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Assessment of the Linkage Between Economic Development and the Democratization Process in Taiwan


Democratization involves making a service available to everyone. Numerous newly industrialized Asian nations are recognized as developmental states. These states have utilized political power in their governments to shape, direct and inspire the accomplishment of explicit financial goals and are recognized for their increased economic development from the 1960s. While deliberating on the structural conditions which facilitated the success of economic development in such nations, scholars have realized numerous development-related elements.[1]. For instance, the existence of dedicated developmental elites, in addition to a competent financial bureaucracy, has been persistently identified as a crucial component in the remarkable economies because it depicts an independent state tool that is authoritative, repressive, and protected from a subordinate and weak society. From the onset of WW II, the Republic of China in Taiwan has become the most triumphant example in accomplishing rapid economic development and embracing democracy amongst developing nations. Such distinguished performances, generally referred to as the Taiwan experience, have increasingly attracted international attention and reflected the impressive needs in Asia to highly appreciate the view on reality that fifty years after the end of the second world war, most nations are committed to stability and peace to safeguard that there exists a conducive global climate for economic and political development.[2]. The purpose of the paper will be to analyze the relationship between the economic development in Taiwan and its international environment. This theme is relevant since Taiwan’s economic prosperity has closely been associated with its interactions with the eternal world regarding investment, technological transfers, and international trade. The most fundamental aspects of the global environment and the relationship with Taiwan may only be seen in a long-run historical context.

Historical Background

The postwar economic development of various modern less developed countries (LCDs) such as Taiwan has been a course of transitional modifications featured by the end of the prewar agrarian colonialism in addition to an initiation of a period of Modern economic growth. The contemporary epoch was a different way of living taken to the Western communities many years ago in the industrial revolution. In the period, the two most significant force of growth was the outcome of the structural exploration of technology and science and how they were being used in production. The motivation behind the process of transitional growth for Taiwan in the past 40 years has imitated the economic living style of the Western population in the era of modern economic growth. Out of one hundred contemporary LCDs, Taiwan succeeded in the process visible from its entry in 1980 to a different development stage typically defined as an externally and technologically oriented stage.[3]. The unveiling of the new phase shows the termination of the earlier one. The political system that enhanced industrialization was managed in Taiwan by the KMT government headed by Chiang Kai-shek and eventually Chiang Ching-Kuo, his son, by the Military regime regulated by Park Chung-hee. The Taiwanese government is autocratic and anti-communist. It was formed by the KMT forces that fled from mainland China with over a million civilians and military personnel due to their military defeat.

Taiwan’s transition to democracy remained negotiated and incremental. This process started during the early 1980s with a plan by the existing President Chiang Ching-Kuo to terminate the authoritarian rule and ended during the 1996 presidential elections that, for once, were carried out on a popular and direct basis. However, from the beginning till today, the internal political plans in Taiwan have extricable been associated with the Island’s relationship with China. Taiwan remained a prefecture of the majestic Fujian province of Imperial China from the 17th century and officially became a province in 1884. China ceded this Island to Japan after losing the Sino-Japanese war between 1894-95. Throughout WW II, the Republic of China’s government, dominated by the Nationalist party, declared the return of Taiwan to China as the major goal of the war[4]. The Chiang regime trusted that the 50 years of Japanese dominion had taken away China’s political and cultural identity and thus pursued to educate citizens on ways of being Chinese once more. The system of education was a fundamental part of re-acculturalization.

After the republic of China’s international position deteriorated, Chiang Ching-kuo started to move Taiwan toward democracy. He possibly knew that the performance of KMT in enhancing economic development and overseeing elections could maintain its dominance. Partially inspired by the authoritarian rule opponents in the U.S. Congress, President Chiang found the need for a different value-based relationship with the U.S. since the democratic relations, including the mutual defense 1954 treaty, had vanished. Acknowledging that China had ventured into economic reform based on the Taiwan style, he knew that diverting into political reform could maintain Taiwan ahead.

Main Arguments on how the Democratization process led to economic development in Taiwan

Economic tram formation towards democratization.

