[Editor's Note]

Taiwan is often mentioned as an exemplary case of economic development and democratization. As Taiwanese politics opened its doors to diverse democratic actors from political parties to citizens, the country’s money politics has been activated as well. During the late 1990s, the Political Donations Act was enacted, and the law has since played a vital role in regulating the transparent political finance in Taiwan. The author Chin-en Wu and Yun-han Chu from the Academia Sinica and Asian Barometer analyze the regulatory framework in detail, showing the law’s willingness to reduce the would-be coercive influences of wealthy donors from individuals, corporations, to foreign countries by setting a cap on the amount of money flows into the politics, and specifying possible categories of donors. However, the authors point out that despite these institutional settings, as shown in the Sogo case, violations of the act still prevail. Many corporations have circumvented the rules by borrowing the name of their subsidiaries. In addition, difficulties in proving the quid pro quo relationship between the politics and donors complicate the situation.

※ The following are excerpts from the article. For the full text, please check the attached file at the top of this page.

Often hailed as a successful model of economic development and democratization, Taiwan experienced tremendous success in economic development and democratization in the late twentieth century. The authoritarian ruling party announced political liberalization in 1986, which lifted martial law and allowed for the organization of political parties and the issuance of newspapers. In 1992, Taiwan held its first general election for members of parliament, which marked the beginning of democracy. In the year 2000, it passed the two party-turnover test of democratic consolidation suggested by Samuel Huntington.

Along with political openness, money politics unfolded (Chu 1992). When election expenses are huge and political parties or candidates have insufficient funds, politicians and parties can only rely on substantial donations from enterprises. In order to obtain preferential policies from the government, some companies donate substantially to political parties. In some cases, companies that have financial problems still donate to political parties and candidates to ask for their help to survive.

During the late 1990s, both parties strongly endorsed the enactment of the Political Donations Act. Many drafts were then proposed in the Legislative Yuan, but the legislators could not reach a consensus. After the DPP came to power, it implemented a series of reform policies, including strict bribery investigation, prosecuting elected leaders and civil representatives involved in corruption, and accelerating the speed of investigation. The Political Donations Act was finally promulgated during the Chen Shui-bian administration right before the presidential election of 2004, eighteen years after the beginning of the country’s political liberalization.

■ Chin-en Wu is an Associate Research Fellow at the Institute of Political Science at Academia Sinica, Taiwan. He received his Ph.D. from the University of Michigan. His main research interest includes the impact of economic development on political regime dynamics and how regime type influences economic performance.

■ Yun-han Chu is a Distinguished Research Fellow at the Institute of Political Science at Academia Sinica and a Professor of Political Science at National Taiwan University. He serves concurrently as president of the Chiang Ching-kuo Foundation for International Scholarly Exchange. Professor Chu received his Ph.D. in political science from the University of Minnesota and joined the faculty of National Taiwan University in 1987.

• Typeset by Juhyun Jun, Research Associate
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