Economic Affairs
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Over the past year and more, Taiwan’s political elite has been deadlocked over the question of deepening economic relations with the People’s Republic of China. This controversial issue has led to a standoff between the executive and legislative branches, sparked a frenzy of social activism and a student occupation of the legislature, and contributed to President Ma Ying-jeou’s deep unpopularity.

On October 17-18, the Taiwan Democracy Project at CDDRL, with the generous support of the Taipei Economic and Culture Office, will host its annual conference at Stanford University to examine the politics of polarization in Taiwan.

This conference will bring together specialists from Taiwan, the U.S., and elsewhere in Asia to examine the sources and implications of this political polarization in comparative perspective. It will include a special case study of the Trade in Services Agreement with China that triggered this past year’s protests, as well as a more general overview of the politics of trade liberalization in Taiwan, prospects for Taiwan’s integration into the Trans-Pacific Partnership and other regional trade agreements, and a consideration of the implications for Taiwan’s long-term democratic future.

Conference speakers will include: Chung-shu Wu, the president of the Chung-hwa Institute of Economic Research (CIER) in Taipei; Steve Chan of the University of Colorado; Roselyn Hsueh of Temple University; Yun-han Chu, the president of the Chiang Ching-kuo Foundation; and Thitinan Pongsudhirak of Chulalongkorn University in Bangkok.


Panels will examine the following questions:

1. What are the sources and implications of political polarization in Taiwan, and how have these changed in recent years?

2. How does Taiwan’s recent experience compare to political polarization in other countries in Asia (e.g. South Korea, Thailand) and elsewhere (the US)?

3. To what extent does the latest political deadlock in Taiwan reflect concern over the specific issue of trade with the People’s Republic of China, versus a deeper, systemic set of problems with Taiwan’s democracy?

4. How are globalization and trade liberalization reshaping Taiwan’s domestic political economy, and what are the prospects for forging a stronger pro-trade coalition in Taiwan that transcends the current partisan divide?


The conference will take place October 17-18 in the Bechtel Conference Room in Encina Hall at Stanford University. It is free and open to the public. 

 

Conference Resources

 

Agenda

Speaker Bios

Presentations

Conference Report

Conference Flyer

 

Conference Papers

 

How Cross-Strait Trade and Investment Is Affecting Income and Wealth Inequality in Taiwan by Chien-Fu Lin, National Taiwan University

 

Generational Differences in Attitudes towards Cross-Straits Trade by Ping-Yin Kuan, Department of Sociology & International Program in Asia-Pacific Studies, National Chengchi University

 

Change and the Unchanged of Polarized Politics in Taiwan by Min-Hua Huang, National Taiwan University; Center for East Asia Policy Studies, The Brookings Institution

 

Social Media, Social Movements and the Challenge of Democratic Governability by Boyu Chen, National Sun Yat-sen University, Institute of Political Science 

 

Coping with the Challenge of Democratic Governance under Ma Ying-jeou by Yun-han Chu, National Taiwan University

 

Taiwan’s Bid for TPP Membership and the Potential Impact on Taiwan-U.S. Relations by Kwei-Bo Huang, National Chengchi University, Department of Diplomacy

 

In the Wake of the Sunflower Movement: Exploring the Political Consequences of Cross-Strait Integration by Pei-shan Lee, National Chung Cheng University, Political Science Department 

 

The Roots of Thailand’s Political Polarization in Comparative Perspective by Thitinan Pongsudhirak, Chulalongkorn University; The Institute of Security and International Studies

 

The Role of the United States in Cross-Strait Economic Integration by Chen-Dong Tso, National Taiwan University

 

The China Factor and the Generational Shift over National Identity by Mark Weatherall, Taiwan Foundation for Democracy

 

Taiwan’s Strategy for Regional Economic Integration by Chung-Shu Wu, Chung-Hua Institution for Economic Research

 

Polarized Electorates in South Korea and Taiwan: The Role of Political Trust under Conservative Governments by Hyunji Lee, Institute of Asian Research, University of British Columbia

 

Polarization in Taiwan Politics by Steve Chan, University of Colorado, Boulder

 

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Politics of Polarization in Taiwan: Conference Report
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Appeared in Stanford Report, May 29, 2014

By Clifton B. Parker

The electoral eruption of anti-European Union populism is a reflection of structural flaws in that body but does not represent a fatal political blow, according to Stanford scholars.

