ABSTRACT
Taiwan was one of the two original miracles – the other being the Republic of Korea – that first convinced many development economists of the superiority of outward-oriented policies over import substitution. But authors such as Wade (1990, 2004) and Rodrik (1995) subsequently challenged the view that the Taiwanese success represented the triumph of outward-oriented policies and reinterpreted it as the outcome of a set of government interventions. While a number of original converts to outward orientation as the preferred development strategy, including Little (1996) and Bhagwati (1999), have responded to these critics, not all of the criticisms have been laid to rest. Consequently, the importance of the Taiwanese experience towards validating the case for outward orientation as a means to sustained rapid growth remains less than fully recognized. The objective of this chapter is to correct this deficiency in the literature.
