Experimental Regionalism and the Dilemmas of Regional Economic Policy

An earlier version of this paper was presented to the June 1995 OECD international seminar in Paris on Local Systems of Small Firms and Job Creation. Although it does not address contrasts in the corporate governance systems of the major industrial countries directly, it does present in compact form a view of differences in the Japanese, German and Italian, and US production systems as these came into competition in the 1980s, and an argument for why the Japanese variant not only won out, but is being adopted by the other competitors. In my presentation to the conference I will try to explain why this victory is the beginning, not the end, of the story about changes in corporate governance. In particular, I will argue that the form of decentralization pioneered by the Japanese is outstripping the governance capacities of their institutions, and that others, although able to adopt much of Japanese practice within the scaffolding of their current corporate institutions, are just discovering themselves that they cannot monitor by the old means the new production methods that they are introducing. In my presentation, therefore, I will speculate on the architecture of a governance system that does do the job.