts for the inefficiency of government in Korea in the 1970s and in Taiwan in the 1980s. Since the import substitution in the 1950s, the Korean government has intervened in the allocation of resources creating an entrenched policy bureaucracy that controls the means for plan implementation. The institutional setup provides domestic market protection, implements industrial targeting, and issues permits of entry in many industries and foreign loan guarantees.