Taiwanese Development Model


According to Thomas Gold Taiwan offers a text book case of an 
elite-led revolution leading to social transformation. The stability 
of hard authoritarianism of the Taiwanese government laid the 
groundwork for Taiwanese development. The KMT's cohesiveness and 
political domination plus the economic development aid supplied by the United States also helped to provide good conditions for Taiwanese 
growth in the beginning. Once the KMT gained control of Taiwan they 
redistributed the land and launched a program of rehabilitation and 
industrialization. This period was responsible for the nationalization 
of many businesses formerly owned by the Japanese and the start of 
industrial production in Taiwan marked by a shift away from 
agriculture to industry. During the early period of industrialization 
Taiwan tried to create domestic markets for its goods. During
the period from 1960 to 1973 Taiwan pursued export expansion in the 
area of industrial goods. During this period U.S. aid directed at 
Taiwan declined as did the islands geopolitical significance. To make 
up for this decline Taiwan focused on increasing its exports. The 
growth of the Taiwanese economy during this period according to Gold 
laid the ground work for the growth of opposition movements and 
loosening of the KMT"S grip on power. According to Gold this was 
because the changes in the Taiwanese economy brought about a middle 
class, a better educated populace, and a dispersion of industry
through out the country. The Period from 1973 to 1984 Gold calls the 
time of industrial upgrading and the emergence of a political 
opposition. During this period Taiwan faced the oil shock, and 
increase in export prices due to a labor shortage that doubled workers 
salaries, a further loss of geopolitical prestige, and the growth of 
dissent and political opposition. Taiwan industrially during this time 
improved the quality and quantity of its exports. 
 The Taiwan industrial model was that of a elite run 
bureaucracy that tightly controlled its nations citizenry in 
authoritarian ways. This authoritarian government was able to 
effectively channel the energies of Taiwan toward modernization. This
authoritarian government became a victim of its own success because as 
living and education standards rose the citizenry demanded a shift 
away from hard authoritarianism. 
 Taiwan is not a very good industrialization model for other 
countries to use outside of East Asia. This is because many of the 
factors that allowed Taiwanese industrialization were unique to 
Taiwan. First, Taiwan was colonized before 1950 by a developmentalist 
power, Japan to which is had close ties even after 1950. Second, 
Taiwan was the recipient of financial aid during its critical early 
years because of a inter-core competition for hegemony between China 
and the United States. Third, Taiwan benefited by having a implacable 
foe with a very different vision of development. Fourth, Taiwan was 
given breathing space following 1949, this enabled Taiwan to revive 
production and consolidate power without foreign powers interfering. 
All these factor make Taiwan unique from other nations that would try 
to copy it. One of the elements that nations should not copy from the 
Taiwan Model according to Gold is Taiwan's harsh authoritarian 
government which was much too strictly authoritarian and had a hard 
time changing as the attitudes of the Taiwanese people changed. 
(Gold's book was published years before the 1996 democratic elections 
in Taiwan) But Gold does say that Taiwan's development model does have 
some lessons that could be copied in other nations seeking to 
industrialize. These are a official commitment to development, land
redistribution, fostering of agriculture, creation of 
extra-ministerial ministries to guide development, strategic credit 
allocation, collection and efficient management of data concerning the 
economy, investment in infrastructure and human capital, and proper 
allocation of foreign assistance. Taiwan's development model was a 
combination of an orwellian state and effective ways of 
industrializing. Taken as a whole the repressiveness of the Taiwanese 
model makes it undesirable for government to adopt; but other aspects 
of Taiwan's industrial policy could prove effective for countries 
outside of the pacific rim.


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