ECONOMIC DEVELOPMENT OF TAIWAN, 1860-1970

which leaves the impression that its use was an unmitigated disaster and would hardly become frequent. Under "chemical fertilizer industry" (p. 81), we find not a discussion of the general development of the industry in China, but a single citation from a 1962 article on the unpropitious beginnings of the phosphate industry. The discussion of "new high-yielding varieties of rice" (p. 99) gives the erroneous impression that China's HYVs, introduced in the early 1960s after several years of breeding work, derived from International Rice Research Institute varieties, such as IR-8, which were not widely introduced until the mid-1960s. The misuse of cited sources leaves few grounds for confidence in the many undocumented assertions of the author, such as the misleading statement that "since 1956 soyabeans have been included under oil crops" (p. 155). Even less forgivable is the use of a slanderous description of the PRC's rural health system, drawn from a right-wing Hong Kong newspaper, as one of two paragraphs on the subject (p. 190); or the dismissal of dianxing diaocha ("survey by models") as the "usual method of party propaganda machinery which sets up the models to be imitated. These models are exceptions which produced outstanding achievements and are said to be 'typical'" (p. 277). In fact, "survey by models" is a stratified sampling method which picks units supposedly representative of low, middle, and high ranges on a scale appropriate to the subject surveyed. In short, the specialist who knows his field will on the one hand be outraged by many of the "abstracts," but on the other will find the wealth of materials and many of the reference features of this dictionary too useful to ignore. The stiff price should deter nonspecialists from a premature investment; they should wait for a thorough revision, which could turn this into a superb reference tool.

Taiwan has, for a long time, been a subject of interest for economists and political scientists alike.Accomodating the 'Nationalist 1 Chinese government-in-exile, the island of Taiwan has enjoyed the status of the showpiece of capitalism during the Cold War period.The United States poured in both economic and military aid until the relations with Mainland China were reestablished in 1971 and the world capitalism no longer required the services of Chiang Kai-shek regime.
Samuel P.S. Ho's work on Taiwan takes an historical-descriptive view of Taiwanese development.Nearly half of the text-the text is 259 pages, the rest of the book is statistical appendix-is devoted to the pre-Second-World-War economic history of the island.Ho is of the opinion that the pre-war history of Taiwan plays a key role in understanding the post-war development.His stand may be justified on these grounds : (i) that Japan, i.e. the 'mother' country of colonial Taiwan until 1945, continued, after a brief interval, to have a predominant effect on Taiwan's economy, although together with the U.S. this time; (ii) that Taiwan has been shaped as a colony for nearly a century, and this fact remained true after the war and to date, albeit in a rather different and more convenient form.Yet it is hard to say that Ho's reasoning would depend on such issues.Taiwan was occupied by Japan in 1895, and this started an era which is described by Ho as follows : Since the end of the nineteenth century, (...) Taiwan has had an open economy, and, through trade and factor movements, its development has benefited from this openness.(...) Taiwan, also demonstrates the advantage of pursuing economic development along lines consistent with one's comparative advantage, (p.248) The virtues of colonialism do not end here.Ho points to other benefits : (...) in the colonial period the economic status or the material welfare of the average Taiwanese improved (...) Be-sides material benefits (...) the most vital was perhaps the exposure of the Taiwanese to scientific techniques, machine technology, and modern business practices, (p.100) The author does, of course, express his reservations on colonialism.Thus he says: "...the Taiwanese benefited much from the Japanese presence, but had the relationship been on a more equitable basis, the benefit would have been so much greater.The Japanese restricted their contact with the Taiwanese to a minimum, and when contacts were necessary they were conducted on a ruler-subject basis, (p.100)" Ho probably thinks that a 'balanced view' can only be provided by including both the 'material benefits' of being a colony or a semicolony and some of its costs side by side.Thus comments like "this stability, however, was at times maintained at considerable cost to individual freedom" are either squeezed into a footnote (p.249) or the acceptance of the bitter fact that a huge amount of highly skilled manpower escapes from the country (pp.258-9) are given the function of balancing the 'virtues' of dependent growth.Ho does not try, however, to incorporate the worldwide political facts into this so called 'open development', thus presenting the Taiwanese experience as a useful example to be followed by other developing countries.
If one succeeds to perceive a study on Taiwan isolating this country of its special conditions, Ho's book offers a very valuable guide.We all know that all good colonies have good statistical data, and Ho presents a considerable amount of time series many of them going back to 1905, and a few even to 1856.He has undertaken relatively little empirical analysis, however.For a study which contains fairly strong conclusions on many issues, one expects more support from econometric methods than is present in Ho's book.
In recent studies on the distribution of income in developing countries, Taiwan has emerged as a miracle.If one believes the available official data, the degree of inequality -measured by Gini coefficient-was halved between 1953 and 1972, and Taiwan became the most egalitarian developing country.Ho's thorough study helps to disperse the clouds around that myth.He shows that both 1953 measurement and 1972 survey have statistical discrepancies, interestingly, bias towards inequality in 1953 and bias towards equality in 1972.Thus exclusions of areas and/or income sources which worked to give opposite pictures of inequality helped a great deal to reduce Gini coefficient from 0.56 to 0.28 during the mentioned period, (pp. 140-146) Taiwan is 'self-supporting' since mid-sixties, that is, she does not need foreign aid.Between 1949 and 1965, the U.S. poured in $425 aid per capita.Considering the fact that Taiwanese per capita income in 1960 was $ 110, it is not difficult to see the relative importance of the U.S. aid programme : average annual per capita aid (approximately $27) which is almost a quarter of 1960 per capita income figure.Alongside with the official aid, Japanese and the U.S.-based transnational companies have been at work in Taiwan for a long time, and what happens there is largely the outcome of their activities.One of the major export industries, electronics and electric appliances, is dominated by these corporations : 55 per cent of fixed capital in this industry belongs to the U.S. -based companies, while the rest is shared by the Japanese, Dutch, and Chinese companies.The pattern of influence by the Japanese is also determined by more than 400 licensing arrangements.These mean that component parts are bought from Japan, marketing is handled by Japanese companies, and credit provided by Japanese banks.The substantial local currency earnings of Japanese firms are ploughed back into joint ventures.
Ho prefers to provide explanations of another kind.He argues that export-promoting policy and iabour-intensive technology, together with a strong agriculture-which, Ho thinks, has historical roots (pp.41 ff) despite the fact that very important institutional and structural changes have taken place after the war (pp.147ff) are to be praised for the Taiwanese success story.Thinking about the other developing countries which have followed export-promoting policies and placed particular emphasis on agriculture and labour-intensive production techniques, but which have not become 'self-supporting' or do not expect to reach that stage in foreseeable future, one feels a little uneasy about such explanations-no doubt, well fitting to the theoretical foundations of the comparative advantages doctrine.