Taiwan's export-led industrial development is often presented as a model of how state intervention promotes growth. Others see the same experience as a model of a private enterprise market at work. This study demonstrates that Taiwan policymakers varied their approach to development as circumstances changed. Export promotion of labor-intensive industries, which predominated in the 1960s, was supplemented by efforts to promote import-substituting heavy industries in the 1970s.

In the early 1980s there was a fundamental change in the economic environment as Taiwan's government reduced its active intervention in the economy and created a foundation for development based on information and other high-technology products. Taiwan's economy continued to prosper in the 1990s because policies and systems changed along with conditions.

About the Authors

Li-Min Hsueh is an economist and research fellow at the Chung-Hua Institution for Economic Research in Taiwan.

Chen-kuo Hsu is a Professor of Political Science at Soochow University in Taiwan.

Dwight H. Perkins is the H. H. Burbank Professor of Political Economy at Harvard, and a faculty fellow and former director of the Harvard Institute for International Development.

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