| United Nations | A/50/399 |
General Assembly
Distr. GENERAL
22 September 1995
ORIGINAL:
ENGLISH
Fiftieth session
Agenda item 95 (f)
SUSTAINABLE DEVELOPMENT AND INTERNATIONAL ECONOMIC COOPERATION:
WOMEN IN DEVELOPMENT
Effective mobilization and integration of women in development:
gender issues in macroeconomic policy-making and development
planning
Report of the Secretary-General
CONTENTS
Paragraphs Page
I. INTRODUCTION ......................................... 1 -5
II. ENGENDERING DEVELOPMENT: EVOLUTION OF THE CONCEPT ... 6 -10
III. WOMEN'S ACCESS TO PRODUCTIVE EMPLOYMENT AND
ENTREPRENEURSHIP ..................................... 11 - 48
A. Women in the labour market ....................... 13 - 26
B. Entrepreneurship ................................. 27 - 48
IV. GENDER IN MODELS OF DEVELOPMENT ECONOMICS ............ 49 -61
A. Gender in neoclassical development economics ..... 51 - 52
B. Gender and the structuralist perspective in
development economics ............................ 53 - 54
C. Gender and outward-oriented development .......... 55 - 61
95-28861 (E) 021195/...
*9528861*
CONTENTS (continued)
Paragraphs Page
V. GENDER IN ECONOMIC POLICY: SOME EXAMPLES ............ 62 -71
VI. CONCLUSIONS: STRATEGIES FOR INCREASING THE
PARTICIPATION OF WOMEN IN ECONOMIC DEVELOPMENT ....... 72 - 75
I. INTRODUCTION
1. Reports on the effective mobilization of women in development have been
submitted to the General Assembly, through the Economic and Social Council,
regularly on a biennial basis for a number of years, starting at the
fortysecond session.
2. At that session, by its resolution 42/178 of 11 December 1987, the
General Assembly recognized the significant contribution of women to the
overall economy and recommended the intensification of efforts to promote
the integration of women in development; it also urged Governments to
include measures for the involvement of women, both as agents and as
beneficiaries, in national development plans, and to review the impact on
women of development policies and programmes. Subsequent reports have
emphasized coordination of activities of organizations of the United
Nations system relating to women in development (A/44/290), the effective
mobilization of women in the implementation of the International
Development Strategy for the Fourth United Nations Development Decade
(A/46/464) and how gender was dealt with in Agenda 21 (A/48/393).
3. The 1994 World Survey on the Role of Women in Development 1/ analysed
changes in the role of women in development in the context of global
economic restructuring, focusing, among other issues, on the impact of
development policies on women. The Second Review and Appraisal of the
Implementation of the Nairobi Forward-looking Strategies for the
Advancement of Women, in its analysis of factors affecting the
implementation of the Strategies, considered a broad range of macroeconomic
and international trade polices and their impact on the economic and social
status of women.
4. Accordingly, building on the work already undertaken, the present
report, the fourth of the biennial reports on the effective mobilization
and integration of women in development, focuses on gender issues in
entrepreneurship, macroeconomic policy-making and development planning.
The choice of this theme reflects the growing recognition in academic
circles and among development practitioners of the need to consider gender
as a variable in the design of economic policies if their implementation is
to produce an outcome that is both efficient and socially desirable.
5. The need for the explicit incorporation of gender issues in the design
of economic policies, particularly policies of structural adjustment, has
frequently been emphasized in the context of expert group meetings
organized by the Division for the Advancement of Women of the Department
for Policy Coordination and Sustainable Development 2/ and by various
international development institutions. 3/ The growing evidence from
analyses that have taken gender into account provides the basis for
questioning whether the current economic models that underpin national and
international economic policy fully factor in this critical variable. The
present report explores the wider question of economic policy from this
perspective.
II. ENGENDERING DEVELOPMENT: EVOLUTION OF THE CONCEPT
6. Consideration of the meaning and determinants of development and of
development policies has produced a succession of approaches over the past
three decades. The early preoccupation of development practitioners with
economic growth gave way to strategies to secure basic needs and achieve
national self-reliance as development came to be redefined in terms of
poverty reduction. The lessons and experience of a decade of structural
adjustment precipitated yet another reassessment of what development is all
about. The notion of sustainable human development emphasizes the
enlargement of the choices and opportunities available to people and views
development as a participatory, people-centred and all-inclusive process.
The experience of development policies over the past decade gave rise to a
new growth theory combining efficiency with equity and providing a
framework for analysing endogenous sources of growth. For most of the
time, however, the presence of women in distinct parts of economic
production was largely overlooked by the prevailing paradigm. That failure
limited development efforts and their impact. Economic growth, project
efficiency and social justice call for a new approach to development that
systematically includes women.
7. Over the last decade, women-in-development issues, previously treated
as an adjunct to the main goal of economic development, gradually gained a
greater prominence within the development agenda and efforts, however
tentative, were made to introduce gender variables into the analysis of
variations in economic policy outcomes. The early attempt to "add women as
an afterthought" 4/ to the pre-existing model of development gave way to a
realization that the success of development itself was highly contingent on
women's full participation in it. Numerous studies demonstrated that
investment in women was not only a matter of social justice but an integral
part of development strategy leading to a more efficient use of resources,
economic growth and a sustainable development process. The impermeability
of some countries to economic reforms and the disappointing results
achieved in others have been linked to a failure to consider the gender
dimension of economic adjustment, among other factors.
8. The Third United Nations Development Decade ended with a new awareness
of the need to give explicit consideration to the economic and social role
of women when planning for development. The earlier model of the
"integration" of women in development was subjected to much criticism,
particularly as being limited from the perspective of women's strategic
gender interest. 5/ As a result, building on what has been achieved so
far, the women-in-development approach evolved into the "gender and
development" approach, which focuses on gender relations as they constrain
or advance efforts to promote economic development and reduce poverty and
seeks not only to integrate women into development, but to "look for the
potential in development initiative to transform unequal social/gender
relations and to empower women". 6/
9. Gender analysis, now widely accepted in the field of development as an
analytical framework, seeks to remedy the nearly complete disregard for
gender in economic theory and policy-making by stressing the gender
dimension of micro- and macroeconomic policies and the need to include
gender as a variable in economic policy-making and development planning. A
corollary of the gender approach is that there is not a self-contained set
of "women's issues". It is rather the case that there are many issues
concerning economic transformation, the allocation of resources, savings,
investment, growth, human capital formation, poverty, the labour market,
inequality and the role of the State that could be better understood if
disaggregation by sex took place at the outset of conceptualization and
formulation of policies instead of passing references to women in an
otherwise unaltered analysis.
