[ELI5] How does a newly independent country get money for building and development purposes?
In: Economics
Loans and taxes. In the case if the United States we asked for loans from the enemy of our enemy, France. Now we also did not pay back those loans when asked and that contributed to the French revolution, but that’s another story for another time.
Second the US levied taxes. Mostly on imports and exports. Since the US was a producer of raw materials for production into goods that was the best way to make revenue. However a big boost for the US was being able to sell the land in the Ohio River Valley. It was largely uncontrolled land by any state but was won in the revolution so the federal government seized the land and sold it in plots.
One way is to nationalise companies / industries that were previously owned by foreigners. This tends to upset said foreigners. See Cuba, 1959-2020.
Often when a new country is built its built from another country so the infrastructure is already there. Besides that, no country can gain independence and no revolution can be sustained without third party support giving you the political and military support you need.
If you win the war your benefactors will prop you up for their own gain. You might get money for infrastructure and such as well.
Latest Answers