As already stated, gender has only recently become a topic for exploration by the IMF. Very early work in 1998 by the IMF Fiscal Affairs Division saw the Economic Issues series focus on the interplay between economic policy and equity. While equity is seen to have a moral basis or be a worthy goal itself, it is also seen to be an important consideration for policy making that is attempting to reduce both absolute and relative poverty. Income inequality has risen over the past decades to its highest levels with an ever-greater amount of wealth gains residing with the wealthiest one percent of the world’s population. While gender was not a topic at this conference, this 1998 series of papers8 exploring concepts of equity in the context of globalisation and the role of the IMF was certainly notable. Additionally, it allowed for the scene to be set to further explore how the IMF has most recently moved towards an expansion of its mandate to include other forms of equity such as gender equality. This move
8 http://www.imf.org/external/np/fad/equity/index.htm Summary of the conference focus
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has been acknowledged by Elson (2002) who highlights that the IMF has ‘become more concerned with social policy in recent years’.
In their IMF Working Paper Heller and Leuth (2003) explored the ability of the IMF to contribute to the MDG’s gender goals. They highlight how this might seem an unusual focus for an IMF working paper but move onwards to point out the direct relationship between tackling issues of gender inequality and poverty reduction and how this is of critical importance and relevance to the IMF. Heller and Leuth (2003) draw attention to how improvements in the health and education of women are instrumental in reducing fertility rates and increasing the labour force participation of women. They particularly focus upon how increased education for women contributes to economic growth. These factors are of great relevance to the IMF and as such Heller and Leuth (2003) stress the need for the IMF to play a strong role in supporting countries to achieve these goals. Heller and Leuth (2003) highlighted the very practical measures that the IMF was at the time taking that indirectly promoted the realisation of the MDG’s. These included helping prevent financial crises in developing countries which ultimately have a disproportionately negative impact on women, providing technical assistance regarding budget structuring to ensure that increased social spending reached the intended groups, and their move to increase lending within the poverty reduction programmes designed for low-income countries.
Cognizant of the limited mandate of the IMF Heller and Leuth (2003) directly ask what more can the IMF do to ensure that the MDG’s around gender equality is realised. For an IMF working paper, this is a very direct call out to the IMF to focus upon a topic which had previously received little or no attention. Heller and Leuth (2003) see the PRSPs (Poverty Reduction Strategy Papers) providing an avenue to promote ‘policies that differentially favour women and girls’. While they acknowledge the challenges around translating medium-term goals into national budgets, they see the PRSPs providing opportunities for discussion and a framework to explore how these two can interconnect. Heller and Leuth (2003) also see value in having a gender focus when shaping macroeconomic policy pointing out that the economic contributions of women are underestimated due to the high percentage of women working in the informal sector, or in unpaid work, or in subsistence farming and the fact that these
‘nonmarket’ activities are not modeled. Failure to model these ‘nonmarket’ activities results in a skewing of policy needs and a failure to define and implement optimum policy. Heller and Leuth (2003) also call for the IMF to explore the value of gender sensitive budgeting and encourage states to provide social safety nets targeted at girls and women. While Heller and Leuth (2003) marry this progressive approach with a pragmatic awareness of the limitations and mandate of the IMF by highlighting risks and tensions that are likely, they commit strongly to the belief that the IMF must address ‘gender-related biases in our macroeconomic analyses and policy advice’. This is a defining paper contributing to the journey that the IMF has taken in the recent years to broaden its thinking and approach regarding gender equality.
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An important discussion in political economy is the relationship between gender equality and economic growth and the relevance of gender differences to macroeconomic policy. Stotsky’s (2006a) IMF working paper is another milestone in the journey of gender policy within the IMF and explores these very topics. Stotsky (2006a), highlights early on how gender differences in behaviour can have implications for the macroeconomy, in particular, around aggregate consumption and investment decisions. For example, Stotsky (2006a) draws upon Blumberg (1988) Bruce (1989), Thomas (1997), World Bank (2001) and Quisumbing (2003) to illustrate how women tend to spend more of the available income of the development of their children and more on necessities than men do. Additionally, Stotsky (2006a) highlights further gender differences in saving tendencies between women and men (Seguino and Floro, 2003) where women are found to save more than men possibly reflecting their role as ‘home-builders’. Research also points towards gender differences in risk preferences for investments, with women tending to be more risk averse than men (Goldstein, 1999) and have better credit ratings. Such differences are crucial, not only from a family perspective but also from a community and societal development perspective. Stotsky (2006a) rightly points out how important these gendered differences in economic prioritisation are and that fiscal and monetary policies are ‘rarely formulated with these gender differences in mind’. Stotsky (2006a) believes that these findings illustrate the potential for ‘systematic differences’ in financial behaviour between men and women. Such gendered differences have implications for policy makers dealing with macroeconomic issues as Stotsky (2006a) points out that macroeconomic conclusions can be drawn from modelling systemic and aggregated microeconomic behaviours. If issues such as risk and priorities are managed very differently based on gender, there are implications for the success of IMF programmes and the ongoing balance of payment situation of an affected country. If different macroeconomic decisions are required to ensure stability and continuity of a stable and efficient state, then it is in the interests of the IMF to promote measures that facilitate this outcome and stimulate situations which may lead more positive macroeconomic outcomes.