10. Although recognized by national and international development agencies
as well as in academic circles, the gender aspect of economic policy-making
has not been used as a planning and policy-making tool and there is no
"sustainable dialogue between planners and those within the research
community who might help them towards a gender analysis". 7/ To bridge
this gap, it is necessary to bring the tools of economic analysis together
with gender realities so that the gender dimension can be included in
policy formulation and analysis.
III. WOMEN'S ACCESS TO PRODUCTIVE EMPLOYMENT AND
ENTREPRENEURSHIP
11. Sustainable development requires a dynamic equilibrium of human and
natural resources. Given women's role in both production and social
reproduction, sustainable development is, by definition, a process where
women's role is central. During the United Nations Decade for Women and
following the adoption of the Nairobi Forward-looking Strategies, the
centrality of women's role to development found recognition in numerous
policies and programmes adopted by Governments and international
development and finance institutions to enhance women's integration in
development. Those efforts, however, focused primarily on the effects of
development on women, including reinforcement of discrimination, neglecting
to some extent their role as an underutilized economic resource that
affects allocative and production efficiency. Although considerable
progress has been achieved in access to education and health services, less
has been accomplished in other areas, and improvements in educational
attainments and greater access to paid employment have not always been
translated into greater economic autonomy and advancement.
12. Two issues should be considered of growing importance in the
formulation of gender-sensitive economic policies: women's increasing
access to productive employment, especially in growth sectors; and women's
growing roles as entrepreneurs.
A. Women in the labour market
13. Women play an important economic role in societies throughout the
world, providing a substantial contribution to national income and
development. In the past 20 years, new patterns in the economic
participation of women have emerged. Their participation rates and labour
force attachment have been growing steadily, and some estimates suggest
that they will approximate those of men by the year 2000 in most
industrialized economies and in some developing countries. 8/
14. In the past 20 years women have been entering the labour market in
increasing numbers and their average share in the labour force has
increased significantly in all regions except sub-Saharan Africa and
Central Asia. Economic activity rates for women are on the rise everywhere,
while those for men are declining. Most labour economists agree that the
rise in female labour-force participation rates is a secular and
international phenomenon. While previously noted trends showed that women
were concentrated in a limited number of sectors or in lower-paid and less
stable employment, those sectors have shown the greatest dynamism in the
context of global restructuring, suggesting that many assumptions about the
role of women in the labour market will have to be reconsidered.
15. Demographic developments, economic necessity and changes in employment
patterns and labour demand have been the forces behind the great influx of
women into the formal job market. Today, in developing countries, women
account for 31 per cent of the labour force (see table 1). National
reports from industrialized countries indicate that in those countries
women constitute approximately half of the labour force. The increase has
been particularly dramatic in the past 20 years: in Portugal, for example,
the female labour force grew from 21.3 to 43.7 per cent in the period 1970-
1990. 9/
Table 1. Economic activity rates, by sex: 1970-1990
(Percentage)
1970 1980 1990 WomenMenWomenMenWomenMenDeveloped
regionsEastern Europe567956775874Western Europe377842755172Developing
regions408146785475Africa Northern88212792175Africa Sub-
Saharan579054895383Latin America and the Caribbean Latin
America228525823482 Caribbean388142774972Asia and the Pacific Eastern
Asia578658835680 Southern Asia258824854478 Central Asia557656775879
Western Asia228326813077Oceania478846864876
Source: The World's Women, 1995: Trends and Statistics (United Nations
publication, Sales No. E.95.XVII.2).
16. The new opportunities embodied in rising rates of economic activity
should provide women with the resources necessary for greater economic
autonomy and self-reliance. However, women's share in unemployment often
exceeds their share in the labour force in most developing countries, in
economies in transition (where they account for the greater share of the
unemployed), and in some industrialized countries where comparative
statistics are available (table 2). To some extent, the increased share of
women in economic activity, as for example in Eastern Europe, can be
misleading as an indicator of growing economic autonomy, given the fact
that unemployment is heavily skewed towards young female school-leavers
entering the labour force. In Poland, almost 60 per cent of all unemployed
school-leavers in 1990 were women.
Table 2. Female share in the unemployed and economically
active populations: selected
countries or territories, 1975-1991/92
(Percentage)
1975 1985 1991/92
UnemployedEconomically activeUnemployedEconomically
activeUnemployedEconomically activeDeveloping
countriesBarbados57.143.359.447.264.548.3Brazil28.324.433.827.233
.235.2Chile35.224.830.828.031.231.0Costa
Rica38.319.730.121.636.029.8Ghana21.541.930.740.610.0..Jamaica67.
244.666.245.868.346.5Panama45.625.847.126.750.129.2Puerto
Rico25.528.326.129.429.637.6Republic of Korea22.533.322.834.029.540.0Syrian
Arab Republic9.213.225.516.037.518.0Thailand38.547.160.845.951.047.1Tr
i n i d a d a n d
Tobago37.527.836.329.745.533.8Venezuela22.123.325.026.734.730.9In
d u s t r i a l i z e d
countriesAustria54.139.639.640.245.141.0Belgium54.132.255.933.861
.741.3Denmark31.940.055.644.249.446.5Finland34.845.046.646.638.64
7.0France56.637.753.839.654.143.8Germany42.037.244.137.752.238.5G
reece34.625.942.526.461.936.8Italy54.630.157.431.758.037.1Netherl
ands21.728.634.631.055.939.7Norway47.535.054.940.541.145.2Portuga
l44.830.956.924.161.142.3Switzerland23.335.345.936.742.944.2Turke
y11.436.516.434.026.931.4United Kingdom18.737.131.238.726.243.3United
States44.039.145.641.542.845.1
Source: International Labour Office, Year Book of Labour Statistics,
1985 and 1990.