In its effort to attain protectionism, the government of Taiwan increased Tariffs on foreign goods to promote domestic industries. Generally, it adopted the protectionism policy to safeguard domestic producers and industries against collapse due to the potential foreign products’ influx. The government of Taiwan enacted an act in 1960 that referred to Regulations for encouraging investment. [5]. The policy aimed to encourage foreign overseas industrial development but in a controlled way. This policy would oversee and manage FDIs and enhance the development of locally owned factories. Even though democratization would contribute to growth, the regime was sure that development could diversify the nation towards better economic development. After some protectionism years, major reforms and policies on tariffs and import quotas enacted during the 1940s became pointless. The situation became worse and caused a deficit in the trade of $70 million, the decline of industrial output by 11%, and a 5% reduction in employment in the 1950s[6]. To curb this situation, Taiwan’s government reacted with more aggressive reforms and policies, such as the 19-point Fiscal and Economic reform in addition to the statute to encourage FDI.

Political Reforms – Democratization

Taiwan’s political reforms, formerly perceived as the Republic of China (ROC), started throughout Chiang Ching-Kuo’s reign, which proceeded with the KMT leadership after his father died. Chiang acknowledged Taiwan’s transformation would no longer happen if the government were an autocrat, and to acquire international support, the KMT government anticipated undertaking fundamental political reforms. He appreciated the fact that political repression and oppression that the KMT maintained under his father’s leadership posed a great threat to economic development when the nation yearned to achieve growth and defend itself from its closest rivals, particularly the People’s Republic of China (PRC).

The government under Chiang’s leadership relaxed the earlier political controls initiated by marital laws and began democratizing the Island. First, Chiang’s freedom of speech was increased, which enabled the nation to be ruled by public criticism as the ruling party before anyone could criticize the regime. Chiang enabled opponents and nationalists during his regime to open up their opinions and convene meetings and publish critics in newspapers for the public. The President gave way to the multi-party-political system when he allowed different parties, particularly the Democratic people’s party (DPP), to be in operation after being established in 1986, and it could file candidates in subsequent elections. President Chiang, in 1987withdrew martial law, which had existed for four consecutive decades and enabled Taiwanese voyages to mainland China before any movement between those two political jurisdictions happened. This free movement was significant for economic development.

In 1988, Chiang died, and Lee Teng-hui, his successor, a former vice president, proceeded with the reform program. He provided the political system democratization and empowered the Taiwanese citizens by claiming the anti-KMT opinions that were high throughout martial law. He compelled the long-serving legislators who represented mainland China to surrender and make room for fresh minds in the legislature. The government gave room for other television organizations to emerge and open the nation to a free information flow. He supported and promoted the process of localization. Lee relaxed the Taiwanese language restriction in broadcast media and schools. The Japanese were a rebel language with Taiwan Island.

Taiwan witnessed democracy in 1996 after the first people’s President took over power. The citizens elected the first presidential election in other cases. The President was chosen among other legislatures. This election was a political landmark during the process of democratization. In the opposition candidate in 2000, the opposition candidate assumed the presidential seat and terminated the KMT rule, and created the People’s First Party (PFP). Another peaceful power transfer and democratic election occurred, reinforcing democratization realism in 2008. To date, Taiwan has remained unified by accepting democracy and using law with a strong emphasis on multiparty democracy. This political reform enhanced liberty and government-based economic development. Politicians would compete with the political officers on the promise and framework of political freedom and economic development. Political democratization made an economic development platform. Thus, democratization laid the basis for the nation’s political economy, which was critical for Taiwanese people in realizing development.

Land Reform Policy

Taiwan’s policy on land reforms was a pillar of economic success after being economically repressed for many years. During the 1950s, the government of Taiwan enacted the land-to-the-tiller program, which made many citizens in Taiwan possess the land. The government was concerned with the culmination of the landlord leasing program, which dominated the agriculture sector. Larger parcels were indeed possessed by some landowners who acquired incomes at the poor Taiwan farmer’s expense. Over 50% of the population became farmers, and 70% in 1945 became tenants after they receded from Japan and the Republic of China.[7]. After more than half a century of colonial rule in Japanese hands, Taiwan got familiarized with the land tenure system and tolerated it. The tenants would pay land rates or fees to secure land for those landlords by providing them with over 50% of their yearly harvest. Research shows that on most occasions increased up to 70% the yearly production [8]. Other landlords were perceived as iron leases as they needed a fixed quantity of crops notwithstanding the land’s out in the specific year. Many tenants were in misery and worked throughout the year only to eventually give a substantive percentage of their yield to landowners[9]. When disputes arose, the tenants would lose because the land owners, because of their wealth and social status, typically won arguments against the residents. It was a blatant system that signified social-economic inequality.

