The Taiwanese Development Model Since 1960

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.