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This earns you money, but little else.
Oligarchs, and the like, enjoy spoils.
Many countries want huge investments in them that's true, but IIRC the only disadvantage of not fulfilling it is that coups in the country become easier by a small(ish) amount (may have an effect on purges as well, don't quite remember).
For the country's owner the spoils effect is negative in general. Inequality goes up, GDP goes down and similar while you plunder the economy. In exchange, the control point's owner gets a good chunk of one-time money for each completion of the spoils. And given that it only takes a single development point, that money comes quick.
I generally have an all or nothing strat in regards to spoils, countries I want to keep longterm are on zero spoils but get defended, countries I want to plunder get put on 100% spoils.
- Massive damage to ecosystem
- Significant Increase to inequity
- Significant Decrease to democraty
- Will actually damage the economy of the country on the long term
But that's what will makes you the more money.
The maluses and the money you earn is increased if the country has a ressource region.
So you use it on countries you don't want to keep and just want to exploit till they're dry.
It's also not an all or nothing proposition. It is not a binary where you either are, or are not meeting the desire. Any amount at all reduces the bonus enemies get on attempting a coup, it just zeroes out at the requested amount of spoils. Increased democracy scores, reduced inequality, so on and so forth reduces the amount of desired spoils.
Also like the above poster, I am almost always all or nothing on spoils. Rarely I'll put a couple % points into a long term keeper nation if I'm desperate for cash in the immediate term.
It's almost a tool for a nation you fully intend to get rid of. Almost like taking a nuclear power for the express purpose of decommissioning the nukes and gutting their nuclear program before dumping them. Go ahead and crank maximum spoils there too to extract as much wealth as you can while crippling the economy.