State policy and industrial promotion in Taiwan: an interrupted time series analysis, 1956-1994

Over the past decade, the statist perspective has been popular in interpreting the economic success of the East Asian countries. Proponents of this perspective discredit the neoclassical view that market forces alone were the most important dynamic behind these economic achievements. Instead, they credit the state as the key factor of East Asian economic success. This study employs an interrupted time series analysis to examine the validity of the statist perspective on Taiwan's industrial promotion policy. The results suggest that the government of Taiwan has been successful in upgrading the island's industrial structure. This finding supports the statist perspective on development. It does not, however, deny the utility of the neoclassical view since market forces also contributed to the growth of Taiwan's industrial structure.     

Public policy and management issues in Taiwan's development

This symposium examines the experience of Taiwan's development and focuses on the role of government and the importance of public policy and management to the development. The symposium introduction paper consists of three sections addressing the following issues. First, the introduction section offers reasons for studying Taiwan's development experience. The second section provides an overview of the literature related to the relationship between government and economic development. Finally, the last section summarizes the major issues and findings emphasized in each symposium paper.     

Privatizing public enterprises in Taiwan's government-owned banks

The primary purpose of this study is to identify factors affecting the implementation effectiveness of Taiwan's policy to privatize its government-owned banks. The study finds that ideological and sociocultural factors are basically supportive and stable in the privatization process. Nevertheless, institutional, leadership, administrative, and political variables have become major problems that hamper the implementation of Taiwan's policy to privatize its government-owned banks.     

The adaptation of Taiwan's administrative organizations to its economic development

Since moving its seat to Taiwan in 1949, the government of the Republic of China has been able to resume its efforts towards national reconstruction on this island at an accelerated speed. Because of rapid political, economic, and social developments in recent decades, Taiwan's political environment is quite different from what it was previously. In changing from continental to island, national to local, and agricultural to industrial, the public's demands have changed significantly. Under Taiwan's current political and economic situation, what course of development should Taiwan's administrative organizations follow? What kind of self- adaptation to this changing environment should Taiwan's administrative system take? This article describes Taiwan's current administrative environment and operation from a physical and cultural setting. Its ways of adaptation are examined as well must be reasonable and rational. Restated, measures to change the quality of governmental services, governmental expense, the taxes the citizens pay, and the services citizens receive should be taken rationally (¹).     

From technological catch-up to innovation-based economic growth: South Korea and Taiwan compared

This paper sets out to analyse the divergent models pursued by South Korea and Taiwan in regard to technological catching-up and their ongoing transition towards innovation-based economies. It is found that South Korea's former high-debt and chaebol-dominated model inclined it to pursue a Schumpeterian scale-based technological development, while Taiwan's former pro-stability, small- and medium-sized-enterprise (SME)-based model tended to favour its emphasis on a neo-Marshallian network-based technological development. It will be argued that the state's approach to economic liberalisation and firms' demand for capital for technological upgrading are the major factors that have underpinned the adjustment efforts of these two countries.     

The performance of state-owned enterprises in taiwan

This study reviewed the performance of state-owned enterprises (SOEs) in Taiwan. Focusing on the relationship between SOEs and national economic activities and private enterprises, the study revealed some mixed findings regarding the SOEs’ performance. On the one hand, Taiwan's SOEs have contributed to the state's management of economic activities, including assisting in the continuous economic growth, in the transformation and upgrading of the economic structure, and in the stabilization of the economy during the hard economic times. On the other hand, Taiwan's SOEs are found to be less efficient and less profitable than the similar private enterprises. The Taiwan experience, both positive and negative, provides information to SOEs’ researchers and practitioners to understand the overall phenomenon of SOEs and to consider the future development of them.     

Populism in Taiwan: The Rise of a Populist-Democratic Culture in a Democratising Society

Taiwan's democratic transition has emerged alongside a rise of populism. Based on an analysis of post-electoral survey data, it is shown that populist resentments – embodied in such emotion-laden campaign issues as ethnic identity, national identity and a party's image of interest representation and clean politics – have been the most efficient vote-getting appeals in Taiwan's post-authoritarian electoral competition between two major political parties, the Democratic Progressive Party (DPP) and the nationalist Kuomintang (KMT). In Taiwan's democratic transition, mass demands for the ‘indigenisation’ of politics and the people's worry about an ever-increasing military threat from Mainland China have also popularised as well as polarised these populist appeals. As empirical data show, due to its position as the first Taiwanese party with a lion's share of populist advantages, the DPP was able to win the 2000 and 2004 presidential elections. In sum, Taiwan's electoral politics in the past decade have given rise to a kind of ‘populist-democratic culture’, which inclines Taiwanese politicians to bring up populist issues rather than the rational policy debates of an electoral democracy.     

