The Economist profiles Gender Budgeting ahead of International Women’s Day

March 3, 2017

     By Duncan Green     

There appears to be some kind of feminist cell operating at the Economist. Without ever mentioning International International Women's Day Images 2017Women’s Day (next Wednesday), they slipped in a wonderful tribute to Diana Elson and her work on gender budgeting, with the header ‘TAX is a feminist issue’. Here it is, (I’ve added a few links). Hope I haven’t blown their cover.

Why national budgets need to take gender into account

Designing fiscal policies to support gender equality is good for growth

Like many rich-country governments, Britain’s prides itself on pursuing policies that promote sexual equality. However, it fails to live up to its word, argues the Women’s Budget Group, a feminist think-tank that has been scrutinising Britain’s economic policy since 1989. A report in 2016 from the House of Commons Library, an impartial research service, suggests that in 2010-15 women bore the cost of 85% of savings to the Treasury worth £23bn ($29bn) from austerity measures, specifically cuts in welfare benefits and in direct taxes. Because women earn less, rely more on benefits, and are much more likely than men to be single parents, the cuts affected them disproportionately.

The government does not set out to discriminate, says Diane Elson, the budget group’s former chair. Rather, it overlooks its own bias because it does not take the trouble to assess how policies affect women. Government budgets are supposed to be “gender-neutral”; in fact they are gender-ignorant. Ms Elson is one of the originators of a technique called “gender budgeting”—in which governments analyse fiscal policy in terms of its differing effects on

Diane Elson. With budget.

Diane Elson. With budget.

men and women. Gender budgeting identifies policies that are unequal as well as opportunities to spend money on helping women and which have a high return. Britain has declined to adopt the technique, but countries from Sweden to South Korea have taken it up.

Ms Elson and her colleagues argue that, once you break down public spending, the opportunities stand out. For instance, if the British government diverted investment worth 2% of GDP from construction to the care sector, it could create 1.5m jobs instead of 750,000. Many governments treat spending on physical infrastructure as an investment, but spending on social infrastructure, such as child care, as a cost. Yet such spending also increases productivity and growth—partly by increasing the number of women in the workforce.

In poorer countries, the bias can be more explicit. When Uganda first looked at its budget through a gender lens, it discovered that little of the spending on agriculture was going to support women farmers, though they did most of the work.

What may sound simply like feminism infiltrating fiscal policy is thus also about efficiency. Gender budgeting is good budgeting, argues Janet Stotsky, who led an IMF survey of such efforts around the world. You don’t have to be a feminist to accept that investing in girls’ education or in women’s labour-force participation will generate a high return on investment.

Such a utilitarian approach appeals to finance ministries in a way that pious talk of “women’s empowerment” may not. Ministries can fail to grasp how their budgets affect women and girls. In developing countries, for instance, investment in clean water and electricity eases housework, freeing time for mothers to earn money and for girls to go to school. Cutting funding may save money in the short term, but when women spend their days fetching water, growth suffers.

There are plenty of examples of the idea in action. In Rwanda spending aimed at keeping girls in school—such as Economist IWD 1
providing basic sanitation—has led to higher enrolment. In India the use of gender budgeting in a state is a better indicator of girls’ school attendance than higher incomes. In South Korea a lack of child care has forced women to choose between work and family. Both female labour-force participation and fertility rates are low—a poor formula for growth in an ageing country. Gender budgeting helped the government design programmes to reduce the burden of care on women. Around the world, safer transport systems can ease the vast, often unseen, burden of violence against women and girls—in medical costs, and lost productivity and labour, as they are prevented from working or learning.

Gender budgeting has won the backing of international financial institutions. Ms Elson once took the IMF and the World Bank to task for their bias, arguing that austerity forced on countries seeking funds in the 1980s imposed heavy burdens on women. Now the World Bank backs gender budgeting. The IMF used not to see promoting sexual equality as its job, but Christine Lagarde, its managing director, now wants gender-budgeting to play a role in the advice it gives to member countries.

Not everything has gone well for gender budgeting, however. Some initiatives have proved half-hearted, short-lived or prey to party politics. Egypt introduced the concept in 2009, encouraged by international donors; when the donors left, it petered out. Australia was the first country to have gender budgeting. But today’s conservative government saw it as left-leaning and anti-austerity and dropped it in 2014, the year after it took office.

gender budgetingGoing by the numbers

Other countries have issued sexual-equality statements and begun tracking data, but have not changed budget allocations. Much of their reluctance can be put down to bureaucratic inertia—and the sheer difficulty of the process of tracking who gets what. Fiscal policy is based on the market economy, which generates cash, and ignores women’s unpaid labour, and the extent to which it limits their work in the market economy. Rather than rethink the system, governments rely on equal-opportunity laws to cut inequality—though the evidence is that they do not.

Professing loyalty to an idea is easier than acting on its implications. “Everyone is keen to take on gender equality if it only means marginal changes,” says Ms Elson. “Root-and-branch changes to thinking about how the fiscal system supports gender equality are much more difficult.”