The Gender Equality and Governance Index and Why
Gender Discrimination is Lethal for Humanity’s Well-Being
The single greatest antidote to poverty and social stagnation is the emancipation of women. Failed economies have been exhaustively analyzed since the early decades of the twentieth century, with serious researchers exploring problems related to the role of education in poverty alleviation, the benefits of macroeconomic stability, the advantages of an open trade system, the consequences of corruption, among many others. But one subject which has tended to be relegated to the periphery when assessing the effectiveness of economic policy has been the role of women.
When gender inequalities are examined from a legal perspective, it becomes obvious that governments virtually everywhere use the law to perpetuate prejudice, deny women their rights, and discriminate against them. As shown in the recent book ew Roman, Equality for Women = Prosperity for All (St. Martin’s Press, 2018), World Bank data from 189 countries indicate that ubiquitous gender inequalities—whether in the home, in education, income, law, political representation, or employment—greatly undermine an economy’s growth potential. Indeed, over the last couple of decades we have learned a great deal about the relationship between gender inequality and economic growth. Let us comment briefly on the empirical evidence.
Multiple channels of discrimination
Inequalities in education, for instance, artificially reduce the pool of talent which societies can draw from; by excluding qualified girls from the educational stream and promoting less qualified boys, the average amount of human capital in a country will be reduced and this will have an adverse impact on economic performance.
The promotion of female education leads to fewer births per women, not only because educated women will have greater knowledge about family planning but also because education creates greater opportunities for women that may be more attractive than childbearing. Lower fertility levels help reduce child mortality and expand the range of educational opportunities available to the next generation. All these factors combine to boost economic growth. Indeed, the effects of lower fertility levels associated with improved female education have long-lasting effects and deliver a “demographic dividend” a couple of decades later. With reduced fertility levels, the working-age population will grow more rapidly than the overall population, boosting per capita economic growth.
A possibly equally powerful driver of economic growth associated with the narrowing of employment gender gaps is what economists call the “bargaining power within families.” Not surprisingly, when women work and earn income as a result, they will be more empowered within the home. Beyond the direct personal benefits to them, the economics literature has identified several other favorable effects such as higher savings, more productive investments, and better use and repayment of credit, all of which are beneficial for economic growth. Other studies have shown that with greater female power within the household there will be higher
Higher legal gender inequality is associated with fewer girls attending secondary school relative to boys, fewer women working or running businesses, and a wider gender wage gap. Source: Women, Business and the Law, World Development Indicators.
investments in the health and education of children, thereby planting the seeds for the accumulation of human capital in the next generation.
Yet another avenue of influence has to do with growing evidence that female workers are less prone to corruption and nepotism than male workers. The evidence comes from a number of sources. The criminology literature, for instance, has long established that male participation in serious crimes at any age greatly exceeds that of females. More recently, a survey of 6,500 companies in the United Kingdom showed clear evidence that companies with greater female participation on boards were less likely to be hit by governance scandals involving bribery, fraud and other factors likely to depress business confidence. So, boosting the employment of women is likely to be beneficial for economic growth through improvements in the quality of governance.
Finally, there is ample evidence that countries that have managed to more rapidly integrate women into the workforce have managed to improve their international competitiveness by developing export-oriented manufacturing industries that have tended to be intensive in the use of women.
This takes us to our next point concerning the political empowerment of women: quotas may be a useful tool for reducing gender disparities. More and more countries are using quotas to boost women’s political empowerment. The evidence in several different studies is quite encouraging. For instance, countries with quotas for women in Parliament show higher female labor force participation rates. Quotas also appear to have an impact on government spending priorities. Other studies reveal that there is greater spending on social services and welfare where quotas are implemented. A study carried out in India looking at data for 265 village councils found that once a quota established a one-third share for female membership, there was considerably more investment in infrastructure that contributed to improve the quality of life for the community, specially for women and children.
We still have a long way to go to fully empower women politically.
Quotas may also have far-reaching and meaningful results for gender equality in other ways. Since 1998, one third of village council leader positions in a large state in India were randomly reserved for women. The study explored the effects of this policy for two electoral cycles, or ten years. The findings are fascinating. Initially public opinion towards female leaders was low, and villagers rated female leaders as less effective than men despite similar performance. However, exposure to female councilors over a ten-year span altered perceptions of gender roles both in society and in the home. The negative bias male villagers held towards the effectiveness of female local leaders was reduced. After ten years, women were more likely to run and win local level political races in villages that had instituted the quotas.
Source: Inter-Parliamentary Union (2019).
There are also attempts under way to increase the participation of women in corporate boards, as several studies have found a positive correlation between companies with women on their boards and their financial success. Nine countries have thus far introduced such quotas: Belgium, France, Germany, Iceland, India, Israel, Italy, Norway, and Spain. The levels range from 20% in France to 40% in Iceland, Norway and Spain. These nations are likely to be joined by others in coming years under the auspices of the EU.
Despite evidence of the benefits of diversity, corporate boards of publicly listed companies nearly everywhere remain male-dominated.
But there is more to the political and economic empowerment of women than ensuring more efficient public spending, or better run corporations. For the past several centuries (if not longer) women have been sidelined from decision making roles in the areas of peace and security. The decisions when to go to war and under what circumstances, when to settle for peace and on what terms, and multiple other such judgments made on matters of geopolitical importance have been overwhelmingly in the hands of men. Recent academic studies suggest that humanity may have paid a heavy price by the marginalization of women from politics and statecraft and that, going forward, their full participation on matter of peace and security will be essential. These views were endorsed in October of 2000 when the UN’s Security Council issued Resolution 1325 reaffirming “the important role of women in the prevention and resolution of conflicts and in peace-building, and stressing the importance of their equal participation and full involvement in all efforts for the maintenance and promotion of peace and security”, and urging “Member States to ensure increased representation of women at all decision-making levels in national, regional and international institutions and mechanisms for the prevention, management, and resolution of conflict.”
Opportunity vs. Outcomes
A couple of final important points. We have begun to move away from an emphasis on the desirability of equality of opportunity – meaning, in this context, the removal of barriers preventing women to vote – to the need to ensure equality of outcomes, or results. If many decades after the removal of restrictions on voting rights, women are still grossly underrepresented in political decision-making bodies, then other means must be used to ensure the speedy removal of the thousand and one hidden barriers which have impeded and curtailed their political empowerment. Radical decisions must be taken, and more effective means of implementation must be found in order to ensure that women can more rapidly and actively contribute to improving social welfare.
We are encouraged by the fact that (1) there is a much greater recognition that the subjugation of women has led to a whole range of economic and social ills and dysfunctions, and (2) moving toward greater gender equality need not be a zero sum game implying loss for men. Gender equality is about moving to a stage in human evolution where being born a boy or a girl does not determine one’s rights/opportunities to develop one’s human potential.
The Gender Equality and Governance Index is currently under construction. In a presentation to be found elsewhere on this page we have identified a number of factors that in our view have a bearing on the state of gender equality in a large number of countries. The reader will see our initial thinking on the importance of the legal framework underpinning the status of women, and on the role played by the multiple restrictions and discriminations faced by women which limit the contributions they can make to global prosperity.
Source: Women, Business and the Law database.