Is There a Way Out? Global Competition and Social Reform in Taiwan

Abstract

Globalisation, and its possible impacts, has been widely discussed and debated in Taiwan. The economic technocracies argue for globalisation, as a triumph of the free market and minimum state intervention, through measures of tax cuts, privatisation, deregulation, and so forth, as required to secure Taiwan's economic development in the future. However, rising unemployment accompanied by the new poverty requires more state provisions of social welfare. A strange policy orientation mixing tax cuts with welfare increases is proposed that precisely demonstrates the dilemma of the state between global competition and social reform. This is now a great challenge for Taiwan to balance economic and social requirements.

The East Asian welfare model

“…The incoming government of the Democratic Progressive Party (DPP) in 2000 changed its mind and also declared it would delay the start of a national pension plan, as government finance was not deemed at that time to be able to cope with such a great responsibility (cf. Aspalter, 2002c;Ku, 2002Ku, , 2004Wang, 2003).…”

“…Both have applied a strategy of promising social welfare policies in highly competitive elections, while the realisation of those promises has been rather paltry (cf. Aspalter, 2002c;Ku, 2004). Both the KMT and the DPP belong to the conservative family of political parties, 13 and hence put forward a conservative social policy stand that has also been prevalent in other parts of the East Asian region.…”

Developments in East Asian Welfare Studies

“…The dilemma does not go away with democratization. The new ruling party, the DPP, is making social policy by mixing tax cuts (in response to intensive global competition) on the one hand, with increases in state welfare provision (in response to the pressures of rising unemployment and the new poverty) on the other (Ku 2004). This strange, even contradictory, policy orientation precisely demonstrates the dilemma of the state having to choose between global competitiveness and social reform.…”

Explaining Welfare State Adaptation in East Asia: The Cases of Japan, Korea and Taiwan

“…Huber and Stephens (2001) develop this further and argue that the production regime is associated with the types of welfare regime that a country may have developed. In the East Asian context, a number of scholars have taken a similar approach to develop a link between the two (Holliday, 2000; Ku, 1997;Gough, 2001;Tang, 2000). Nonetheless, much of this is now somewhat out-dated and remains implicit about the interface between the confijiguration of social provisions and national systems of incentives and constrains in the economic production.…”