According to Thomas Gold Taiwan offers a text book case of an

elite-led revolution leading to social transformation. The stability

of hard authoritarianism of the Taiwanese government laid the

groundwork for Taiwanese development. The KMT's cohesiveness and

political domination plus the economic development aid supplied by the

United States also helped to provide good conditions for Taiwanese

growth in the beginning. Once the KMT gained control of Taiwan they

redistributed the land and launched a program of rehabilitation and

industrialization. This period was responsible for the nationalization

of many businesses formerly owned by the Japanese and the start of

industrial production in Taiwan marked by a shift away from

agriculture to industry. During the early period of industrialization

Taiwan tried to create domestic markets for its goods. During

the period from 1960 to 1973 Taiwan pursued export expansion in the

area of industrial goods. During this period U.S. aid directed at

Taiwan declined as did the islands geopolitical significance. To make

up for this decline Taiwan focused on increasing its exports. The

growth of the Taiwanese economy during this period according to Gold

laid the ground work for the growth of opposition movements and

loosening of the KMT"S grip on power. According to Gold this was

because the changes in the Taiwanese economy brought about a middle

class, a better educated populace, and a dispersion of industry

through out the country. The Period from 1973 to 1984 Gold calls the

time of industrial upgrading and the emergence of a political

opposition. During this period Taiwan faced the oil shock, and

increase in export prices due to a labor shortage that doubled workers

salaries, a further loss of geopolitical prestige, and the growth of

dissent and political opposition. Taiwan industrially during this time

improved the quality and quantity of its exports.

The Taiwan industrial model was that of a elite run

bureaucracy that tightly controlled its nations citizenry in

authoritarian ways. This authoritarian government was able to

effectively channel the energies of Taiwan toward modernization. This

authoritarian government became a victim of its own success because as

living and education standards rose the citizenry demanded a shift

away from hard authoritarianism.

Taiwan is not a very good industrialization model for other

countries to use outside of East Asia. This is because many of the

factors that allowed Taiwanese industrialization were unique to

Taiwan. First, Taiwan was colonized before 1950 by a developmentalist

power, Japan to which is had close ties even after 1950. Second,

Taiwan was the recipient of financial aid during its critical early

years because of a inter-core competition for hegemony between China

and the United States. Third, Taiwan benefited by having a implacable

foe with a very different vision of development. Fourth, Taiwan was

given breathing space following 1949, this enabled Taiwan to revive

production and consolidate power without foreign powers interfering.

All these factor make Taiwan unique from other nations that would try

to copy it. One of the elements that nations should not copy from the

Taiwan Model according to Gold is Taiwan's harsh authoritarian

government which was much too strictly authoritarian and had a hard

time changing as the attitudes of the Taiwanese people changed.

(Gold's book was published years before the 1996 democratic elections

in Taiwan) But Gold does say that Taiwan's development model does have

some lessons that could be copied in other nations seeking to

industrialize. These are a official commitment to development, land

redistribution, fostering of agriculture, creation of

extra-ministerial ministries to guide development, strategic credit

allocation, collection and efficient management of data concerning the

economy, investment in infrastructure and human capital, and proper

allocation of foreign assistance. Taiwan's development model was a

combination of an orwellian state and effective ways of

industrializing. Taken as a whole the repressiveness of the Taiwanese

model makes it undesirable for government to adopt; but other aspects

of Taiwan's industrial policy could prove effective for countries

outside of the pacific rim.