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17. It should also be noted that many economically active women are
underemployed. In developing countries, underemployment of female labour
is characterized by low and/or declining marginal productivity and seasonal
employment. The structural underemployment of women inherited from
centrally planned economic systems has been perpetuated in unemployment
among women with higher and specialized education and lack of opportunity
to re-enter the labour force at a level corresponding to their education
and experience. This has been further exacerbated by such widespread
practices as mandatory part-time work, extended child-care leave and
administrative leave and early-retirement policies instituted by
enterprises undergoing downsizing and restructuring.
18. The International Labour Organization (ILO) defines the underemployed
as those who would like additional work, who work for low wages or whose
skills are underutilized. 10/ According to this definition,
underemployment is currently a characteristic of the female labour force in
the industrialized countries, where, in the context of the deregulation of
factor and product markets and in response to growing unemployment, job
creation has been geared towards part-time, temporary and casual work.
Current data indicate that, as the percentage of households headed by women
has steadily increased, more and more women have been seeking full-time
paid work but have ended up in only part-time jobs 11/ (see table 3).
Table 3. Women's share in part-time employment: selected
OECD economies, 1979-1992
(Percentage)
19791983199019911992Austria87.888.489.189.7..Belgium88.984.088.68
9.3..Canada72.171.371.070.570.0Denmark86.984.775.775.5..France82.
284.483.683.783.7Germany91.691.989.789.6..Italy61.464.867.265.467
.9Japan70.172.870.769.969.3United Kingdom92.889.886.286.185.4United
States68.066.867.667.266.4
Source: Organisation for Economic Cooperation and Development,
Employment Outlook, July 1993.
19. The steadily rising rates of economic participation, however, do not
reveal the full extent of women's contribution to development because they
do not fully recognize work done at home and outside the formal economy.
Nor does the income women receive provide a full measure of their
contribution to the economy. Some advances have been made in the area of
wage equity over the past 40 years, but progress varies between regions and
age groups. While in some industrialized economies the earnings of young
women have almost reached parity with those of men of the same age, 12/
women's earnings in most of the developing world continue to fall short of
men's. 13/ The wage differential is particularly significant in the
developing countries and in those industrializing countries where labour
standards were allowed to deteriorate under the pressure to compete
successfully in the world market for manufactured goods and to attract
foreign investment (see table 4). Women's wages in manufacturing are lower
in most countries. In Japan, for example, women in manufacturing typically
earn only 40 per cent of the wage earned by men.
Table 4. Women's wages as a percentage of men's wages, by region, 1970-
1990
Agriculture Non-agriculture Manufacturing
197019801990197019801990197019801990Africa
Mean70.0058.5169.2161.4681.7989.4363.5060.0073.25
Maximum75.0067.5283.6361.46114.00113.5063.5062.0097.00
Minimum65.0049.0055.0061.4664.3073.0063.5055.0049.00Latin America and the
Caribbean Mean77.0067.5587.58..74.5268.8682.0070.2574.75
Maximum83.0078.1198.21..81.2475.9782.0081.0094.00
Minimum70.0052.1674.81..69.9764.6282.0051.0065.00Western Europe and other
States Mean81.7080.3185.1768.8477.1678.3566.0475.0074.64
Maximum111.0098.0098.5586.9387.4390.8080.0090.0089.00
Minimum56.0063.1264.4557.5364.6965.1555.0061.0059.00Asia and the Pacific
Mean74.0078.5779.3191.5169.7868.2260.0044.0041.00
Maximum90.0091.5592.2091.51101.5389.8084.0086.0097.00
Minimum48.0057.1560.7691.5144.4049.6160.0044.0041.00Eastern Europe
Mean73.00..74.0069.1870.4075.3968.8069.6772.75
Maximum73.00..74.0069.1872.3982.0069.6073.0078.00
Minimum73.00..74.0069.1868.4171.0068.0068.0068.00
Source: Women's Indicators and Statistics Database (Wistat), version 3,
CD-ROM (United Nations publication, Sales No. E.95.XVII.6).
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20. Empirical research has shown that 40 to 80 per cent of the
differential in the average hourly pay for men and women in many developing
and some developed economies can be ascribed to discrimination, so that
productivity-related characteristics and differences in human capital are
responsible for the remaining differential. However, earnings
discrimination is perhaps a less important aspect of labour-market gender
discrimination. More important is access to and participation in markets.
Studies in rural development in Africa have demonstrated that women
sometimes face extreme discrimination in access to non-farm wage
employment, which is largely determined by education, wage and sex. While
men with a secondary education had a 0.75 per cent probability of
employment, women with the same education and age characteristics had only
half that probability. 14/ Employment prospects for women with primary
education or less were only a fraction of those for men, suggesting that
discrimination may apply differently at different levels of education. 15/
21. The distribution of the female labour force continues to show a high
concentration in a single sector while the male labour force is more evenly
distributed. 16/ Other than in sub-Saharan Africa and Southern Asia, where
women are concentrated in agriculture, services tend to provide most of the
jobs that go to women. The services sector has now become "feminized" in
most countries. Women's employment is concentrated in public services,
teaching, administrative and commercial enterprises and domestic services,
in which women often account for 90 per cent of employees. Industry
remains a modest source of employment for women, except in Eastern Europe
and Southern and Eastern Asia, where, in some countries, women account for
the greater proportion of the labour force in export industries.
22. There have been trends over the past decade towards a reduction in
occupational segregation by sex as women in some countries have entered
higher-level professional jobs. But at the same time the share of women's
employment in "feminized" occupations has increased, thereby reinforcing
gender differences by employment sector at the bottom of the labour market.
17/ To some extent, a marked shift towards services, which now account for
some 65 per cent of GDP and for between 50 and 70 per cent of all jobs in
the industrialized countries, has served to increase the importance of
women's employment since women now account for 55 to 80 per cent of
employment in the services sector. In the economies in transition, where
gender segregation in the labour market is more marked than in other
industrialized economies, structural changes in the economy and
privatization have caused a redistribution of female employment in the
services sector from the sectors that have become more prestigious in terms
of pay and status, like insurance and banking, to the sectors with an
already high concentration of women employees and a low return on their
labour, like education, nursing and social care.
23. In the developing economies the direction of segregation of female
labour is similar to that in the industrialized economies, and women are
underrepresented in the higher-paid professions and occupations and
overrepresented in low-pay and low-status occupations. The adjustment-
related labour shedding in the public sector in the past decade has to some
extent reinforced this segregation pattern as the female labour made
redundant moved into the already overcrowded flexible-entry sectors, such
as the informal sector and services, which did not happen in the case of
men.
