This paper explores the development of welfare policies in the City of Taipei from 1995 to 1996, during which the city government was ruled by the DPP's mayor, Mr,Shui-pien Chen. Then main research findings are that the existence of interparty competition did provide strong incentives for the mayor to view welfare policies highly. In order to win the re-election two years later, Mayor Chen asked city officials not only to design welfare programs that manifest the idea of the Western-style welfare state publicized by the DPP, but also to pay attention to the implementation of welfare policies. However, the factor of party competition alone cannot fully explain the unique features and constraints of welfare policies in Taipei. It is suggested that we need to consider the effects of local autonomy, i.e., the autonomy of finance, personnel, the position of the Bureau of Social Affairs, and the view point of local chiefs with respect to social welfare, on the capacity of the city government in the realization of welfare programs.