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Abstract
This essay attempts to explain the process of the institutional transition of Taiwan, applying the limited and open access orders framework proposed by D.C. North, J. J Wallis and B. R. Weingast. The article analyses economic and political reforms in order to extract the factors positively affecting the process of economic development in Taiwan. The findings indicate that the key factor was the security threat of Communist China. However, other conditions were also important. It should be noted that Chiang Kai-shek’s government could learn from its past mistakes, and it was an outsider regime. Moreover, the USA aid helped to consolidate the dominant coalition. Finally, ethnic tensions between the newcomers from the Mainland and the Taiwanese resulted in the separation of the political sphere from the economic sphere, which was conducive to economic development.
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No potential conflict of interest was reported by the author.
Notes
1 According to You (Citation2013, Citation2015), the economically egalitarian society was crucial for the consolidation of civil society and LAO maturation both in Taiwan and South Korea.
2 At the same time, similar changes took place in South Korea where weakened chaebols were also not able to oppose the government policies of Park Chung-hee (Mo and Weingast Citation2013; You Citation2013).
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Tomasz Legiedź
Tomasz Legiędź is an assistant professor of economics at the Department of Development Economics, University of Łódź, Poland. He received his PhD degree in economics from the University of Łódź. He has published studies on transition economies and China’s economy. He was awarded a Taiwan Fellowship from the Ministry of Foreign Affairs of Taiwan in 2015.