Using Fiscal Policy and Public Financial Management to Promote Gender Equality

International Perspectives

Janet G. Stotsky

• Publisher: Taylor & Francis
• Year: 2020
• eBook ISBN: 9781000030624
• Edition: 1
• Topic: Economics
• Subtopic: Economic Theory
• Index: Economics

This book examines how fiscal policy and management can promote gender equality in developing as well as developed countries. Providing an international look at gender budgeting, it draws on countries at different levels of development, with an emphasis on low-income developing countries. It introduces the reader to the main trends in gender equality, the key ideas and rationale of gender budgeting from a fiscal policy perspective and where gender budgeting fits into public financial management.

It offers case studies and other empirical evidence from developing, emerging, and developed countries on what works in using fiscal policy and public financial management to narrow gender gaps in education, health care, access to infrastructure, and economic empowerment. It also provides policy recommendations appropriate to countries at different levels of development.

The reader will gain an understanding of how fiscal policy and public financial management can contribute to gender equality and women's advancement. The book provides a well-grounded set of conclusions and policy recommendations, drawn from evaluation of the evidence. The focus is on low-income developing countries but is combined with a well-rounded look at developing countries, more generally, emerging markets, and developed countries as well.

This book will be a valuable resource for economists and policy makers, particularly those in developing countries still grappling with large disparities between women and men. It will also prove useful to researchers and those who provide technical assistance and aid to countries on fiscal policies and tools for gender equality.

1
Introduction

Gender budgeting is an approach to budgeting that uses fiscal policy and public financial management to promote gender equality, and women’s and girls’ development. Gender budgeting is a worldwide phenomenon. Since its inception in Australia more than 30 years ago, over 80 countries in the world have embraced some version of gender budgeting. The question arises: Why would scholars interested in gender inequality write a book focused on budgeting? The answer is that budgets are the main instrument of governance that reflects the priorities and values of a government. This is all the more critical in developing countries where gender gaps in education, health care, and economic opportunities are still large and the influence of women’s voices at the policy level is still small.

Much of the focus on gender budgeting has been in developed countries, where gender-related reforms have been substantive and longstanding. However, many of the most needed and innovative efforts are in the emerging market and developing countries, including some low-income developing countries where gender inequality is still pervasive. This book adds to the growing literature on gender budgeting by focusing mainly on initiatives in the developing world. We have also highlighted some key efforts in the developed countries, which we feel might offer ideas to developing countries in shaping their own programs and avoiding pitfalls in the future.

A unique feature of this book is that we evaluate the success of past efforts in promoting gender equality and women’s and girls’ advancement, either through gender budgeting or other mechanisms. We discuss, in Chapters 5 – 8, progress made in different regions of the world. We carefully note the key government agencies and advocacy groups that have institutionalized gender budgeting in various countries, and the resulting policy or programmatic outcomes.

Although fiscal policies for gender equality and gender budgeting efforts have largely focused on the needs of women and girls, these efforts are not intended to detract from the important development needs of men and boys. In fact, a few gender budgeting efforts have focused on male-specific needs as well, such as the example of Austria (Chapter 8). In this book, though, we have focused our attention on gender inequality and its effects on women and girls because this is the overwhelming need in countries of the developing world, and the object of almost all of the research and policymaking.

We present important trends in gender equality and women’s and girls’ advancement, grouping countries by their region in the world and by their level of income and development. This sets the stage for focus on key fiscal policy and public financial management practices that support gender budgeting efforts in promoting international goals in equality of education, health care, economic and political opportunities, and quality of life. Next, we survey and evaluate the success of efforts in sub-Saharan Africa, Asia, a selection of middle-income countries, and lastly, a selection of developed countries. We then present econometric evidence, drawn from a study of Indian states, on the efficacy of gender budgeting and other fiscal variables in improving female enrollment in primary and secondary education. We conclude by drawing together key policy and practice implications of gender budgeting efforts with an eye toward the future.

