From Reserve Asset to Fiscal Capacity: Rethinking SDRs in Global Economic Governance

 Albertina Nania / December 2025

Global economic shocks increasingly transcend national borders, while fiscal responses remain largely confined within the nation state. Special Drawing Rights (SDRs), formally classified as a reserve asset, display several characteristics typically associated with fiscal instruments, including central issuance and collective decision-making. Their limited impact to date reflects political and institutional constraints rather than technical limitations. Drawing on insights from fiscal federalism, the analysis outlines incremental reforms through which SDRs could support global stabilisation, redistribution, and the financing of global public goods without the creation of new international institutions.

Keywords: SDRs; IMF; Global Economic Governance; Supranational Fiscal Capacity; Global Public Goods; International Monetary System; Fiscal Federalism