Monday, March 26, 2007

Chapters 9 and 10: Contending Approaches to the Political Economy of Taiwan

Chapters 9 and 10: Contending Approaches to the Political Economy of Taiwan

Chapter 9: Entrepreneurs, Multinationals, and the State

This chapter looks at Taiwan’s development in light of Evans’s study of Brazil, in which a triple alliance of private capital, MNCs, and the state plays a crucial role. The chapter begins with an analysis of what “dependent development” means and its theoretical history, then turns to Taiwan’s own dependent development through its colonial period, its emphasis on horizontal import substitution, export-oriented industrialization, and export-oriented vertical import substitution—the latter of which saw the full emergence of the triple alliance.

The next section examines the role of local capital, and the different groups of Taiwanese entrepreneurs that evolved and how they interacted with the state and MNCs. Then the role of foreign capital (by way of the American, the Japanese, and the overseas Chinese) is explored. Finally, the state and state capital are examined. The author points out that, contrary to the Brazilian case, in Taiwan, the state has been the key actor in development through planning, investing, and creating a stable investment climate to attract other investors.

In conclusion, it is shown that, due in large part to the structure of its triple alliance—with the state being by far the strongest actor—, Taiwan has avoided most of the adverse effects of MNC penetration.

Chapter 10: Technology Transfer and National Autonomy

The beginning of this chapter examines technology transfer in Taiwan, and the external constraints and internal initiative that effect it. It posits that developing countries want technological development to achieve their economic and political objectives, but radical dependency theorists contend that modern technology is monopolized by the core, leaving the periphery in a position of weakness. More conservative scholars, however, assert that a strong state can play a positive role in developing indigenous technology. In any case, most scholarship in this area has been focused on Latin America, so it is likely that Taiwan’s experience will have been different.

Three main questions addressed in this chapter are 1) how successful has Taiwan been in securing and absorbing advanced technology? 2) have external factors helped or hindered technological progress? 3) have internal factors helped or hindered technological progress?

The three stages of technology learning are introduced and defined as acquisition, adaptation, and innovation. Taiwan is shown to fit into different stages depending on time period and the industry in question, but generally to be dependent on foreign technology, though this is changing (and is certain to have changed quite a bit since our text was published).

The text then goes on to examine the roles of external public and private actors. The most significant external actors, both public and private have been the MNCs and governments of Japan (both in its colonial period and post WWII), and the U.S. As to private internal actors, the focus is on small to medium business whose practices have often been detrimental to technology learning. On the other hand, the Taiwanese state has been a major promoter of technology transfer to Taiwan by way of closer cooperation between government and local firms, extensive government planning and investment, and foreign technology as a catalyst for government efforts.

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