ABSTRACT
This chapter analyzes the relationship between Taiwan's economic development over the last forty years and the international environment of the same period. The essential characteristics of the international environment and its relationship to Taiwan can be examined and understood only within a long-term historical context. The international environment has contributed to the modernization of Taiwan not only in the production and technological sense but more significantly in the internationalization of its political-economic institutions. The chapter also analyzes the evolution of the economic institutions of Taiwan as conditioned by the organizational characteristics of the international environment in the postwar period. Taiwan was no exception to the adoption of an import-substitution strategy, as practiced by the vast majority of the less developed countries, in order to achieve industrialization via a strategy that excluded foreign competition in the domestic market.