Incorporation of gender budgeting into budget laws and public financial management practices is important to ensure that gender equality efforts are sustained and lead to substantive changes in policies and outcomes. Nonetheless, even a strong legislative framework is not enough, by itself to guarantee success. A few countries have successfully incorporated gender budgeting into performance or program-based budgeting, which is a natural fit because of the thematic and cross-cutting nature of gender budgeting; almost all areas of government spending, including education, health care, and infrastructure, contain room for gender-specific remedies to inequalities and biases against women. Two positive examples in this regard are Rwanda and the Indian state of Kerala, which we highlight in Chapters 5 and 6 on Africa and Asia, respectively. Even without performance or program-based budgeting, government should strive to integrate gender budgeting as a theme across government programs and policies.

Effective gender budgeting efforts rely on the ability of governments to improve their policies and programs over time, and to monitor the results throughout the agencies and departments of government. Unfortunately, only a few developing countries have elevated the monitoring function to the level expected of government oversight or audit offices. Nongovernmental organizations, academic scholarship, and advocacy groups, therefore, must often play an essential role in gender budgeting efforts as do parliaments and their committees, in keeping political leaders and civil servants focused on these tasks, even when they are out of the spotlight. In most countries, subnational governments play a critical role in the provision of essential public services, such as education, health care, and infrastructure, and therefore gender budgeting efforts should extend to these levels of governments as well.

Low-income developing countries face a unique set of challenges, both from a policy and administrative point of view, because of the large gaps in education, health care, and work-related opportunities between females and males in these countries. Thus, gender-related goals should fit appropriately into a budget whose priorities are those related to the United Nations’ Sustainable Development Goals. Cash transfers have been shown in many developing countries to be an effective means to improve girls’ access to education and female access to health care at all ages, as a complement to essential state services. Key public or publicly subsidized infrastructure, such as the supply of electricity and water to households as well as cooking technologies, reduce girls’ and women’s time demands for domestic work, and contribute to gender equality by giving women time to engage in educational and paid work pursuits. It is necessary to identify the ongoing constraints to women’s participation in political and economic life and to develop fiscal policies to help address these constraints, including subsidized lending, tax incentives, and encouragement of female representation in parliamentary government.

Emerging markets and other middle-income developing and developed countries also face challenges of gender inequality, but largely of a different nature. The problems for women in developed countries often relate to a desire to balance workforce participation with rearing of children, and insufficient pensions for aging female populations. Fiscal incentives or public spending to support child and dependent care can ease the burden of unpaid labor in the home, including dependent care, which still falls disproportionately on women. Income security for elderly women is an important challenge going forward, as populations age and women’s more limited participation in the labor market in the past means that they are inadequately covered by existing social security programs. Countries can also encourage female labor force participation by building into their gender budgeting efforts a way to reduce the higher effective tax rate on secondary workers in the household.

It is hard to assess what explicit contribution gender budgeting reforms have made to the positive trends in gender equality in every region of the world over the last 30 years (shown in Chapter 2 figures). Nevertheless, it is clear there is room for more work in reducing persistent gender inequalities. Thus, it is critical to learn from past and existing gender budgeting efforts, which policies and programs actually produced positive outcomes, which did not, and how the successful initiatives can be enlarged and extended. We attempt to address this challenge in this book.

2
Trends in gender equality and women’s development¹

I. Introduction

In the past several decades, all regions of the world have witnessed movement toward greater gender equality and the advancement of women measured by a wide range of economic, social, and political indicators. Nonetheless, in many regions of the world, women remain at a disadvantage compared to men in key areas of economic, social, and political life. Goal 5 of the Sustainable Development Goals, adopted by the United Nations in 2015, calls for gender equality and the empowerment of women and girls over the next 15 years.²

This chapter briefly examines trends in indicators of gender equality and the advancement of women, using evidence derived both from individual indicators and a gender equality index, which aggregates a number of critical indicators. We use our own version of the gender equality index created by the United Nations Development Programme (UNDP), namely, the Gender Development Index (GDI), which assesses gender equality and women’s advancement in terms of components for education, health, and income (UNDP, 1995). We calculate values using this index, going backward in time in a consistent manner, to examine trends over several decades.

