An evolutionary perspective of policy change behind the economic success of Taiwan

Abstract

The role of the government in the economic development of Taiwan is well documented. This paper provides an evolutionary perspective on the economic management of the government behind the economic success of Taiwan. It develops a 'learning government' model which portrays the Taiwan government as an actor who makes decision under uncertainty. Public agents, like private enterprises, formulate expectations and plans based on their experiences. Assimilating new incoming events, decision makers in the public sector revise their plans, learn to implement projects, experiment new ideas, resulting in policy changes. This perspective is applied to understand the economic management of the Taiwan government since 1950. The upthrust of this argument is that the emergence of a government policy is, to a large extent, biographically determined. This evolutionary approach in understanding a policy change is an alternative to the cost and benefit analysis adopted by orthodox neo-classical public economists.