In the May 25 elections for the European Parliament, anti-immigration parties won 140 of the 751 seats, well short of control, but enough to rattle supporters of the EU, which has 28 member nations. In Britain, Denmark, France and Greece, the political fringe vote totals stunned the political establishments.

Stanford political scientist Francis Fukuyama said the rise of extremism and anti-elitism is not surprising in the wake of the 2008 economic downturn and subsequent high levels of unemployment throughout Europe. In one sense, the EU elites have themselves to blame, he said.

"The elites who designed the EU and the eurozone failed in a major way," he said. "There was a structural flaw in the design of the euro (monetary union absent fiscal union, and the method of disciplining countries once in the zone)," said Fukuyama, the Olivier Nomellini Senior Fellow at Stanford's Freeman Spogli Institute for International Studies and the Center for Democracy, Development and the Rule of Law, and Research Afflilate at The Europe Center.

Some have argued that the European Union should adopt a form of fiscal union because without one, decisions about taxes and spending remain at the national level.

As Fukuyama points out, this becomes a problem, as in the case of a debt-ridden Greece, which he believes should not have qualified for EU membership in the first place. In fact, he said, it would have been better for Greece itself to leave the euro at the outset of the 2008 crisis.

Still, Fukuyama said the big picture behind the recent election is clear – it was a confluence of issues and timing.

"It is a bit like an off-year election in the U.S., where activists are more likely to vote than ordinary citizens," he said.

Fukuyama believes the EU will survive this electoral crisis. "I think the EU will be resilient. It has weathered other rejections in the past. The costs of really exiting the EU are too high in the end, and the elites will adjust, having been given this message," he said.

Meanwhile, the populist parties in the different countries are not unified or intent on building coalitions with each other.

"Other than being anti-EU, most of them have little in common," Fukuyama said. "They differ with regard to specific positions on immigration, economic policy, and they respond to different social bases."

Ongoing anger

Dan Edelstein, a professor of French, said the largest factor for success by extremist candidates was "ongoing anger toward the austerity policy imposed by the EU," primarily by Germany.

Edelstein estimates that a large majority of French voters are still generally supportive of the EU. For the time being, the anti-EU faction does not have a majority, though they now have much more representation in the European Parliament.

Edelstein noted existing strains among the anti-EU parties – for example, the UK Independence Party in Britain has stated that it would not form an alliance with the National Front party in France.

Immigration remains a thorny issue for some Europeans, Edelstein said.

"'Immigration' in most European political debates, tends to be a synonym for 'Islam.' While there are some countries, such as Britain, that are primarily worried about the economic costs of immigration, in most continental European countries, the fears are cultural," he said.

As Edelstein put it, Muslims are perceived as a "demographic threat" to white or Christian Europe. However, he is optimistic in the long run.

"It seems a little early to be writing the obituary of the EU. Should economic conditions improve over the next few years, as they are predicted to, we will likely see this high-water mark of populist anger recede," said Edelstein.

Cécile Alduy, an associate professor of French, writes in the May 28 issue of The Nation about how the ultra-right-wing National Front came in first place in France's election.

"This outcome was also the logical conclusion of a string of political betrayals, scandals and mismanagement that were only compounded by the persistent economic and social morass that has plunged France into perpetual gloom," she wrote.

Historian J.P. Daughton said that like elsewhere in the world, immigration often becomes a contentious issue in Europe in times of economic difficulties.  

"High unemployment and painful austerity measures in many parts of Europe have led extremist parties to blame immigrants for taking jobs and sapping already limited social programs," he said.

Anti-immigration rhetoric plays particularly well in EU elections, Daughton said. "Extremist parties portray European integration as a threat not only to national sovereignty, but also to national identity.

Edelstein, Alduy and Daughton are all Faculty Affiliates of The Europe Center.

Wake-up call

Russell A. Berman, a professor of German studies and comparative literature, said many Europeans perceive the EU as "somehow impenetrable, far from the civic politics of the nation states."

