Can MMT and Developmental Monetary Architecture Be Enshrined in a Constitution?

Modern Monetary Theory (MMT), particularly through scholars such as Randall Wray and Stephanie Kelton, has spent decades explaining how sovereign currencies function. It has paid far less attention to a deeper question. What constitutional structures are necessary to preserve monetary sovereignty itself, particularly in postcolonial states marked by dollarization, weak developmental legitimacy, and external dependency?

In 2024, I intervened directly in this question through a constitutional initiative in the Democratic Republic of Congo (DRC). I submitted a constitutional revision project to the Presidency, Parliament, and Senate arguing that constitutional reform in the DRC could not remain confined to elections, executive power, or institutional design alone. It also had to confront the social contract and the monetary architecture of the state itself. Copies of the proposal were also transmitted to political parties, religious institutions, civil society organizations, and embassies throughout the DRC while television and radio debates across the country sought to broaden the national conversation surrounding monetary sovereignty and constitutional reform. The project remains publicly accessible through RDC Constitution Révision 2024.

The argument was simple. Dollarization is not merely a technical monetary phenomenon or a market preference. In many Global South states, it reflects a weak social contract and a failed developmental monetary architecture. Populations often abandon national currencies because states fail to generate sufficient developmental legitimacy, fiscal credibility, and public trust around the national monetary system.

This essay argues that Global South MMT must increasingly move beyond macroeconomic operations alone and toward constitutional political economy. Monetary sovereignty cannot survive on legal sovereignty alone. It requires constitutional structures capable of linking sovereign monetary capacity to developmental transformation, infrastructure expansion, and long-term social legitimacy. Constitutional Developmentalism therefore reframes money not merely as a legal instrument or accounting capability, but as an institutional relationship continuously reproduced through developmental legitimacy, public trust, and materially experienced reciprocity between the state and society.

The Constitutional Blind Spot in MMT

Modern Monetary Theory transformed debates surrounding sovereign spending, deficits, taxation, and public debt by demonstrating that states issuing their own non-convertible currencies are not financially constrained in the same manner as households or firms. Despite these contributions, one question remains underdeveloped within the literature. What institutional structures are necessary to preserve monetary sovereignty itself across political crises, developmental transitions, and long-term struggles over state legitimacy?

Modern Monetary Theory emerged largely from advanced industrial contexts in which state legitimacy, taxation capacity, and institutional monetary authority were comparatively consolidated. Postcolonial contexts present a different institutional terrain. In many Global South states, the central challenge is not simply whether sovereign monetary capacity exists operationally, but whether the institutional and developmental foundations necessary to sustain public confidence in the national monetary system exist at all.

This question becomes unavoidable in the Global South. Many postcolonial states formally possess constitutions, central banks, taxation authority, and nationally recognized currencies while simultaneously remaining trapped in fragile monetary systems marked by dollarization, external dependency, and weak public trust.

Dollarization as Institutional Judgment

Dollarization is often presented as the natural outcome of market rationality. Citizens and firms adopt foreign currencies because they are more stable, more liquid, or more internationally accepted than domestic currencies. While these explanations contain elements of truth, they remain incomplete. In many postcolonial states, dollarization is not merely a technical monetary preference. It reflects a deeper institutional crisis involving weak fiscal legitimacy, fragmented monetary governance, collapsed public trust, and the absence of a developmental monetary architecture capable of sustaining confidence in the national currency over time.

The DRC illustrates this dynamic clearly. The widespread use of the U.S. dollar did not emerge simply because Congolese citizens irrationally rejected the national currency. It emerged through decades of political instability, inflationary crises, institutional fragmentation, war, weak public service delivery, and limited developmental reciprocity between the state and the population. Under such conditions, foreign currency adoption becomes socially rational. Economic actors seek predictability in an environment where the state has struggled to construct a sufficiently credible social contract around the national currency itself.

Dollarization therefore frequently represents the population’s institutional judgment on the developmental credibility of the state. Citizens do not evaluate currencies only through abstract macroeconomic indicators. They evaluate them through lived experience. They ask whether the state’s mobilization of domestic resources is materially validated by the visible expansion of roads, hospitals, schools, electricity systems, transportation infrastructure, employment opportunities, and broader developmental improvements. When sovereign expenditure appears disconnected from tangible developmental outcomes, confidence in both the state and the currency weakens simultaneously.