Urbanization,rural land system and social security for migrants in China

Temporary migration due to lack of social security for migrants, rural land tenure insecurity due to frequent land reallocation and abusive land requisition due to lack of functioning land markets are all major policy challenges that China is facing in its yet-to-be finished economic transition. Although there have been intensive studies and various policy recommendations on these issues, most discussions have so far neglected the close interrelationships between these issues and have failed to analyse them in an integrated framework. The paper aims to establish such an analytical framework. By taking into account the impacts of China's characteristics, that is a large developing country in transition, on the country's migration and rural land policies, we propose a policy package to address these challenges in a holistic manner.     

Development Strategy and Export-Led Growth: Lessons Learned from Taiwan's Experience

This paper investigates Taiwan's development strategy from both demand-side (policies that bias production incentives against domestic market demand and toward exports) and supply-side (policies that favour tradable against service or non-tradable sectors) perspectives. In the early stages of Taiwan's economic development, the strategy mix increased overall factor productivity by reallocating resources from the less productive (service or domestic) sectors to the more productive (manufacturing or exporting) ones and helped achieve the goal of reaching global markets through the exploitation of comparative advantage. However, as the Taiwanese economy developed, government intervention turns out to be ineffective because of how it distorts resource allocation, in particular a neglect of services sectors.     

Dependency,the state and class in the neoliberal transition of Taiwan

The remarkable economic growth in Taiwan has served as a model of the developmental state as well as a source of scepticism about neoliberal policy for many less developed countries. However, since the mid-1980s Taiwan has gravitated from its previous statist model to the universally embraced 'market-orientated' restructuring. This study seeks to explain this neoliberal transition. A disaggregated approach is employed to break neoliberalism down into three distinct dimensions: market openness, fiscal austerity, and privatisation of public sector enterprises. The analysis results confirm that: (1) Taiwan's trade dependency on the USA constituted a decisive factor in the state opening its domestic market; (2) distributional politics was forged in a new but weak democracy to incorporate more interest groups in the fiscal expansion of the post-authoritarian era; and (3) the slow but increasingly steady progress of privatisation plans was influenced not by a 'back-to-the-market' idea but by the statist legacy with which bureaucrats attempted to manage public sector enterprises even after they became de jure private firms. The theoretical implications of this transition are discussed in the conclusion.     

Competitive industrial policy and macro performance: Has South Korea outperformed Taiwan?

Taiwan adopted a competitive industrial policy before South Korea but pursued it more cautiously. According to orthodox theory, Taiwan's less interventionist policy should have increased its initial per capita income lead over South Korea. In fact, the income gap narrowed, and income distribution improved relatively in South Korea, casting doubt on the orthodox criticism of South Korean industrial policy. But some qualification of the South Korean success is in order. The South Korean gains were achieved at the cost of greater consumption fore gone and greater concentration of economic power than in the case of Taiwan. Moreover, the crucial post‐1985 Taiwanese economic slow down was partly due to economic maturation as well as to tardy financial reform and to the opportunities created by the Chinese diaspora for Taiwanese firms to invest abroad.     

Democracy,bureaucracy, and state capacity in Taiwan

Taiwan has long had a reputation for effective policy-making based on a highly skilled and educated bureaucracy. In addition, this capacity for technocratic leadership has not resulted in a huge, inefficient bureaucracy since the size of government remains comparatively small. This paper explores the implications of Taiwan's recent democratization for the effectiveness of the country's public administration. On the one hand, democratization reduced the power of regime conservatives, thereby expanding the role of technocrats in the government; on the other burgeoning corruption and policy gridlock have clearly undercut effective policy-making. Thus, the most fundamental challenge for public administration in Taiwan appears to be re-establishing the bureaucratic integrity of technocratic government.     