As a result, people resent regulations issued by an "intangible bureaucracy," and have come to believe that the European Parliament has not grappled with major issues such as mustering a coherent foreign policy voice, he said.

"The EU can be great on details but pretty weak on the big picture," said Berman, who is the Walter A. Haas Professor in the Humanities, Senior Fellow at the Hoover Institution, and Faculty Affiliate of The Europe Center. "It is this discrepancy that feeds the dissatisfaction."

Yet he points out that the extremist vote surged in only 14 nations of the EU – in the other 14, there was "negligible extremism," as he describes it.

"We're a long way from talking about a fatal blow, but the vote is indeed a wake-up call to the centrists that they have to make a better case for Europe," Berman said.

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A man walks past a board displaying provisional results of the European Parliament election at the EU Parliament in Brussels May 25, 2014. | REUTERS / Francois Lenoir
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CDDRL Director Larry Diamond addresses concerns of an intensifying democratic recession in a piece in The Atlantic. Despite recent turmoil in Ukraine and democratic breakdowns in Thailand and Turkey, among others, Diamond emphasizes the critical role economic development, globalization and the growth of civil society will play in the long-run inducement of democratic change worldwide.
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Protesters carry a large banner reading: ''Democracy'' as they participate in an anti-government protests organized by Bahrain's leading opposition Al Wefaq. Sept. 14, 2012. | Hamad I Mohammed / Reuters
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This paper offers a systematic account of political regime changes in Sub-Saharan Africa from 1996-2010. Are democratic transition processes a variance of a singular domestic politico-institutional model (political protest, political mobilization, and democratization), as Michael Bratton and Nicolas van de Walle (1997) claimed, or do other variables matter in democratic transition processes? What conditions create and maintain democracy in Sub-Saharan Africa? Combining qualitative and quantitative methods, this paper examines the development of Sub-Saharan African political regimes, contrasting the pre and post-Cold War periods (1960-1989 and 1996-2010) to understand their determinants. It focuses on the new transformations observed since the beginning of the twenty-first century, assessing recent regime history and examining the factors (political, governance, economic and international) that have contributed to democratic development in some states and autocracy in others. The findings show that democratic transitions are not only the variance of the Bratton and Van de Walle model, which downplays economic and international variables. The process is mainly, but not always, determined by domestic politico-institutional factors. Foreign intervention and economic conditions are also important determinants of democratization in Sub-Saharan Africa in the post-Cold War era.

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Landry Signé
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On October 11-12, the Taiwan Democracy Project at Stanford's Center on Democracy, Development and the Rule of Law is holding its eighth annual conference on the Trans-Pacific Partnership (TPP) and Taiwan’s future development strategy at Stanford University. Hosted in cooperation with the Walter H. Shorenstein Asia-Pacific Research Center, the two-day conference will bring together scholars and policy-makers from around the world to examine the free trade agreement that has the potential to reshape economic relations in the region for the coming decades.

Under current negotiation by 12 Pacific Rim countries, the TPP is a free trade agreement that would enhance trade, investments, innovation and economic development among the TPP countries. Speakers and conference participants will examine the evolution of the TPP with the addition of new countries and its potential new economic and strategic framework for the region. With strong implications for the balance of power in East Asia, the conference will also address the perspective of other key countries in the region including: Japan, Korea, Singapore and the People’s Republic of China.

Speakers will include Vinod Aggarwal, professor of political science and director of the Berkeley Asia-Pacific Economic Cooperation Study Center at the University of California. Aggarwal will present a broad overview of trends in regional trade and trading partnerships as part of the opening panel entitled, “How the Economic andTrading Environment of East Asia is Evolving.”

Hung-Mao Tien, the president and board chairman of the Institute for National Policy Research, a private think-tank based in Taipei, will chair a panel on Taiwan’s development for the next phase of the negotiations. Tien previously served as Minister of Foreign Affairs, Republic of China (Taiwan), the representative ambassador to the United Kingdom and presidential advisor to former President Lee Teng-hui.

The conference will conclude with a two-part panel on Taiwan’s future strategy and the future of the TPP that will include Jeffrey Schott, a senior fellow at the Peter G. Peterson Institute for International Economics in Washington D.C. 

