The Japanese Financial Crisis, Corporate Governance, and Sustainable Prosperity

Before the Japanese stock market crash of 1990, Japanese industry was a phenomenal success. A recent
unemployment rate of under 4 percent, although low by world standards, is the highest Japan has experienced since
the current mode of calculation began in 1953. Japan’s industrial dominance, sustained prosperity, and
commitment to lifetime employment seem to be in danger. Research Associate William Lazonick, of INSEAD
and the Center for Industrial Competitiveness at the University of Massachusetts–Lowell, takes issue with this
perception. He finds that the Japanese economy is in a better position than the United States to achieve
sustainable prosperity, which he defines as “the spreading of the benefits of economic growth to more and
more people over a prolonged period of time.”