The government of Taiwan identified land tenure and landlessness as some of the primary food security and economic prosperity threats to the Island. Consequently, a campaign for a peaceful land revolution got engineered. The government began a plan for land acquisition from land owners. The government employed approaches to achieve this goal by providing for residents and enacting fairness and sanity in the land lease system. The enacted policy comprised of (I) the government’s efforts to sell and lease community land to tenants at cheap prices, (ii) restricting or reducing property lease to37.5% of the annual production in the plantations, (iii) limiting the land size to that an individual would own thus compelling the land owners to auction their land to the government [10]. Such policies assisted the government in reducing the ownership of land by the tenants. The land the government acquired was eventually given to individuals from all over the nation. The Taiwan state leased land to the farmers at an annual production rate of 2.5%[11]. These changes inspired many individuals to venture into farming as an economic activity. Furthermore, the farmers began to seek newer methods of mechanization and farming. Under new frameworks for farming, there was an increased food production since the residents invested a lot of money to purchase agricultural tools and improve farming skills and because of the increased number of individuals in the agricultural sector. Before the land lease was reduced in 1948, the overall output within the rice totaled more than one million metric tons. In 1949 however, after implementing land reforms, the production increased to 1.172 million metric tons, and in 1952, it was 1.517 million metric tons, an increase of 46% production after four years of initiating newer agricultural reforms.

Educational Development

A good system of education is the gateway to economic development. Throughout the Japanese occupation of Taiwan, expanded educational opportunities rapidly diversified in the 20th century first half. After the recession in Taiwan, the KMT government’s priority on mass education and schooling got developed to aid Taiwan in focusing on human resources to industrialize their economy. It rebuilt high schools, primary schools, universities, and colleges and used them to satisfy the country’s educational needs. The regime modified the system of education to look like the U.S. model.[12]. Taiwan dropped the Japanese model and substituted it with the western system. Confucian studies were not a primary need and should have been emphasized more. The KMT raised compulsory education in 1968 to nine years in addition to six years of the elementary level and three at the high school level. Learners from poor backgrounds were offered scholarships. Many students were granted scholarships to study in different American institutions and other schools in western nations. Such students returned home with knowledge and skills that served a crucial role in Taiwan’s economic development and democratization in the China Republic. With educated citizens, it was possible to attain Taiwan’s democratization and economic development. The education system in Taiwan focuses on technology and science disciplines compared to social sciences.

The Japanese invasion of Taiwan

The Taiwan colonization by Japan is also a critical factor to be considered while investigating the relationship between democratization and economic development in Taiwan. During colonial rule, Taiwan forfeited some values and acquired other significant developments. For instance, it was forbidden for Taiwanese citizens to use languages other than Japanese. The goal was to erode their language to accomplish total acculturalization. Japan invaded Taiwan for more than half a century, fifty years between 1895 and 1945. Even though those years were featured in mass misuse of Taiwanese resources to gain Japan’s advantage, some remarkable developments existed to improve Taiwan’s reputation as a nation. Japan helped to modernize Taiwan through industrial growth and infrastructural development. [13]. They constructed hospitals, roads, government buildings, power plants, and farms and could develop financial systems. Such infrastructural developments were the major thing that Taiwan received from Japanese colonization.

The Japanese developed all the financial and land tenure systems utilized by Taiwan before the transformation. The country got well connected to the Southern and the Northern Railroads, and some parts of Taiwan Island were connected by a network of roads connected to the interior. This development situation was fundamental to Taiwan’s transformation and economic growth after Japan annexed it from China. Japan left Taiwan with a good economic foundation which they had already found there. The primary elements for a nation’s growth and development include infrastructure availability and a sound education system.[14]. Infrastructural networks to ease the transport of people and goods from one area to another, sound agricultural systems to support the country, and healthcare facilities to satisfy the needs of healthcare for the Taiwanese population.


Although Taiwan’s political transformation predicts a positive relationship between democratization and a varied and free press, it was only dissident magazines that served a critical role in expressing and organizing political rallies, not news authorized by different authorities. The regime’s democratization would have led to liberalizing of the media sector, and its involvement in political discussions would contribute to democratic consolidation. From the onset, the nationalist government accepted the thriving of private-based newspapers alongside those from the government and ensured that they got controlled by loyal individuals to Guomindang. Such newspapers subject to the market laws separated themselves from the propaganda’s subsidized organs for profitability reasons. The private press was leading for ten years, followed by the government press. They did not support the authorities anymore. After all, they feared reprisals because their directors had similar values besides the concept of ROC, whereby they enjoyed the notables’ status.[15]. The case of Taiwan in the 1960s must interfere with the optimism that may emanate from existing media transformation in the People’s Republic. The commercialization of this sector will inevitably generate the freedom of the press.