24. Other trends in female employment in developing countries include
the growth of female industrial employment in the context of the growth of
export-oriented manufacturing and a partial reversal of the job-related
migration pattern of the 1970s, as demand restraint and trade
liberalization policies drastically curtailed the availability of jobs in
urban areas and reduced real incomes. Despite rising agricultural prices
and agricultural wage rates, women in developing countries have not been
able to benefit fully from these developments owing to constraints on the
reallocation of their labour and the persistence of limited access to land,
credit and extension services.
25. Women the world over are currently employed at a higher rate than men
in sectors which ignite economic growth and promote innovation and social
change. There appears to be a positive correlation between the importance
of the sector in terms of its share of GDP and the concentration of female
labour. The same is true in terms of the growth potential of a sector and
women's representation in its labour force, that is to say that women are
concentrated in the fastest-growing sectors of the economy and the fastest-
growing occupations. Of the 20 occupations that will generate the greatest
number of new jobs by the year 2005, the majority are in services and
belong to the heavily feminized category. 18/ Trends in the labour force
participation of women together with patterns of global economic
restructuring and transformation suggest that in the future more women will
emerge as workers and entrepreneurs. "What women want from their jobs has
meshed much better with the needs of the market-place than what men want.
Their prospective success should make everyone more optimistic about
economic growth." 19/
26. Taking account of this new trend in the global economy would seem to
be important in formulating employment policies to maximize growth.
B. Entrepreneurship
27. In recent years there has been a reversal of an earlier trend towards
diminishing self-employment among women, and it has been estimated that by
the end of the 1980s the rate of growth of women's self-employment exceeded
that of their overall employment. 20/ Data from the Women's Indicators and
Statistics Database (Wistat) show that the ratio of women to men among
employers and own-account workers has increased in almost all regions in
the past 20 years.
28. As women have gained a major place for themselves in the labour market
and greater access to productive resources, it has become increasingly
irrelevant and unrealistic to continue to rely on the marginalization
approach as a premise for the analysis of women in development. According
to the 1994 World Survey on the Role of Women in Development, women's
enterprises account for a significant share - in some cases as large as 40
per cent - of the newly-created businesses. In the United States, the rate
of growth of businesses owned by women was four times the overall growth
rate of new businesses between 1982 and 1987 (see table 5). There are at
least 6.5 million women business owners in the United States according to
the latest estimates by the National Foundation for Women Business Owners.
In 1992, businesses owned by women employed more people than all the
Fortune 500 companies combined. 21/ Women entrepreneurs represent a
rising force that holds great promise for development. Their impact is
based on the role entrepreneurship plays in long-term economic growth, on
the special role small- and medium-sized enterprises and the informal
sector (where women's businesses are concentrated) play in economic
development, and on the major social benefits associated with the greater
economic autonomy and access to markets and decision-making that are
inevitably linked to women's access to and ability to command resources.
Table 5. Women-owned businesses as a percentage of all
United States firms and receipts, 1987
Women-owned
firms, 1987Percentage
change
1982-1987Women-owned
firm
receiptsAll industries30.4057.5013.94Agricultural
services13.44146.209.39Mining21.8233.3012.82Construction5.7163.00
8.74Manufacturing21.70109.4013.63Transportation, communication and public
utilities13.46105.1014.32Wholesale trade18.79157.0014.32Retail
trade35.6326.5015.68Finance, insurance and real
estate35.6477.5014.42Services38.2176.6014.65Unclassified industries26.58-
21.6012.43
Source: United States Department of Commerce, 1987 Economic Censuses:
Women-Owned Business (Bureau of the Census, 1990).
29. Comparative studies of economic development suggest that, as
industrialization progresses, the importance for economic growth of
entrepreneurship and innovation increases relative to that of capital and
labour. Entrepreneurial activity improves allocative efficiency and
reduces X-inefficiency. 22/ It promotes international technology transfer,
thereby facilitating economic growth, restructuring and development. In
fact, entrepreneurship is regarded as a fourth factor of production that is
particularly crucial for long-term growth and development: studies of
long-term growth have shown that the residual that is unexplained by change
in the stock of capital and labour is responsible for some 50 per cent of
variations in economic growth. 23/ This "residual" growth is fuelled by
the introduction of "new combinations" of means of production and
technological progress, both of which can be directly attributed to
entrepreneurship.
30. The development experience of the past decade has shown that
development strategies emphasizing import substitution and central planning
have prompted a greater interest by Governments and international
development institutions in small-scale economic activities and a
participatory economic development process. Owing to the importance of
women's incomes to both national productivity and individual and family
welfare, as well as the significance of the role of the informal sector in
poverty reduction, Governments and donor agencies are funding an increasing
number of programmes in developing countries targeted at female
microentrepreneurs. 24/ Such programmes aim at reducing the vulnerability
of women working in the informal sector by assuring them access to credit,
better working conditions and appropriate technology, training and
infrastructural support, as well as helping them with marketing. 25/
31. In the economies undergoing structural adjustment and economic
transition, entrepreneurship, with its growing female component, is playing
a key role in the success of policy reforms that aim at creating a
foundation for long-term sustainable growth. While stabilization policies
of demand restraint are designed to put a floor under a downward spiral in
key economic indicators and are critical for the resumption of growth,
long-term sustained economic development requires an improvement in the
economy's productive capacity that can only be accomplished by active
policies on the supply side. Such policies aim at the realignment of
relative prices, exchange rate competitiveness and the liberalization of
trade and markets but are not necessarily sufficient to ensure the
appropriate supply-side responses needed for structural change. Rather,
they create conditions for the emergence of productive entrepreneurship,
which is the ultimate force behind the introduction of new know-how and the
attainment of the greater allocative and organizational efficiency of
markets. In developed and developing economies, the loci of
entrepreneurship tend to reside with the activities of small and medium
enterprises in the formal sector; in the case of the latter, mostly in the
informal sector.
