The Feminist Economics of Trade

Irene van Staveren, Diane Elson, Caren Grown, Nilufer Cagatay

• Publisher: Routledge
• Year: 2012
• Print ISBN: 9780415436373
• eBook ISBN: 9781135986315
• Topic: Business
• Subtopic: Business General
• Index: Business

Unravelling the complex relationship between gender inequality and trade, this is the first book to combine the tools of economic and gender analysis to examine the relationship between international trade and gender relations.

It brings together fourteen contributions from a variety of economic perspectives, including structuralist, institutionalist, neoclassical and Post-Keynesian by a range of authors including Lourdes Benería, William Darity, Marzia Fontana and Mariama Williams to demonstrate what feminist economics has contributed to the analysis of international trade, through theoretical modelling, econometric analysis and policy-oriented contributions. It includes evidence from industrialized, semi-industrialized, and agrarian economies, using country case studies and cross-country analysis.

Arguing that trade expansion and reduction of gender inequality can be combined, but only if an appropriate mix and sequence of trade and other economic policies is implemented, this book is key reading for all students of international economics, gender and cultural studies and politics and international relations, amongst other disciplines.

1 Introduction

Why a feminist economics of trade?

Diane Elson, Caren Grown, and Irene van Staveren

This book brings together 14 contributions that collectively represent the building blocks for a feminist economics of international trade. It shows how the tools of economic analysis, informed by gender analysis, can be used to examine the interaction of trade relations and gender relations. It is motivated by a concern to reduce gender inequality and increase the power and well-being of poor women in poor countries. It is concerned not only with the impact of trade on gender inequality, but also with the impact of gender inequality on trade.

Gender pay gaps and gender segregation in employment are a key focus, but gender analysis tells us that these labor market inequalities are underpinned by a deep structural inequality between the paid production of goods and services, and the unpaid social reproduction of the labor supply, households, and communities. Feminist economics argues that gender inequality stems from a system of gendered power relations that permeate the whole economy and underpin norms for male and female roles and responsibilities. Individuals themselves absorb these norms, which constrain their choices and structure the ways in which they define themselves. Not only are preferences endogenous, but also the sense of self (Ferber and Nelson 1993).

From the perspective of feminist economics, all economic policies are gendered, in the sense of being shaped by the system of gendered power in which they are formulated and implemented. In some cases this is explicit, with promotion of gender equality an objective (such as labor market policies designed to secure equal opportunities for women). But in many cases the content of gender relations is implicit. On the surface, a policy may appear to be gender neutral because it does not target either men or women. But the policy will be gender biased if it fails to take into account the gender differences that permeate economies (Elson 1995). For instance, trade policies that leave out consideration of the unpaid economy and only include the paid economy will tend to be biased against women, because women have a social obligation to ensure that families are cared for, in a way that men do not (though men do typically have a social obligation to bring money into the family).

This book situates gender inequality concerns within a broader concern for other types of inequality within and between countries. It aims to be of interest to trade and development economists as well as feminist economists. It is relevant to courses on international trade and development as well as to courses on the economics of gender. A feminist economics of trade is necessary because it prioritizes issues that are otherwise neglected and makes visible interactions that are otherwise invisible. It asks whether trade policies that are advocated to address inequalities between countries are sufficient to reduce gender inequality within countries. In doing so, it helps to identify which mix of trade and other policies is capable of addressing multiple inequalities simultaneously. It also inquires about the ways in which gender inequality may limit the gains from trade; for instance, through its impact on the terms of trade, or the process of innovation.

There is a large literature on trade and inequality, but most trade economists who discuss inequality do not engage with gender equality issues. For instance, none of the 13 contributors to John Toye’s edited volume (2003) on trade, poverty, and inequality discuss gender inequality. Among the rare exceptions is Jagdish Bhagwati (2004), who devotes a chapter in his best selling book, In Defense of Globalization, to the question: “Women: Harmed or Helped?” His conclusion is that women in both developed and developing countries are helped by trade liberalization, which increases international competition, in turn weakening labor market discrimination against women and reducing the gender wage gap. However, the evidence he considers is very limited, and he does not cite many scholarly contributions on trade and gender from feminist economists. The study on which he relies for empirical evidence (Black and Brainerd 2004) is critiqued in Chapter 11, and the theory of discrimination and competition on which he relies is critiqued in Chapter 3.

