ABSTRACT
Taiwan has been a star performer economically in the post-war period. How can we explain its growth? Recently, the dominant discourse in Taiwan attributes Taiwan’s economic miracle to either the Japanese colonial legacy or the American intervention. It is argued here that these two explanatory factors are only supplementary ones. Though the Japanese colonialists laid the foundation for subsequent modernisation, Taiwan was still a typical colonial economy, exporting mainly sugar and rice to Japan, in 1945. The US aid provided much-needed resources, but it was up to the Nationalist government to build up the infrastructure to make post-war growth possible. Fresh from its spectacular failure on the Mainland, the Nationalists were resolved to maintain macroeconomic stability, implement land reform and universal primary education and use industrial policy to promote indigenous industrialisation. Highly motivated officials with experience in economic planning on the Mainland, especially the well-trained staff of the National Resource Commission, established the crucial bureaucratic organisation to practise effective industrial policy to promote industrialisation. The locals, who were discouraged from engaging in modern industries during the colonial era, now found the environment inducing. Some successful cases of post-war industry development are discussed to show the effects of improved infrastructure, as well as various technology traditions and industrial policies.