National Model of Technological Catching Up and Innovation: Comparing Patents of Taiwan and South Korea

This paper discusses different patterns of innovation and their institutional roots in Taiwan and South Korea. By using USPTO patent data as indicators of innovation, this paper finds that while individuals and small and medium-sized enterprises (SMEs) still account for a significant proportion of the patents in Taiwan, the large conglomerates are the major contributors of patents in South Korea. Moreover, although electronics is the sector that has gained most of the patents in both countries, Taiwan's patents are more dispersed while those of its South Korean counterparts are more concentrated. These differences come mainly from the institutional roots in their economic catching-up era.     

Import substitution,export promotion and the structure of Brazil's protection

Following a brief introduction the second section of this paper analyzes Brazil's policy of import‐substituting industrialization (ISI), as it relates to a number of variables suggested by economic theory. The third part investigates the inter‐industry structure of Brazil's protection as it relates to the country's comparative advantage in manufactured goods. Finally, the concluding section takes up certain policy implications suggested by the previous analysis.     

Epistemology and ‘evidence’ in development studies: a review of Dollar and Kraay

This paper examines the constraints on state policy autonomy engendered by globalisation. It evaluates the three major competing hypotheses on the decline in the state's inability to bargain with multinational corporations for the purpose of promoting economic development in light of two case studies of state – firm bargaining. The case studies are drawn from the mining sectors in Argentina and Chile in the late 1990s.     

Business and the Politics of Urban Violence in Colombia

What explains variation in local government policy responses to urban violence? Existing research on the politics of urban violence overlooks the pivotal role that private sector interests play in shaping the public provision of security in major developing world cities faced with conditions of intense violence. I argue that business is a pivotal political actor that mobilizes through powerful private sector institutions to shape policy responses to urban violence in ways that advance its economic interests and preserve its privileged status in local political arenas. The security policy preferences of business vary across economic sectors due to variation in relations to urban space and violence. This cross-sectoral variation in security policy preferences generates both opportunities and challenges for political and societal actors that seek to stem and prevent urban violence. Analysis of puzzling variation in policy responses across Colombia's three principal cities—Medellin, Cali, and Bogota—and over time within each shows that a focus on business can strengthen our understanding of the politics of urban violence and, more broadly, its implications for development.     

Taiwan's Quest for Independence: Progress on the Margins for Recognition of Statehood

This article describes many substantive transformations in politics, national self-identification, and economy Taiwan has undergone over the last decade and offers an alternative approach to expediting de jure state status. The transformations speak to significant progress ‘on the margins’ for attaining international recognition. The disjuncture between liberal democracies clinging to an antiquated ‘One-China’ foreign policy approach and the realties of the situation is widening. An alternative avenue to state recognition acknowledges advancements on the margins that justify Taiwan's recognition by others. At the same time, however, Taiwan must hold self-proclamation in abeyance until the breadth of recognition it receives becomes an irresistible force with which the PRC must reckon. The recent transformations coupled with mainland China's growing force projection capability indicate the time is ripe and appropriate to recognize Taiwan's statehood. The United States would be remiss in its avowed commitment and leadership responsibilities for democratic enlargement by not recognizing Taiwan.     

Network Governance of Private Sector Development Policy Implementation in Singapore

The discussion examines private sector development policy implementation in Singapore, examining the new role of the government's economic development agencies from the point of changing relationships among public and non-state actors in the policy arena. Singapore's model of private sector development consists of an exclusive network of partnerships among economic development agencies and between these agencies and private sector actors, such as business and organized labour, as integral policy stakeholders. As Singapore has moved within the past 15 years towards its articulated goal of becoming a knowledge-based economy and an industrial hub in the Asia Pacific region, the country's model of network governance is undergoing a gradual reconfiguration to include a greater role for local enterprises in the policy process. The changing institutional mechanics of network governance surrounding the new model of private sector development in Singapore are examined, along with the highlights of some implications surrounding this shift.     

A Russia that can say “no”?

A rather consistent picture of Russian domestic politics and foreign policy in Putin's second presidential term emerges from the four works discussed. Elements of authoritarian rule, welcome or at least acceptable to large segments of a public weary of the political and economic disorder of Yeltsin's time, combine with Russia's growing energy-driven economic strength to provide a stable environment, and broad support for the regime. These strengths are expressed externally in a more assertive foreign policy, whose manifestations in both trade and security areas pose challenges for the US, and its EU and NATO allies.