Stotsky (2006a) also stresses the bi-directional and positive relationship between greater education and social opportunities for women and economic growth. This is an essential point to Stotsky (2006a) as failure to invest in women’s education, healthcare and employment, not only stymies their own personal development but importantly, it hinders economic growth.
Such an outcome is again counter to one of the main goals of the IMF – to stimulate economic growth. Stotsky (2006a) highlights the gaps in the literature that examines the impacts of IMF programmes upon women. By 2006, there still remained a focus upon the effect of the SAP’s of the 1980’s and the prevalence of qualitative cast study research. She stresses the need for quantitative studies which focus upon later IMF programmes and, also the need for longitudinal studies that can ascertain the long-term effects of these programmes and calls for of a systematic investigation on the impacts of IMF programmes from a gender perspective. Stotsky (2006a) uses these findings and literature gaps to present, not only a strong case for greater gender equality, but importantly, a strong argument for how the
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incorporation of gender-based differences into economic modeling can be very useful, particularly as current research supports the ‘premise that gender inequalities lead to slower growth’. Most importantly for the journey of gender policy within the IMF, Stotsky (2006a) concludes that policy advice should be designed to further reduce gender inequalities and that the IMF should contribute to this through technical assistance.
Stotsky (2006b) compliments her exploration of gender and its relevance to macroeconomic policy with another 2006 IMF working paper examining the concept, relevance and appropriateness of gender budgeting. Stotsky (2006b) begins by highlighting how gender budgeting can be used to systematically examine the impact of budgets and policies upon women with the aim of addressing inequalities between men and women. Pointing out that gender budgeting is outside of the mainstream approaches in budgeting, Stotsky (2006b) uses her paper to change this and place gender budgeting ‘squarely within the mainstream’ as she emphasises that gender budgeting is just good budgeting and that improvements in women’s economic opportunities, in turn, lead to increased economic growth. Most importantly and relevant to this thesis, Stotsky (2006b), early on stresses that the IMF should work with actors to reduce gender inequalities and highlights the value that measures such as gender budgeting can play in reducing gender inequalities.
Stotsky (2006b) sets the scene for her discussion by exploring the inequalities visible through social and economic indicators. While advances have been made, inequalities between women and men continue to exist in education, healthcare, labour force participation and access to productive assets. This is most critical when considered with extreme poverty as there also exists an inequality in the ability between men and women to develop their ‘human capital’, thus consigning women to being more likely to remain in a cycle of poverty. Assessing inequality requires reliable, valid and longitudinal data. Stotsky (2006b) discusses the inadequacies of the current data indicators and measures of inequality. Progress must be made which addresses some of these shortcomings such as inappropriate weighting within aggregated indicators, ensuring data reflects the complexities of rural and urban earning abilities or that indicators should consider the role that social institutions play in determining the economic participation levels of women. This highlights the need for improvements at an international level to ensure a concerted and collective approach to indicator design and data collection, for policy decisions, in most cases, relies on such data to lead it towards optimum and robust design. Policy can never be optimum if the data it is based upon is inadequate.
To bring gender budgeting into the mainstream, Stotsky (2006b) draws upon the outcomes from the 1995 Fourth World Conferences for Women in Beijing along with research by Elson (2002), Sharp and Broomhill (2002), Budlender (2002) and Sarraf (2003) that both outlines and structures gender budgets, while Stotsky (2006b) herself justifies their integration into mainstream budgeting as they provide a way to optimize budgeting, stimulate economic growth by removing gender inequalities, can help interrogate economic instability and its causes and can assist governments to mitigate to most negative outcomes of austerity
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budgets in times of economic crisis. While the frameworks and approaches that Stotsky (2006b) draws upon illuminate the practical implementation of gender budgeting, it is Stotsky’s (2006b) discussion of how specific policies can reduce gender inequalities where we see even more value. For example, gender biases may exist in the taxation systems which discourage women from working or where taxes exist on commodities predominantly purchased by women. Importantly she discusses how these policies interact with income classes, and while gender biases may exist, these are more notable at the ‘bottom end of the expenditure distribution’ while case studies illustrate the practical successes of the incorporation of gender budgeting. This varies from the ‘not fully successful’ in Australia to the somewhat successful in South Africa where gender budgeting was not institutionalised but led to a series of training materials on gender issues and a raised awareness of gender inequalities. The EU and Nordics provide examples where gender budgeting has been adopted in a systematic manner and takes centre stage.
This is a very notable paper. It is a pointed and specific discussion on how gender inequalities matter and how they can be reduced by adopting an alternative budgetary process, and importantly, this paper contains a set of recommendations for the IMF. This paper contributes to the widening of the portfolio of advice that the IMF can utilise to encourage states to adopt measures that help drive economic growth. Stotsky (2006b) clearly recommends that gender budgeting is incorporated into the budgeting process and that the IMF should support and encourage states to do so. This represents a critical point in the development of the discussion of the IMF’s remit and what it can influence states to do to stimulate economic growth.