32. In developing countries, formal-sector enterprises represent only a
fraction of all small-scale enterprises. The bulk of small-scale
production appears to take place in informal-sector enterprises with fewer
than 10 workers. The average size of an enterprise in Sierra Leone, for
example, is 1.9 persons; in Bangladesh it is fewer than three persons. The
importance of the informal sector is overwhelming, especially in sub-
Saharan Africa, where the great majority of least-developed countries are
to be found. It has been estimated that over 90 per cent of new jobs in
urban areas in this region in the 1990s will be created in that sector. An
assessment of informal microenterprises in Ecuador has found that they play
a key role in generating urban employment and that the microenterprise
sector accounts for about two thirds of the labour employed in the private
sector. 26/
33. Outside the agricultural sector, women's businesses in developing
countries tend to be concentrated in the small and medium enterprises,
often in the informal sector, that developed rapidly in those countries in
the 1970s and 1980s as a result of rapid urbanization and, to some extent,
the diversion of resources from the formal economy caused by acute economic
distortions and excessive government regulation. By and large, informal-
sector enterprises emerge to fill gaps in demand for goods and services
that are not effectively captured by the modern formal sector. In Latin
America and sub-Saharan Africa, women's share in the informal sector
exceeds that in the total labour force, and economically active women are
more likely than men to be in this sector. 27/ A number of sources
indicate that women own and/or operate about one third of all informal
businesses. 28/ As small-scale entrepreneurs, women operate businesses in
craft production, carpet weaving, pottery making, food processing and the
brewing of beer and in trade and street vending. Data suggest, however,
that women are found in the informal sector more often than men because of
lack of opportunity or other obstacles to wage employment.
34. The expansion of small and medium enterprises in the past decade can
be traced to the restructuring of the global economy, globalization and the
flexibilization of production and, consequently, to the growth of
industrial outwork, subcontracting and home-based production. While their
role as business owners in the formal sector in developing countries is
often negligible, women account for 43 per cent of small-business owners in
Egypt, 49 per cent in Jamaica, 37 per cent in Thailand, and 61 per cent in
Honduras. In Zambia, 60 per cent of rural non-farm enterprises are owned
by women and, in Zimbabwe, 62 per cent of rural non-farm enterprises and 77
per cent of urban non-farm enterprises have female proprietorship. 29/ But
the growth in self-employment among women in developing countries and the
economies in transition is largely a "supply driven" phenomenon, rooted to
a greater extent in the need for survival and in economic necessity than in
attractive market opportunities. Women's remuneration also remains lower
than that of men: "data gathered on Latin America and Africa show that
women's informal businesses have lower revenues, lower asset bases, and
smaller profit margins than men's; in Peru, for example, women's business
assets are just one half those of men". 30/
35. From the perspective of the characteristics of the sector, women-owned
small business is a vital component of successful economic restructuring
and adjustment. It is an important source of efficiency, growth and
economic and political decentralization, which contributes to economic
welfare and development. It is also a powerful tool of low-cost job
creation, and this is particularly important during periods of
stabilization and structural adjustment and as a component of development
strategy in economies with a relatively high labour endowment. In addition
to employment generation, small and medium enterprises create a positive
economy-wide externality by providing on-the-job training for semi-skilled
workers, many of whom are women. Increasing concern for the environmental
sustainability of development again points to small enterprises as a
hopeful solution, since their scale of operation and labour-intensive
technologies put less strain on the environment.
36. The literature on entrepreneurship distinguishes between productive,
unproductive and destructive entrepreneurship and between entrepreneurial
activities and rent-seeking activities, which are of questionable value to
society as a whole. Research shows that the welfare of society is much
more likely to be affected by the direction of entrepreneurial activities
than by the number of persons who carry them out. In that sense, it can be
argued that the marginal social product associated with women-owned and/or
operated businesses exceeds the marginal private product, owing to the
externalities resulting from the economic empowerment of women and to a
tendency towards productive activities rather than rent-seeking or
arbitrage because of greater fiscal constraints facing women entrepreneurs
and because they are poorly placed in society to lobby for political
patronage.
37. Women, particularly in developing economies and economies in
transition, are often driven to self-employment as a result of worsening
economic conditions. It is sometimes argued that their businesses are
better characterized as income-generating rather than entrepreneurial in
the classical, Schumpeterian sense of the concept. On this count, several
observations are in order. Innovative entrepreneurship requires a complex
infrastructure and developed markets that are unlikely to exist in
developing countries or in most of the economies in transition. The
concept of innovative entrepreneurship is therefore too narrow a criterion
for dividing women's individual economic activity into an entrepreneurial
category and a merely income-generating category. Women's entrepreneurial
businesses in developing economies fulfil an important market-making
function, often operating where markets do not exist or are segmented and
do not operate perfectly. Their entrepreneurial skills therefore affect
the effectiveness of markets and enhance allocative efficiency.
38. Between the very broad and very narrow definitions of entrepreneurship
there remains a large area that includes not only innovativeness in the use
and combination of existing resources but also management, leadership and
marketing. From the managerial perspective, women-managed businesses are
inherently entrepreneurial, because women's managerial style differs
qualitatively from that of men and the practices followed in women-managed
enterprises are beginning to change how business institutions are run. 31/
They also challenge the social attitudes and expectations about gender
behaviour that determine the parameters of the participation of women and
men in economic and political decision-making. The resulting change in the
gender system - the way our culture determines what is "male" and what is
"female" - contributes to both the greater economic efficiency and greater
equity of the development process.
39. Studies have shown that entrepreneurial activities help women towards
social and economic empowerment. As women's incomes rise, their control
over productive resources, including their own labour, increases. They
acquire a greater voice in decision-making at all levels, starting with the
household and extending to the economic and political domains. Other
benefits include a lower incidence of malnutrition and disease among their
families and more education for their children, as well as a reduction in
violence directed towards women.
40. In industrialized market economies a desire to secure economic
autonomy and to escape from male domination are most frequently cited by
women as reasons for starting their own businesses. Women
microentrepreneurs in developing economies chose own-account economic
activity because of the lower barriers to entry into small-scale
entrepreneurship and constraints on their access to the labour market. In
both developed and developing countries, poor access to credit is the most
frequently mentioned obstacle to the launching and expansion of women-owned
businesses. Although formal capital markets are legally open to women,
financial resources are largely unavailable to them owing to many factors
inherent in tradition and society. Factors limiting women's access to
formal credit markets are related to institutional requirements, to
cultural and social norms and to the type of productive activities in which
women's businesses predominate.
