Over the past twenty years, there have been two important trends in Taiwan’s political economy whose contradictory implications provide an important explanation for the dramatic events of 201 4. The logic of each pulls Taiwan in different directions. In this paper, we describe one of the two contending trends of integration and identity. We then discuss the institutional inheritance from the authoritarian era which we believe is a factor that makes policymaking in Taiwan quite difficult. We conclude by analysing how these phenomena interacted to produce the dramatic events of 201 4.