Taiwan’s democratization has been enhanced by several factors, ultimately increasing its economic development. The democracy of Taiwan does not emanate from economic growth progress variables. The transformation of the Taiwan regime, media deliberation, and economic development present various factors which enhance this economic shift. Japanese colonialism enhanced the development of Taiwan in numerous aspects, most remarkably in transport, technology, and communication. The Taiwanese development was complicated due to economic and pollical constraints. Taiwan’s case through the economic policy of KMT to safeguard the private sector against being driven by an influential and small elite group obscured a wider gap in common interests between low-class citizens and elites. Even though those regimes would govern under martial law, the initial democratic movements in South Korea did not have allegiance from others from different classes of people, and thus their transition was not as complex as that of Taiwan. An emerging ingredient for the simplicity of alliance formation between various economic classes of people in Taiwan was a raise in questions that pertain to national identity that specifically took the course during the 1970s. It is indisputably the unique aspect of Taiwan’s democratization. Technological developments were seen with the early Japanese colonization that coincidentally, through a better network for transport and communication, enhanced deliberation amongst citizens who pursued political power mostly because of oppression like inequality amongst aboriginals, corruption, and martial law in Taiwan. This, as a result, mobilized people from different classes to lead the Taiwan movement and, ultimately, the DPP and the transformation from the hegemonic autocracy that was one-party based into a multiparty deliberative democracy.


Schafferer, Christian. “Taiwan’s defensive democratization.” Asian Affairs: An American Review 47, no. 1 (2020): 41-69.

Schafferer, Christian. “Political dynasties and democratization: A case study of Taiwan.” Asian Journal of Comparative Politics (2023): 20578911221148830.

Copper, John F. “Taiwan’s Domestic Politics, Economic Development, and National Security, and Their Links to Foreign Policy and Democratization.” In Democratic Governance in Taiwan, pp. 163-180. Routledge

Auklend, Kristoffer Andreas. “What Factors Facilitated the Democratization in Taiwan?.” (2022): 80-94.

Liou, Liang-ya. “Taiwan’s Postcoloniality and Postwar Memories of Japan.” Ex-Position 42 (2019): 169-193.

Bush, Richard, and Ryan Hass. “Taiwan’s democracy and the China challenge.” (2019).

Davies, Daniel. “Educating hypocrisy: private–public partnerships and management of multicultural projects in Taiwan.” Diaspora, Indigenous, and Minority Education 16, no. 3 (2022): 153-168.

Cheng, An-Ting. “Reinventing the industrial land use policy in democratized development states–A comparison of Taiwan and South Korea.” Land Use Policy 112 (2022): 105857.

[1] Schafferer, Christian. “Taiwan’s defensive democratization.” Asian Affairs: An American Review 47, no. 1 (2020): 41-69.

[2] Schafferer, Christian. “Political dynasties and democratization: A case study of Taiwan.” Asian Journal of Comparative Politics (2023): 20578911221148830.

[3] Copper, John F. “Taiwan’s Domestic Politics, Economic Development, and National Security, and Their Links to Foreign Policy and Democratization.” In Democratic Governance in Taiwan, pp. 163-180. Routledge

[4] Copper 169

[5] Bush, Richard, and Ryan Hass. “Taiwan’s democracy and the China challenge.” (2019).

[6] Bush and Ryan 8

[7] Cheng, An-Ting. “Reinventing the industrial land use policy in democratized development states–A comparison of Taiwan and South Korea.” Land Use Policy 112 (2022): 105857.

[8] Cheng 57

[9] Krumbein, Frédéric. “Human rights and democracy in Taiwan’s foreign policy and cross-strait relations.” International Journal of Taiwan Studies 2, no. 2 (2019): 292-320.

[10] Cheng 78

[11] Krumbein 295.

[12] Davies, Daniel. “Educating hypocrisy: private–public partnerships and management of multicultural projects in Taiwan.” Diaspora, Indigenous, and Minority Education 16, no. 3 (2022): 153-168.

[13] Auklend, Kristoffer Andreas. “What Factors Facilitated the Democratization in Taiwan?” (2022): 80-94.

[14] Auklend 85

[15] Liou, Liang-ya. “Taiwan’s Postcoloniality and Postwar Memories of Japan.” Ex-Position 42 (2019): 169-193.


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