Luiz Carlos Bresser-Pereira
Estudos Econômicos, 37 (3), 2007 p. 463-486. Trabalho apresentado na conferência "A Economia Política da Governança", patrocinada pelo Centre d'Etudes Monétaires et Financières - LATEC (Umr Cnrs), Dijon, 2-3 de dezembro de 2005. (Versão de 16 de Janeiro de 2006)

Global economic disgovernance rather than governance characterizes today the world economy. Two facts substantiate this assessment: the recurring balance of payment crises in developing countries, and the present enormous current account deficit in the United States. The emergent markets' crises are essentially the outcome of a strategy that the North proposed to the South: the growth cum foreign savings strategy. Given the fact that the inflow of capitals evaluate the exchange rate, and that the countries did not face major investment opportunities in the 1990s, such strategy led not to increase in capital accumulation and growth but to large current account deficits and to balance of payment (financial) crises. On the other hand, the US current account deficit is a serious problem. The US is already a debtor country, but adjustment continues to be postponed. Thus, the probability of a soft landing is small. Both sources of instability are related with current account deficits and overvalued currencies. The political economy behind has a name: exchange rate populism, one of the two forms of economic populism (the other is fiscal populism). This is not surprising in developing countries, but could be in a developed country like the United States. Yet, when one considers the political and social retrocession that the American society is experiencing since the end of World War II, it is not.