41. Credit is either unavailable or very limited for small entrepreneurs,
and for women in particular, because they usually do not own marketable
land rights and hence have no collateral. From the point of view of
commercial credit institutions in developing countries, lending to small
enterprises is not a very attractive option for diversifying their loan
portfolios, and there are sound reasons for this. In developing countries,
where inflation rates are high, credit rationing and fixed interest rates
favour large loans because of lower administrative costs. As a result,
formal credit institutions prefer to work with large and less risky
customers. Women microentrepreneurs often lack real assets and
creditworthiness and are unfamiliar with the accounting practices that
commercial banks require. In Kenya, for example, banks still require land
certificates to be presented with applications for credit. 32/ Also, in
some countries, financial institutions permit only one loan per household.
As a result, women's participation in formal small-scale enterprise lending
programmes rarely exceeds 20 per cent and can be as low as 16 per cent. 33/
42. Evidence from banks that have been lending to the poor and to low-
income women entrepreneurs shows that the higher unit cost of small-scale
lending may not inhibit commercial lending to microenterprises if financial
infrastructure is sufficiently developed and diversified. Thus, there may
be a case, based on the long-term social opportunity costs, for applying
the infant-industry argument to subsidies to innovative credit schemes for
women entrepreneurs, the infant industry in this case being financial
services. Lately, however, it has been argued that highly subsidized
interest rates on loans given to the poor are dysfunctional, and credit
programmes are increasingly being designed to be self-sustaining in
accordance with the revolving fund concept, whereby deposits are mobilized
and funds are made available on a continuing basis to participants at
market rates of interest. 34/ Despite the 95 to 97 per cent recovery rate
on loans to women entrepreneurs (see table 6), their access to credit
remains limited and appears to be in decline in some countries. 35/
43. The evidence frequently used in the literature on women
microentrepreneurs to demonstrate the financial constraints faced by women-
owned businesses is often interpreted too easily as a loan-supply problem,
overlooking the possibility that the observed lack of participation by
women in formal credit markets might be caused by a lack of demand for
credit or possibly access to informal sources of credit, even though most
women microentrepreneurs report a need for credit. 36/ Studies have
revealed that for the majority of women in developing countries formal
credit institutions may not be a satisfactory source of financial resources
owing to the high opportunity cost of applying for credit and the high
transaction costs they face in the credit market. Other factors that act
as a constraint on the demand for credit by low-income women entrepreneurs
include the remote location of financial institutions, complicated
procedures for loan application and poor understanding of financial rules
and regulations.
Table 6. Business credit to women, 1993
Institutions by typeWomen clients
(Percentage of total)Repayment rate
(Percentage)Commercial bank programmesIndonesia Bank Rakyat (BRI)/
KUPEDES Programme2398Bank Pembanguran Daerah (BPD)/
Baden Kredit Kecamatan Programme,
Indonesia6080Poverty-lending banksGrameen Bank, Bangladesh9487Self
Employment Women's Association (SEWA) Cooperative Bank, India10097Banco
Solidario (BancoSol), Bolivia (commercial bank)798National boardsNational
Board for Small Scale Industries, Ghana: Credit Scheme for Small
Enterprises4372Enhancing Opportunities for Women in Development
(ENOWID)10095Non-governmental organizationsAsociacion Dominicana para el
Desarrollo de la Mujer (ADOPEM), Dominican Republic10095Kenya Rural
Enterprise Programme (KREP)6395Credit Union Association, Ghana30..
Affiliate network institutionsFINCA International, Washington,
D.C.9697ACCION International, Washington, D.C.5495Friends of Women's World
Banking/India10095Women's World Banking Ghana Limited ..88Women's
World Banking New York9796
Source: The World's Women, 1995; national report of Ghana, 1994.
44. It has recently been emphasized that current models of the demand for
credit by women entrepreneurs do not reflect the risk involved in
indebtedness. 37/ It has also been noted that high interest rates put most
women off, and that, in their view, their small business is not enough to
push them into such debt to risk the security of their children and
families. 38/ Low-income women farmers in sub-Saharan Africa, many of whom
are just emerging from a subsistence life-style, have been reluctant to
take advantage of the increased availability of credit to them because of
their low cash incomes and a general aversion to risk. In this respect, it
has been argued that greater availability of credit to rural women farmers
should not be viewed as a perfect substitute for subsidizing production
inputs when designing programmes directed at raising the productivity of
rural women. 39/
45. The study of Ecuadorian microenterprises already referred to has
shown, however, that women entrepreneurs are as likely to apply for loans
as their male counterparts: in the statistical sample used by the study,
women represented a higher proportion of those entrepreneurs who applied
for loans. 40/ The study showed that women borrowers were subject to
rationing of loan size; that is, they were granted loans in amounts smaller
than requested. Discrimination against women entrepreneurs in terms of the
size of the loan rather than the number of loans granted suggests that, to
be successful in borrowing, female entrepreneurs need to establish their
creditworthiness in order to provide the information, which, if lacking,
allows lenders to resort to non-price mechanisms of loan-rationing.
46. Given the problem of inadequate information that is inherent in
credit-allocation decision-making, redirecting public credit to women as a
target group is only a partial solution to their poor access to loanable
funds. To make financial assets more accessible to women, it is important
to encourage and facilitate their greater reliance on the savings market.
Greater access by women to the savings market contributes to the
development of female entrepreneurship on several fronts. Savings can
finance long-term investment in sectors where women's enterprises
predominate, thereby rectifying a current misallocation of capital and
increasing the aggregate savings rate. Also, the accumulation of assets
facilitates access to formal credit and improves creditworthiness. For
reasons already mentioned, the credit market is intrinsically male-biased,
whereas women's predominance in the informal savings market suggests that
the savings market is likely to be gender-neutral. 41/ Greater efficiency
will, however, be required of financial systems in dealing with small
transactions and assisting women entrepreneurs in building long-term
working relations with financial institutions.
47. The overwhelming emphasis in the past on the credit side rather than
on the savings side of the market in the context of programmes targeting
women entrepreneurs has left savings institutions underdeveloped and
inaccessible to women. National reports indicate that the rate and pattern
of savings differ significantly between women and men. A survey in a rural
district of Namibia 42/ found that only 45 per cent of households headed by
women had savings as compared to 73 per cent of households headed by men.
