ABSTRACT
Taiwan's industrial policies were by and large targeted at many medium -and small-sized enterprises in broadly designated sectors. Industrial policies in South Korea and Taiwan differed significantly regarding the selectivity of agents, the specificity of industrial sectors to be promoted, and the intensity of incentives. Using subsidized credit as the primary mechanism to elicit private sector support for industrial policy was in congruence with the exclusive principle in South Korean industrial policy. Taiwan's industrial policy was managed to create and preserve a large number of agents and sectors, or at least avoid privileging the few. Taiwan's industrial policy quite consistently adhered to an inclusive principle. When export promotion began in the early 1960s, the expansion of state enterprises was halted, and banks were instructed to manage export financing rather than support specific industries. Industrial policy in Taiwan was thus aimed at broad functional categories across many sectors.
