From dual disparities to dual squeeze: The emerging patterns of regional development in Taiwan

Abstract

This paper surveys the different regional development strategies emerging in Taiwan in its current political, institutional, and socio-economic context. It argues that the current strategies reflect and reinforce Taiwan's dual disparities: the persistence of regional economic disparity in spite of increasing GDP, and the institutional disparity of a highly centralized regional economic development planning framework for an economy based on localized networks of small and medium-sized enterprises. In examining the existing strategies, this study finds a dual squeeze of the state-centered institutions on the one hand and local political interests on the other as the central problem in regional development in Taiwan. This has led to the pursuit of environmentally costly strategies for development in logging regions. This paper argues that Taiwan's regional development efforts will not be effective at encouraging endogenous economic growth in the less urbanized regions unless regional-level environmental, economic, and social concerns are recognized and incorporated into development plans. This will likely require the restructuring of the existing institutional and political environment.