A link between the creation of Special Drawing Rights and the financing of development aid is under discussion in order to meet the developing countries' demands for an adequate supply with international liquidity. This article expounds critically a number of objections raised against this concept.

"In this paper I describe a "monetary" system in which backing is provided for the government's liabilities by way of contingent resort to taxes. The system has some of the features of a commodity money system with a large seignorage spread between bid and ask prices. It is studied within the...