||Taiwan is one of the dynamic and mature democratic countries in the world and its democratisation process is becoming one of the interesting issues in political science. To identify the social and economic preconditions of democratisation process in Taiwan, this chapter conducts an empirical analysis to study the validity of Lipset hypothesis in case of Taiwan. The author collects Taiwan's annual data on democracy, education, national income, trade and the international democracy level from 1976 to 2018. Under the control of stochastic trends and deterministic trends, the empirical evidences find that the enrollment rates of primary and secondary education levels have causal effects on Taiwan's democratisation. The average years of schooling and tertiary education enrollment rates have no effect on Taiwan's democracy. The income level is also found not to be a determinant of Taiwan's democratisation. Finally, the degree of openness and waves of international democratisation are not the influential factors of Taiwan's democracy. The quantitative results of this chapter does not fully support the Lipset hypothesis in case of Taiwan.