As an "index case" of Third-Wave democracies facing existential threat, Taiwan's elections entail important implications for study in comparative politics and international relations. In 2008, three important elections help define the course of Taiwan's democratic development and its relationship with China: the January legislative election, the March presidential election, and a controversial referendum on Taiwan's United Nations entry. This article employs game theory to analyze the impact of Taiwan's 2008 elections on cross-strait relations. It develops an "election game" by examining each principal player's preferences regarding each election. It analyzes Beijing's possible reaction to the potential outcomes, and then examines the actual election outcomes against the model and offers observations on the prospect of cross-strait relations. Overall, the model predicts that cross-strait relations after the 2008 elections will present a historic opportunity, which can be seized or squandered, depending on political leadership.
Key words: China-Taiwan relations, Democracy - East Asia, East Asian politics
Introduction: The Internal-External Nexus
The year 2008 marks a turning point in Taiwan's democratic political development and cross-strait relations. A key reason for this prospect is the momentous elections that took place in Taiwan this year. On January 12, a parliamentary election was conducted under a new, mixed electoral system that selected candidates from single-member districts (SMDs) through the firstpast- the-post (FPTP) method and from lists nominated by political parties. Taking the so-called Duverger's Law (i.e., that a correlation exists between the plurality method and a two-party system) 1 at its face value and hoping to emulate other states that have adopted a mixed electoral system (e.g., Japan),2 many analysts hoped this new electoral system would contribute to a more healthy electoral competition between the two major centrist parties, the Kuomintang (KMT) and the Democratic Progressive Party (DPP). They also hoped this new system would reduce the influence of fringe candidates and money politics that became somewhat common under the old system of single non-transferable vote (SNTV) in multi-member districts (MMDs).
On March 22, 2008, the presidential election, featuring the KMT's and the DPP's former chairmen, decided whether Taiwan's voters wanted a leader who will solidify the "Taiwan identity" or one who promises to improve the economy and ease crossstrait relations. That the identity issue became a key issue in these elections,3 as it had been in recent years, was an important reason why Taiwan's elections entail implications for its external relations, particularly vis-à-vis China and the United States, and for regional stability.4
The electoral link between Taiwan's domestic politics and its external relations was further accentuated by the two referenda regarding the issue of Taiwan's entry into the United Nations that were conducted on the same day as the presidential election. The DPP-sponsored referendum called for the country's entry into the UN under the name "Taiwan." Not to be outdone by the DPP, the KMT sponsored a referendum calling for the country's return to the UN under flexible means.
Various major powers opposed the DPP's UN referendum, most significantly the United States, Taiwan's chief security backer.5 Chinese officials expressed their concerns that crossstrait relations during the lead-up to the March 2008 presidential elections might enter a "high danger period." Passage of DPP's UN referendum would constitute a step toward a declaration of de jure independence of Taiwan.6 For China, such a declaration would be considered a "major incident" as defined in its Anti- Secession Law (ASL), and would call for a response using "non- peaceful means."7 The United States, while stating that it did not oppose Taiwan's holding referenda, tried hard but to no avail to dissuade the DPP government from conducting the most controversial UN referendum, and, failing that, to appeal directly to Taiwan voters. …