The author argues that the recurring balance of payment crises in developing countries and the enormous current account deficit in the United States are proofs of global economic disgovernance. Both these sources of instability are related with current account deficits and overvalued currencies; results of what political economists define as exchange rate populism. Such a policy is not surprising in developing countries, but it could be so 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.

October 13, 2008.

This paper was originally presented to the conference "The Political Economy of Governance" sponsored by the Centre d’Etudes Monétaires et Financières - LATEC (Umr Cnrs), Dijon, December 2-3, 2005. This is a revised version of January 15, 2006.