Differences in uses of rural financial markets in Taiwan and the Philippines

Taiwan and the Philippines had many similarities after WWII, especially in agriculture, but they were quite dissimilar in the early 1990s. Authors argue that Taiwan used its formal rural financial market more effectively than did the Philippines and that this explains an important part of the superior economic performance in Taiwan. The Philippines used financial markets to handle targeted loans and subsidies while Taiwan mostly used these markets to support the efficient allocation of resources. The authors discuss 10 policies that help explain the superior performance of rural financial markets in Taiwan.