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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.

This article presents information regarding the book "Taiwan's Development Experience: Lessons on Roles of Government and Market," edited by Erik Thorbecke and Henry Wan. The book concentrates on the role of government and markets in development and the relevance of Taiwan's experience to development theory and policy. It discusses the East Asian miracle in comparative perspective, key macro policies and reforms in Taiwan's development, the 1954 Liu-Tsiang proposals for economic reform and their impact on the Taiwanese economy, the roles of agriculture, industrial policy, human capital, and labor institutions in Taiwan's development.