Conference papers are available for review here

All sessions will be held at Stanford University's Bechtel Conference Center in Encina Hall (616 Serra Street) and are free and open to the public. Space is limited so please RSVP here to attend. The latest agenda can be found here

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The paper summarizes and evaluates our current understanding of relations between democracy and economic growth and analyzes the mechanisms of the causality from democracy to growth. Specific features of democracy - civil liberties; elections; protection of minorities; peaceful transition of power; and accountability of the government - have set the framework for explaining the mechanism of influence. These mechanisms include: political stability and predictability; distortion of economic institutions; public sector size; investments in human capital; rule of law; economic inequalities and compulsory redistribution; and investments in physical capital. Although some countervailing effects of democracy to growth have been identified in almost every mechanism specified it is evident that on the margin democracy is more likely to be beneficial to economic growth compared with autocracies. The strongest mechanism of positive effect is rule of law. Reverse causality from growth to democracy was recorded with a policy implication that fast-growing autocracies are not politically sustainable in the long run. Democratization does not produce linear effects to economic growth. Nonetheless, the type of the relation is still unclear. The paper ends with the conjecture that democracy is more important to economic growth at higher levels of economic development.

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The discovery of oil or gas in a poor country is potentially beneficial and, simultaneously, potentially calamitous. While countries could put oil revenues toward building much-needed schools and roads, fixing and staffing health systems, and policing the streets, many resource-rich states fare little better—and often much worse—than their re resource-poor counterparts. Too often public money is misallocated and funds meant to be saved are raided, and citizens pay the price. While there is much discussion about how to respond to windfalls, solutions to counteract potential corrosive effects are highly elusive. Todd Moss leads CGD's Oil-to-Cash initiative, which is exploring one policy option: paying revenues directly to citizens. Under this proposal, a government would transfer some or all of the revenue from natural resource extraction to citizens in universal, transparent, and regular payments. The state would treat these payments as normal income and tax it accordingly—thus forcing the state to collect taxes, and addinng additional pressure for public accountability and more responsible resource management. Todd will talk about the idea, the pitfalls, and some of the emerging models experimenting with aspects of the Oil-to-Cash model.

Todd Moss is vice president for programs and senior fellow at the Center for Global Development, a Washington-DC based thinktank. Moss previously served in the US State Department, worked at the World Bank, and was a lecturer at the London School of Economics.  He is the author of African Development: Making sense of the issues and actors (2011).

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Todd Moss Vice president for programs and senior fellow at the Center for Global Development Speaker Washington-DC based thinktank
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All the theories that explain post-Mao China’s economic success tend to attribute it to one or several “successful” policies or institutions of the Chinese government, or to account for the success from economic perspectives. This article argues that the success of the Chinese economy relies not just on the Chinese state’s economic policy but also on its social policies. Moreover, China’s economic success does not merely lie in the effectiveness of any single economic or social policy or institution, but also in the state’s capacity to make a policy shift when it faces the negative unintended consequences of its earlier policies. The Chinese state is compelled to make policy shifts quickly because performance constitutes the primary base of its legitimacy, and the Chinese state is able to make policy shifts because it enjoys a high level of autonomy inherited from China’s past. China’s economic development follows no fixed policies and relies on no stable institutions, and there is no Chinese model or “Beijing consensus” that can be constructed to explain its success.

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Encina Hall
616 Serra Street
Stanford, CA 94305-6055

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Visiting Scholar

Jessie Jin-Jen Leu a government official from the Republic of China (Taiwan), was a visiting scholar at the Stanford Center on Democracy, Development, and the Rule of Law (CDDRL) in 2012-13. 

Ms. Leu is a senior economic officer who worked in various positions at the Ministry of Economic Affairs of R.O.C. She is experienced on the import management and multilateral trade related to the World Trade Organization (WTO) and Asia-Pacific Economic Cooperation (APEC). Currently she is working as an associate researcher to the National Security Advisor for economic affairs.

Ms. Leu graduated from Taiwan’s Tam-Kang University with a Bachelor's degree of International Trade in 1989. She continued her Master’s degree at University of Wyoming, United States in 1995. Ms. Leu also participated in the WTO negotiation and leadership Program at the Harvard University’s Kennedy School of Government in 2003.

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