ABSTRACT
The irrigation system, which extended over more than half of Taiwan's cultivated area, proved valuable in ensuring the equitable distribution of the benefits of green-revolution technology. Linkages between agriculture and the rural-based food processing industry led to a marked spatial dispersion of economic growth. Given the physical and organizational improvement of the environmental infrastructure and the pervasive package of land reform, farmers had the incentives and the tools to improve their situation during the subphase of primary import substitution, during which government policies usually discriminate against agriculture. Meanwhile, the Bank of Taiwan, then functioning as the central bank, succeeded in bringing credit expansion of the commercial banks under its effective control. Extensions of loans to business were carefully coordinated with the overall policies. In ensuing years that share was fairly stable, at least until the onset of export substitution policies again increased the wage share in the 1960s, especially after commercialization.