Gender equality and women’s advancement in access to education and health care, and in their ability to earn income or participate in the labor market are all commonly accepted indicators of economic and social well-being. In the political realm, women’s participation in elected office and other key political positions are ways of measuring their empowerment. Gender equality indices aggregate a number of indicators and vary in their composition, which explains why different countries have varying measures of equality, depending on the index.

Similar to a number of other recent studies, we find that the trends in individual indicators and the GDI point toward improvement in women’s education, health, economic opportunities, and political empowerment. Nonetheless, progress across the world is uneven.³ When grouped by geographic regions, we observe that South Asia, the Middle East and Central Asia, and sub-Saharan Africa lag behind other regions, even though these regions have all recorded significant improvement in key indicators. When grouped by level of economic development, we see that countries at all levels of development have generally made progress, though there were certain periods during which progress was more rapid. Generally, we observe that developing countries tend to lag behind the developed countries in gender equality and women’s advancement. The gaps between the developed countries and emerging market and developing countries are surprisingly small on some indicators, suggesting that considerable progress is possible even while sizeable income gaps remain.

The remainder of this chapter is as follows. Section II is an overview of the methodology underlying our analysis contrasting individual indicators and composite indices characterizing gender equality. It also discusses some data-related issues. Section III examines trends in key indicators. Section IV explains the derivation of the GDI. Section V explains our time-consistent version of the GDI. Section VI examines the challenges of using indicators and indices to guide policy analysis. Section VII concludes.

II. Methodology: the value of individual indicators versus composite indices, and other data issues

Two ways to capture trends in women’s development and gender equality are through individual indicators and composite indices. Both approaches have distinct advantages and disadvantages.

Gender-specific individual indicators provide information regarding one aspect of women’s development or gender equality. They provide a readily accessible basis for assessing progress and offer guidance to policymakers who want to follow specific development targets. On the other hand, the risk in relying on single indicators is that various related indicators may not always move in parallel in response to specific developments and sometimes may even move in different or inconsistent directions. Thus, for a more comprehensive view, it is useful to create composite indices.

The UNDP was a pioneer in constructing an index to measure women’s development. Its Human Development Index (HDI) is a widely used composite index that aggregates measures of education, health, and income to assess relative human development levels among countries. The GDI was constructed from the HDI to assess the gap between men’s development and women’s development. In recent years, the UNDP has revised the GDI to be a stand-alone index and also created a new index, called the Gender Inequality Index (GII).

The main advantage of gender equality indices such as the GDI and GII is their ability to provide a broader perspective than is possible with individual indicators. However, the different combination of indicators, the weighting of each indicator, and methods of aggregation have all led to a certain degree of arbitrariness in the formulation of the indices. This has led to an ongoing debate regarding the merits of each index.⁴

Analyzing trends in gender equality is also challenging because it requires some value judgments as to what is meant by equality between men and women.⁵ We present trends, rather than levels, to avoid making judgments as to what the precise differences between women and men should be for a particular indicator. We also use relative measures, such as female-to-male ratios, which is the most common approach in the literature, rather than absolute differences between women and men.

We believe that it is reasonable to assume that for variables such as primary or secondary education enrollment and completion rates, equivalence between men and women is a desirable goal. Likewi...

Table of contents

• Cover
• Half Title
• Series Page
• Title
• Copyright
• Dedication
• Contents
• List of figures
• List of tables and boxes
• Authorship
• Acknowledgments
• Executive summary
• 1 Introduction
• 2 Trends in gender equality and women’s development
• 3 Gender budgeting and improved fiscal policies to promote gender equality and women’s advancement
• 4 Incorporating gender budgeting into good public financial management
• 5 Sub-Saharan Africa: a survey of gender budgeting efforts
• 6 Asia: a survey of gender budgeting efforts
• 7 Emerging markets and developing countries: a survey of gender budgeting efforts
• 8 Developed countries: a survey of gender budgeting efforts
• 9 The effect of gender budgeting and intergovernmental grants on gender equality in India: an empirical analysis
• 10 General summary, recommendations, and conclusions
• Glossary
• Index