This is where the concept of the Social Contract Ratio (SCR) becomes important. SCR attempts to measure the degree to which sovereign expenditure produces visible and materially experienced developmental returns for citizens. Monetary sovereignty cannot be reduced to central banking operations or currency issuance alone. It also depends on whether populations experience the state as developmentally productive and institutionally credible. From this perspective, dollarization is not merely a monetary anomaly. It is a signal that the developmental foundations of monetary legitimacy have weakened. Foreign currencies gradually become substitutes not only for unstable money, but also for weakened trust in the state itself.

Constitutionalizing Monetary Sovereignty

The constitutional proposals introduced in the DRC in 2024 emerged from a broader institutional observation. The Congolese Constitution organizes political authority in considerable detail while remaining comparatively underdeveloped regarding the relationship between monetary sovereignty, developmental allocation, and fiscal legitimacy. Like many postcolonial states, the constitutional framework largely assumes that the existence of a national currency automatically guarantees monetary sovereignty. Decades of persistent dollarization suggest otherwise.

The challenge is therefore not merely issuing a currency. It is constructing institutions capable of making the national currency socially credible and developmentally legitimate over time.

One of the central proposed revisions appeared in Article 2 Alinéa 7:

“Public fees and taxes, as well as the state budget, must be exclusively denominated in the national currency. All transactions, whether for the collection or disbursement of funds by a public institution or on its behalf, must be conducted in the national currency and electronically. Any indexing of public fees, taxes, or budgets to a foreign currency is strictly prohibited.”

The objective is not merely administrative coherence. It is to constitutionally de-dollarize the operational structure of the public sector itself in order to rebuild institutional trust in the national currency. While chartalist and Modern Monetary Theory scholars such as Georg Friedrich Knapp and Randall Wray note that taxation helps establish a currency’s baseline demand, Constitutional Developmentalism argues that this legal obligation cannot sustain long-term monetary legitimacy without an underlying architecture of developmental reciprocity and institutional trust.

In many highly dollarized economies, governments attempt to defend the national currency while simultaneously organizing taxation, contracting, pricing, budgeting, and portions of public administration through foreign currency logic. Such contradictions weaken monetary legitimacy directly within the institutions responsible for defending it. When the state itself behaves as though the national currency lacks sufficient credibility, populations rationally internalize the same judgment. A state cannot sustainably consolidate monetary sovereignty while internally reproducing the behavioral logic of dollarization.

A second major intervention focuses less on currency denomination itself and more on the developmental architecture necessary to sustain long-term monetary legitimacy and move the Social Contract Ratio (SCR) toward parity. Under this arrangement, the constitutional objective is to establish an SCR floor equal to 1, meaning sovereign expenditure generates developmental and social outcomes at least proportionate to the economic obligations, resource mobilization, and legitimacy claims through which the state reproduces monetary authority within society. Article 20 Alinéas 2 et 3 proposed the following:

“Expenditures related to the operation of institutions cannot exceed 50 percent of the budget. Of the remaining amount, 50 percent should be allocated to social spending, 25 percent to infrastructure and 25 percent to investments.

The determination of allocating 25% of the national, provincial, and administrative budget is designated for civil society organizations registered at each respective level.”

The underlying premise is that monetary sovereignty alone does not automatically generate developmental transformation. Sovereign monetary capacity can coexist with elite extraction, weak infrastructure, institutional distrust, and persistent underdevelopment when developmental allocation mechanisms remain structurally weak. The broader objective is therefore to constitutionally direct sovereign expenditure toward visibly experienced developmental outcomes capable of strengthening fiscal legitimacy, increasing public trust, and reinforcing developmental reciprocity between the state and society.

This is where the concept of Monetary Architecture for Development Transformation (MA for DT) becomes central. MA for DT argues that monetary sovereignty must be institutionally linked to visible developmental outcomes capable of reproducing social legitimacy over time, irrespective of the monetary and fiscal instruments through which sovereign expenditure is operationalized. Citizens are more likely to trust national currencies when public expenditure visibly expands roads, hospitals, schools, electricity systems, transportation infrastructure, and productive capacity. From this perspective, the long-term legitimacy of money depends not only on central bank operations, but also on whether constitutional structures continuously transform sovereign monetary capacity into materially experienced developmental reciprocity between the state and society.

