| Abstract: | This study suggests that a modified theory of new classical economics is useful in assessing Taiwan’s economic diplomacy during both the Lee Teng-hui and current administrations by means of a holistic perspective (levels of analysis). ‘Business‘ is the independent variable in the analysis. The theory of new classical economics implies that the utilities of Taiwanese investment are more effective than the contradictory political objectives of the Taipei government. The impact of business on the result of economic diplomacy is the unintentional easing of tensions across the Taiwan Strait while Taiwanese businesses have pursued profits. Collectively, businesses have strengthened the security of the Taiwanese state, while the Taiwanese government has pursued inconsistent policies (other variables) since President Lee took office. The holistic perspective is heuristic for understanding and explaining Taiwan’s economic diplomacy during the Lee Teng-hui administration. This approach produces the recommendation that the government provide disinterested and effective judicial systems and conclude investment guarantees, double taxation and free trade agreements to help Taiwanese businesspeople. In a wider context, Taiwan’s economic diplomacy aims not only to serve the interests of the government or state but also to further the interests of the Taiwanese state as a whole, including all residents of Taiwan. |
