Formation and Transformation of Taiwan's State-Business Relations: A Critical Analysis

Abstract

The aim of this paper is to explore the formation and transformation of state-business relations in post-war Taiwan in order to delineate another important aspect of the Taiwan development experience. The themes to be analyzed are as follows: 1. It is argued that in order to provide a complete picture of the East Asian development experience, a new look at business and its relations with the state and the capitalist world system is quite essential. The essence of this new look lies in its emphasis on how the different sectors within business have ＂responded＂ to state strategies and/or world market opportunities, and later, in turn, ＂reshaped＂ the course of capitalist development in East Asia, of which Taiwan is an integral part. 2. In this paper, detailed portraits of Taiwan's three business sectors-state and party enterprises, big business, and the small and medium sectors-are given. Special attention is put on the respective relations of each sector with the state, and changes of the relative weight of the three distinguishable business sectors. It is then followed by an in-depth analysis of the evolving mechanisms which have been governing the state's relations with the two private business sectors under the KMT's ＂authoritarian corporatism＂ of the post-war era. It is shown that with a ＂dual business structure＂ in the private sector, ＂dual power structure＂ also exists in which big business has exerted more and more political influence on various levels of the state's decision-making bodies. 3. The growing influence of big business on the state through direct and indirect means have been noticeable since the 1980s, when both political liberalization and organized social movements began to take shape. Some political explanations are suggested. Finally, the future prospects of the state-business relations along with the overall shift of the state-civil society power relations are also observed.