Relational Practices and the Marginalization of Law: Informal Financial Practices of Small Businesses in Taiwan

This article looks at one component of Taiwan\u27s development experience, the informal financing techniques used by small businesses, to clarify the interaction between the formal Republic of China (ROC) legal system and the network structure of Taiwanese society. The ROC legal system has supported the economic development process directly by regulating economic activity, and indirectly by facilitating the networks of relationships that also regulate economic activity. The relational structure of traditional, rural Chinese society has survived in a modified form in modem Taiwan, and this modem form selectively blends elements of the modem legal system, networks of relationships, and the enforcement services of organized crime. Ideas such as legal centralism and legal pluralism fail to capture the dynamic of the relationship between the ROC legal system and Taiwanese society, so the idea of marginalization of law is offered as a better description