Women saved annually only 23 per cent of the amount saved by men and
usually kept their savings at home. The design of savings schemes
attractive to women should therefore be a priority in the formulation of
programmes directed at facilitating women's access to financial resources.
48. Other obstacles to the development of businesses owned by women
include an adverse economic and regulatory environment, inadequate physical
infrastructure and marketing, poor access to new technology, and a lack of
vocational and managerial training. Rigid social and cultural norms and
lack of sharing of domestic responsibilities exacerbate the problems women
face when operating businesses.
IV. GENDER IN MODELS OF DEVELOPMENT ECONOMICS
49. A broad consensus has emerged in the field of development on the
importance of greater attention to the situation of women if elimination of
absolute poverty is to be achieved and economic growth is to become
sustainable. Research has shown that investing in women promotes growth and
efficiency, reduces poverty, helps future generations and promotes
development. The analysis in the preceding section of two gender-related
aspects of economic growth demonstrates the need to consider gender factors
in policy-making. Yet discussions of gender have continued to be removed
from mainstream economic and development policy-making in terms of both the
focus and place of analysis. Reports on women in development continue to
focus on the welfare impact of development policies on women, while little
or no attention is paid to the effects of gender relations on the outcomes
of economic policies. Women-in-development and, lately, gender-in-
development issues remain sidelined in special reports or special policy
initiatives, rather than being given systematic consideration when policies
and programmes for structural change are being formulated. The contention
of the present report is that, without explicit consideration of gender in
policy formulation, certain significant costs of economic inefficiency and
resource misallocation are likely to persist, with a consequent reduction
in growth and in social equity.
50. There is a reciprocal relationship between gender and development:
development strategies and the economic policies pursued in the context of
those strategies have a gender-specific impact; and gender differences in
access to productive resources, factor markets, income and allocation of
income have an impact on the efficiency and sustainability of economic
policy outcomes. While the impact of development policies on women is a
well-documented and widely addressed issue in the literature on women and
development, the significance of gender for economic policy-making has
received, as yet, far less attention. Economic analysis that is gender-
aware has the potential to promote a better understanding of development
and to facilitate the formulation of the policies required for its
sustainability.
A. Gender in neoclassical development economics
51. In the early literature on women in development it was argued
extensively that women become marginalized as, in the course of
development, their household-based subsistence activities become
increasingly subsumed into wider, market-based activities. Economic
marginalization sets in motion what can be termed a "vicious circle of
inequality", as a lack of participation in development leads to an unequal
share of the benefits of development and that in turn reduces women's
competitiveness in the job market. This approach suggests that economic
development is "bad" for women because it sharpens gender inequalities and
worsens the burden on women of unpaid and unrecognized work. The standard
prescription has been to increase investment in women's human capital to
reduce the discrimination women face in the labour market.
52. In the field of development economics, gender is not integrated into
macroeconomic development modelling and its treatment is often limited to a
few passing references to the impact of development on women. According to
Nobel laureate W. Arthur Lewis, the author of a well-known structural
change model, women benefit from growth even more than men: "woman gains
freedom from drudgery, is emancipated from the seclusion of the household,
and gains at last the chance to be a full human being, exercising her mind
and her talents in the same way as men". 43/ Structural change models
completely omit gender from the analysis of the reallocation of labour from
the subsistence sector with zero or declining marginal product of labour to
the high-productivity modern industrial sector. These models treat labour
supply as infinite and the reallocation of labour surplus as occurring
smoothly, unhindered by the sexual division of labour and social practices.
In real life, however, productivity, wage differentials and changes in
relative prices do not always provide a sufficient inducement for the
intersectoral transfer of at least 50 per cent of the labour force.
B. Gender and the structuralist perspective in
development economics
53. Although structuralists disagree with neoclassical economists on the
extent to which changes in relative prices can precipitate supply response
in developing economies, they do not include gender among the "bottlenecks"
that have a potential to inhibit such a response. The structuralist
approach to stabilization policies points, inter alia, to the
redistribution of income from labour to capital as the hidden equilibrating
factor between supply and demand, but no attention is paid to the fact that
labour is gendered and that income distribution occurs along gender lines,
often leaving women worse off relative to men, as suggested by the ample
research on the allocation of household income and household expenditure
patterns. The equilibrating factor, in this case, lies in the implicit
assumption of the infinite elasticity of female labour and income to absorb
the shocks of stabilization and compensate for any shortfall in household
income. 44/
54. Another point of structuralist criticism of neoclassical economics is
the assumption of the infinite elasticity of the supply of agricultural and
primary product exports in response to devaluation-induced changes in
relative prices. Although sceptical of this assumption, the structuralist
approach does not consider the sexual division of labour in the
agricultural sector as a factor limiting supply response. However, the
literature on structural adjustment and rural women provides abundant
examples of how women's unwillingness and/or inability to sacrifice time
and land to the production of cash crops at the expense of traditional food
crops limits the response of supply to changes in price signals.
Furthermore, it has also been suggested that the low substitutability of
male labour for female labour reduces the ability of men to reallocate
their labour in accordance with changes in market opportunities. 45/ This
has important effects on the welfare of the household and the economic
outcomes of adjustment. Hence, the failure to account for the gender
aspects of resource reallocation in response to price signals may cause a
sub-optimal policy outcome and worsen gender inequality, which in turn
poses a threat to the sustainability of economic reforms.
C. Gender and outward-oriented development
55. It is generally agreed among mainstream economists that outward
orientation in economic development has been the single most important
factor responsible for rapid economic development and the reduction of
inequality in the first and second generations of the newly industrialized
economies and the other developing economies that have opened their
economies to trade in the past decade. Policies of trade liberalization
bring domestic resource allocation closer to international opportunity
costs and shape their production structures in accordance with comparative
advantage. Outward orientation in development policy renders interference
by Governments with trade and the economy obsolete and replaces it with the
policies of better governance that have been identified as those most
conducive to growth, economic stability and poverty reduction. Looked at
from a gender perspective, the long list of virtues of outward orientation
can be expanded by the addition of the positive impact it has had on
women's economic participation. Trade expansion has clearly benefited
women's access to paid employment in many developing countries, albeit with
some qualifications. But in the context of ongoing globalization and the
introduction of new technologies and the ever-changing organization of
production, the employment benefits accruing to women thus far from the
liberalization of trade may be short-lived unless technological upgrading
is matched by an upgrading of skills and better education for female
workers.
