The Architect of Taiwan's Economic Miracle: Evolutionary Economics of Li Kuo-Ting

Taiwan has been referred to by the World Bank as one of the East Asia's “economic miracles”. Many quantitative models on Taiwan's economic growth have been conducted by neo-classical mainstream economists. However, none of them investigates in detail the thinking of those policy-makers who work behind the economic success of Taiwan. Li Kuo-Ting is generally regarded as the architect of Taiwan's economic “miracle”. In this paper, an evolutionary perspective has been used to understand the economic management of Li Kuo-Ting in particular and the learning government in Taiwan in general. It will be argued that a policy change is a matter of learning, experimenting, and a process of trial and error, involving subjective aspects such as the policy-makers' perception, vision and experiences, and objective factors such as environmental, geographical or international constraints. Furthermore, Taiwan has been able to succeed because its policy-makers are willing to learn and unlearn. Though the right policy has not always been adopted, Taiwan's policy-makers are willing to experiment with a new policy in a pragmatic way. Policies that did not work were either modified or abandoned. Policies that did work were adopted. This paper concludes that Taiwan's economic “miracle” has been the result of a long-term evolutionary process of entrepreneurial vision by the government, careful policy experimentation and market selection.