Complexity, Constitutions, Economic Policy and Foreign Aid

Abstract

This article explains the relationships among Constitutions, Sovereign Debt policies and Foreign Aid and systemic risk; and why it’s improper to criticize what is termed “Foreign Aid”. During the last fifty years, Foreign Aid has remained functionally, politically and economically the same as, or very similar to both foreign direct investment (“FDI”) and foreign investment (“FI” – ie. foreign investors’ purchases of both corporate securities and government securities within the context of constitutional limitations of state and federal governments). The cash proceeds of such FI and FDI are used for the same purposes as “traditional” foreign aid. Such FDI and FI have boosted the economies of China, Brazil, Mexico, India, Malaysia and South Korea . This article illustrates the perceived differences by comparing the USA and Nigeria with other countries.