ABSTRACT
The Taiwanese case seems to contradict both the inverted U-curve theory and the dependency/world-system perspective. At the outset of the dramatic growth process which began in Taiwan after World War II, the typical signs of underdevelopment were much in evidence—income distribution was badly skewed, illiteracy was high, and life expectancy was short. In marked contrast to many other developing nations, however, Taiwan’s growth was accompanied by a large reduction in income inequality. Major strides were made in improving education, health, and housing conditions. These feats were accomplished during a period in which the trade dependency of the Taiwanese economy increased significantly, with exports increasing from 9 percent of the GNP in 1952 to 49 percent in 1980. In addition, there were massive infusions of foreign investment and aid. Adherents of Kuznets’s thesis would have predicted an increase in inequality during the growth phase, while followers of dependency thinking would have predicted that increased trade dependency, foreign investment; and aid would have had the same impact. In this discussion, drawn from a book on the subject, some of the basic data are presented along with an effort to explain Taiwanese exceptionalism. Primary emphasis is placed upon the public policies that served to stimulate growth while promoting equity.