Because feminist economics is concerned with economic power and adopts a critical approach to how economies function, it finds allies among other critical traditions in economics such as Marxist, post-Keynesian, structuralist, and institutional economics. Thus many of the contributions to this book explicitly draw upon heterodox economic theories. One exception is Chapter 7, which deliberately makes the choice to depart as little as possible from orthodox assumptions in modeling the effects of trade, in order to show that even with such assumptions, gender relations matter.

This book aims to give a higher profile to the research of feminist economists on trade and gender, bringing together some key contributions which have already been published in scholarly journals (Chapters 2, 5, 6, 7, 8, 10, and 15) and extending that literature by including some new or expanded studies (Chapters 3, 4, 9, 11, 12, 13, and 14). It incorporates discussion of gender and trade in industrialized (see especially Chapters 11 and 12), semi-industrialized (see especially Chapters 6, 8, and 9), and agrarian economies (see especially Chapter 5).

This book is methodologically pluralist. Trade and gender relations are explored through a number of research strategies: constructing analytical frames (Chapters 2 and 3); building formal models (Chapters 5, 6, and 7); conducting quantitative analysis (Chapters 4, 8, 9, 10, and 11); analyzing private and public systems of trade regulation (Chapters 12 and 14); identifying and using trade-related gender indicators (Chapter 13); and analyzing the macroeconomic policy aspects of trade and gender (Chapter 15). Some of the quantitative contributions focus on single countries (Chapters 7, 8, 9, and 11), while others are cross-country studies (Chapters 4, 10, and 13).

Organization of the volume

This book is organized as follows: Part I discusses how trade and gender issues should be framed; Part II examines the impact of gender inequality on trade; Part III investigates the impact of trade on gender inequality; and Part IV presents feminist approaches to trade policy.

The way in which trade and gender issues are framed structures what questions are asked and what factors are taken for granted, what is included in the analysis and what is left out. In Chapter 2, “Gender and the social construction of markets,” by Lourdes Benería, the frame is provided by the institutional economics of Karl Polanyi whose 1944 book The Great Transformation traces the construction of “market society” in the nineteenth and early twentieth century. This frame directs attention to the way in which the expansion of trade changes the norms of human behavior. Unlike mainstream trade theory that takes the sense of self and the preferences of “rational economic man” as exogenous factors that shape commerce, Polanyi’s institutional economics sees the growth of commerce as a process that helps to produce human beings that compete to maximize their individual gains. Benería agrees with this perspective, but points out that historically far fewer women than men competed in national and international markets, and that norms of female human behavior place more weight on altruism than individualist competition given women’s primary responsibility for social reproduction. She discusses the implications for these norms of the increasing participation of women in national and international markets.

Gender and market competition is also a key theme of Chapter 3, “Mainstream, heterodox, and feminist trade theory” by Diane Elson, Caren Grown, and Nilüfer Çağatay. This chapter compares and contrasts orthodox and heterodox (Marxian and Post-Keynesian) theories of international trade, discussing how gender has been, or might be, incorporated into each type of theory. It concludes that heterodox theory, which argues that trade is governed by absolute rather than comparative advantage, is a better starting point for feminist trade theory. Heterodox trade theory does not assume full employment equilibrium, it emphasizes that there is no mechanism to ensure balanced trade, and it is more consistent with empirical evidence than mainstream theory. The chapter develops the notion of gendered competitive advantage and shows its relation to “low road” and “high road” development strategies.

Part II analyzes how gender inequality can have an impact on trade-related outcomes, such as the terms of trade and composition of output. All three chapters are explicitly located within heterodox economic theory. Chapter 4, “Gender, trade, and development: labor market discrimination and North–South terms of trade,” by Shaianne Osterreich, takes as its starting point the Prebisch-Singer hypothesis that the net barter terms of trade between South and North tend to deteriorate (a hypothesis for which there is ample empirical support). Prebisch (1950) and Singer (1950) argued that the underlying mechanism for this uneven distribution of gains from trade lies in differences in labor markets in the South and North, with workers in the South having less ability to bargain for rises in productivity to be matched by rises in wages. Osterreich hypothesizes that gender inequality is an important aspect of these labor market differences. Using data from a selection of Southern and Northern countries for the period 1975–95, she finds that a decline in the degree of labor market discrimination against women in the South relative to the degree of labor market discrimination against women in the North is associated with an improvement in the net barter terms of trade of Southern countries. She argues that policy makers should be interested in these results: if governments in the South take simultaneous action to reduce labor market discrimination against women, this will help to counteract the tendency of their terms of trade to fall, bringing a larger share of the gains from trade to the South.¹