The CFA Franc and Postcolonial Monetary Dependency

The CFA franc region illustrates how formal political sovereignty can coexist with externally constrained monetary architecture. As critics of the CFA system such as Ndongo Samba Sylla and Fanny Pigeaud have argued, member states have possessed constitutions, governments, central banks, and juridical sovereignty since independence while continuing to operate within monetary arrangements historically shaped by colonial institutional structures. The result is a configuration in which political sovereignty and monetary sovereignty do not necessarily evolve with the same degree of autonomy.

Defenders of the CFA system often point to exchange rate stability and relatively lower inflation compared to neighboring states that experienced severe monetary crises. Critics, however, argue that externally anchored monetary governance simultaneously constrained monetary flexibility, reinforced dependency, and narrowed the developmental policy space necessary for industrial transformation and long-term economic coordination. The broader issue is therefore not monetary stability alone, but the developmental trade-offs accompanying externally anchored monetary systems.

The CFA case reveals a deeper constitutional paradox within many postcolonial states. Constitutions frequently organized political authority while remaining comparatively silent on developmental monetary architecture itself. Monetary governance remained insulated within technocratic or externally inherited structures only weakly connected to broader constitutional debates surrounding development, fiscal legitimacy, and economic sovereignty. The broader lesson for Global South MMT is therefore straightforward. Formal sovereignty alone does not guarantee developmental monetary autonomy.

Why Global South MMT Must Become Constitutional

Modern Monetary Theory in the Global South cannot remain purely macroeconomic or narrowly policy-oriented. While MMT transformed debates surrounding sovereign spending and fiscal space, postcolonial contexts require a deeper institutional extension of these ideas. In many developing countries, the central challenge is not simply whether sovereign monetary capacity exists in theory. The challenge is whether institutional structures exist to protect, legitimize, and developmentally organize that capacity across time.

In many Global North states, long-standing Social Contract Ratio (SCR) parity or conditions exceeding parity allowed forms of Monetary Architecture for Development Transformation (MA for DT) to become progressively normalized and institutionally embedded to the point of appearing almost as entitlements of modern statehood itself.

In many Global South states, sovereign spending capacity coexists with weak infrastructure, limited industrial transformation, institutional distrust, chronic dollarization, and persistent developmental fragmentation. The problem is therefore not merely insufficient fiscal capacity. It is the absence of constitutional mechanisms capable of protecting monetary sovereignty from elite capture, external dependency, and weak developmental allocation. Monetary sovereignty cannot survive on currency issuance alone. It requires constitutional structures capable of linking sovereign expenditure to visible developmental transformation and long-term social legitimacy.

The broader implication for Global South MMT is therefore straightforward. The future of monetary sovereignty may depend less on proving that sovereign spending is technically possible and more on demonstrating how states can constitutionally organize monetary systems that remain socially legitimate, developmentally productive, and institutionally resilient over time.

Beyond Monetary Technocracy

Dollarization is not simply a monetary phenomenon. In many Global South states, it is the institutional expression of weakened developmental legitimacy, fractured public trust, and postcolonial monetary dependency. A national currency cannot become socially credible when populations experience the state itself as developmentally absent, extractive, or structurally incoherent.

The constitutional proposals introduced in the DRC in 2024 seek to confront this problem directly. The objective is not simply monetary reform. It is to constitutionally reorganize the relationship between sovereign expenditure, developmental allocation, and monetary legitimacy itself. The silence of major political institutions toward these proposals may itself reveal how uncomfortable many postcolonial systems remain with confronting the structural implications of monetary sovereignty. It may also reflect the extent to which orthodox economic assumptions have become culturally embedded within political institutions and society itself, limiting broader awareness of alternative understandings of money, sovereignty, and developmental coordination.

The broader challenge for Global South MMT is now difficult to avoid. Monetary sovereignty cannot survive on central bank operations alone. It requires constitutional structures capable of transforming sovereign monetary capacity into visible developmental legitimacy over time. The future of Global South monetary sovereignty may therefore depend less on technocratic monetary management and more on whether postcolonial states are willing to constitutionally redefine the relationship between currency, development, and the social contract.

Jo M. Sekimonyo
Political Economist, Université Lumumba

The framework discussed in this essay is developed further in the working paper: 

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