"Taiwan is a classic case of export-led industrialization. But unlike South Korea and Japan, where large firms have been the major exporters, before the late 1980s Taiwan's successful exporters were overwhelmingly small- and medium-sized enterprise (SMEs). The SMEs became the engine of the entire economy, and by virtue of their accomplishments state-owned and large private enterprises were subjected to the discipline of the global marketplace. Yet for many years the state virtually ignored the SMEs and their role as exporters." "What factors account for the success of the SMEs and their benign neglect by the state? The key was a strict division of labor: state and large private enterprises jointly monopolized the domestic market. This gave the SMEs a free run in export markets. How did this industrial structure come into being? The author argues that it was an unintended consequence of the state's policy toward the private sector and its political strategies for managing societal forces. Indeed, Taiwan's unique industrial structure was shaped by both the witting and the unwitting interactions of the state and the private sector, particularly the state's policies toward the three groups of enterprises. Moreover, as the author shows, this industrial policy was a product of the internal politics of the economic bureaucracy, and the formulation and implementation of economic policy hinged on mechanisms for solving differences within the state."--Jacket.

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