Chapter 5, “The formal structure of a gender-segregated low-income economy” by William Darity Jr, examines the ways in which unequal gender relations in agriculture interact with attempts to stimulate agricultural exports through devaluation of the currency. He develops a model of gender segregation of labor in smallholder export and subsistence (food) production, based on the empirical literature on sub-Saharan Africa. Both men and women participate in producing export crops, but only women produce subsistence goods. The model describes three different regimes of gendered power: coercion, in which men exercise power over the time women allocate to export crops, the sales of which are controlled by men; cooperation, in which women (guided by social norms of interfamilial behavior) willingly agree to allocate unpaid time to export crops; and compensation, in which women will not work on export crops without being compensated by their husbands. Darity models the effect of a currency devaluation, which raises the price that men get for export crops. Through coercion, cooperation, or compensation, women allocate more time to export crop production. The model illuminates how different regimes of gendered power affect the impact of export expansion. One inference is that if women resist coercion and are unwilling to work without pay, they will not switch into export crop production following devaluation, slowing export expansion (see also Warner and Campbell 2000).

Gender-segregation in production is also a theme of the model presented in Chapter 6, “Macroeconomic effects of reducing gender wage inequality in an export-oriented, semi-industrialized economy” by Robert A. Blecker and Stephanie Seguino. Their model is based on the stylized facts of semi-industrialized economies, in which women produce a good that is largely for export though some is consumed domestically, and men produce a good that is only for the domestic market. Women earn less than men. The model examines the effects on output of an exogenous rise in women’s wages, holding male wages and the exchange rate constant. If export markets are price-elastic, and workers’ consumption of the export good is low, the output of exports is likely to fall, while the effect on production of domestic goods is ambiguous. On the other hand, if export demand is price-inelastic and worker’s consumption of the export good is high, export production will expand; again, the effect on production of domestic goods is ambiguous. But these conditions are less likely to be met. Given the assumptions of the model, reducing the gender-wage gap by raising women’s wages is likely to depress exports and may also depress production of domestic goods. If nominal wages of both women and men are flexible, and there is a crawling peg exchange rate, the effects are more complex and an increase in women’s wages may be combined with export expansion.

Part III, “Impacts of trade on gender inequality,” contains five chapters. Chapter 7 examines the impact of changes in trade policy through the abolition of tariffs (e.g. the liberalization of international trade), while the other chapters focus instead on impacts of changes in the share, level, and growth of exports or imports (the expansion of international trade). This is consistent with the general literature on trade, which relies primarily on data on exports and imports rather than data on the general level of tariffs and subsidies. It is important not to draw conclusions about trade liberalization solely from the studies of the effects of trade expansion (Rodrik and Rodriguez 2000).²

Of all the chapters in this section, Chapter 7, “Modeling the effects of trade on women, at work and at home: comparative perspectives” by Marzia Fontana, uses the widest range of gender equality variables and captures both unpaid work and paid work. This chapter employs a sex-disaggregated computable general equilibrium model to simulate the impact of trade liberalization (through tariff reductions) in Bangladesh and Zambia, two very different low-income countries. The strength of gender norms is modeled by making substitution between male and female labor inelastic. Exchange rate depreciation is assumed to restore balanced trade following tariff reductions. Given these assumptions, the simulations suggest that trade liberalization will increase time spent on producing exports and reduce time spent in unpaid work and leisure. Women’s paid employment and wages rise in both Bangladesh and Zambia, but in Bangladesh (where...

Table of contents

• Cover Page
• Half Title page
• Series page
• Title Page
• Copyright Page
• Contents
• List of Figures
• List of Tables
• Notes on contributors
• Acknowledgments
• 1 Introduction: Why a feminist economics of trade?
• Part I Trade and gender: Framing the issues
• Part II Impacts of gender inequality on trade
• Part III Impacts of trade on gender inequality
• Part IV Feminist approaches to trade policy
• Index