Taxation and Economic Development in Taiwan

Documenting the evolution of economic development and fiscal policies in Taiwan over the last four decades, this work explores the effectiveness of specific tax and trade policies. The authors make a major revision to the previously accepted role played by the export processing zones and the protection of domestic producers from foreign competition. The extensive use of duty exemption systems enabled the government to create competition among the exporting firms, and the innovative design of economic policies and administrative systems helped the private sector generate savings, expand investments, and promote exports. This work analyzes how unique fiscal policies and administrative practices were designed to foster the rapid growth and development of Taiwan during this period.