56. Even a casual examination of employment trends, economic growth rates
and the expansion of exports as a share of GDP suggests a relationship
between these three factors. Empirical analyses confirm that there is a
strong causal relationship between the expansion of female employment,
particularly in labour-intensive light manufacturing, and patterns and the
rates of export growth. Those developing countries that export an
increasing proportion of their manufacturing output to the North tend to
show a rise in the share of female labour in the manufacturing sectors:
the results of regression analyses undertaken for the study of the impact
of the trade regime adopted by 15 Asian countries show that a 1 per cent
increase in exports as a share of GNP is associated with a 0.2 per cent
increase in female non-agricultural employment. 46/ The exports of those
developing countries that rely on export-promotion development strategies
are best described as female-labour intensive, and the economic growth of
those countries has been as much female led as export led.
57. Outward orientation in development has enabled many developing
countries to make better use of their resources as they have opened their
economies to international competition and brought their production
structures into line with comparative advantage. The female labour force
has been an underutilized and undervalued resource that could be employed
at a lower cost than male labour. Gender-based wage differentials have
reinforced the viability of labour-intensive manufacturing exports to
economies where labour costs are higher, thus enabling the economies that
pursue export promotion to grow faster. The questions whether women have
been able to benefit from the expansion of trade, other than in terms of
greater access to paid employment and whether the benefits are of a long-
term nature have been widely debated in the literature, and the conclusions
reached have not been entirely optimistic.
58. One argument frequently made in the context of this debate is that
opportunities to earn independent incomes tend to strengthen women's
decision-making power in the household and that this positively affects the
treatment of girl-children in the household and helps to break up the
intragenerational perpetuation of the feminization of poverty. Thus,
export production serves women's interests to the extent that it
contributes to an increase in the supply of employment opportunities open
to women. From the perspective of promoting egalitarian gender relations,
trade-related gains in employment have not led to any improvement in the
quality of female jobs. Most remain poorly paid, and gender-related wage
differentials have persisted. 47/ In terms of the occupational and sectoral
distribution of female employment, there has been a notable increase in the
employment of women in trade-related services, where their prospects for
higher remuneration are better.
59. With regard to the future of female employment in export-oriented
industries in the economies where development in the past two decades has
been driven by export expansion, the need for technological upgrading
translates into the need for skills acquisition and better education and
training for female workers. Failing this, the benefits thus far accruing
to women from export-led development will simply vanish with growth.
Recent evidence suggests that the share of female labour in export-oriented
industries is declining as skill requirements shift with shifts in
comparative advantage. This, together with evidence of poor access for
women to retraining, indicates that the gains to women's employment from
the expansion of export-oriented industries may have been short-lived.
60. Despite the prediction that expanding international trade, based on
comparative advantage, must inevitably result in winners and losers, the
anticipated negative effects of competition from developing countries on
female employment in the industrialized countries have not materialized, as
least as far as aggregate employment is concerned. The expansion of
international trade seems, on the contrary, to have created better business
opportunities for women entrepreneurs in developed economies. Business
surveys in the United States, for example, show that women-owned businesses
have a somewhat higher propensity to export and import than other
businesses. A 1992 survey found that the proportion of exporters among
women-owned small businesses was higher than among small businesses in
general. The most recent Census Department figures show that 7.5 per cent
of surveyed women-owned businesses report some share of revenues from
exports, compared to 6.1 per cent of male-owned businesses. Some 22 per
cent of members of the National Association of Women Business Owners said
that they were considering becoming involved in international trade. 48/
61. Analysis of women-owned businesses involved in international trade
shows that women may have an affinity for exporting owing to their
different management style and greater attention to building long-term
business relationships. A more pragmatic explanation would be that women's
businesses are often founded during downturn periods of slow domestic
growth, a situation that prompts business owners to look abroad for better
business opportunities. 49/
V. GENDER IN ECONOMIC POLICY: SOME EXAMPLES
62. Micro-economic theory, dominated by the marginalist paradigm and the
equilibrium perspective, makes only passing reference to the economic
topics of special importance to women. Even less attention is devoted to
such issues at the macro level; gender-specific differences when shown in
macroeconomic data receive no macroeconomic explanation. The models used
in discussing the economics of the household and gender-related issues are
based on assumptions that often harbour male biases. An example of this is
the basic premise of the neoclassical approach, the idea of the individual
as characterized by the well-defined preference function, which is not
compatible with gender differentiation of economic agents because women
often lack control over productive assets and autonomy in decision-making.
50/ Policy advice formulated on the basis of these models is couched in
gender-neutral terms but often leads to gender-specific results that escape
the attention of economic policy makers for lack of the methodological and
statistical tools for addressing them. The result is that, at present,
gender issues in economic theory and policy-making are "hidden by the
invisible hand". 51/
63. Gender inequalities in access to and participation in markets cause
markets to fail to allocate resources efficiently. Factor markets are
particularly important, since their inefficiency can inhibit growth and/or
worsen income distribution. Gender discrimination in these markets leads
to a sub-optimal allocation of resources that entails long-term social
opportunity costs, thus providing a rationale for subsidizing innovative
credit schemes, designed to provide credit to low-income producers and
entrepreneurs. The relative immobility of the female labour force in
response to market signals obstructs allocative efficiency in the labour
market, and there are social opportunity costs in the loss of efficiency
and misallocation of resources resulting from female labour being "locked
up" in non-market work. On the other hand, there are positive
externalities to female non-market work that can be viewed in terms of the
production of a public good and that therefore present a case for public-
policy intervention.
64. Mainstream economists paid little attention to the household until the
last 20 years or so. Thus far, household behaviour has usually been
modelled in economic theory on the behaviour of individual economic agents:
in macroeconomic analysis the household is considered in terms of providing
factor inputs, savings and consumption, and micro-economic analysis
considers primarily its consumption role. Such constructs of micro-
economic theory as "comparative advantage", "utility maximization" and
"preference functions" are applied to the household in the same way as they
are applied to the individual economic agent. The household is treated as a
unit that maximizes the joint utility function of its members. Despite the
analytical shortcomings of the aggregation of individual family members
into a joint utility function, the micro-economic model of the household
claims that it behaves as if it were a single entity maximizing joint
utility and welfare. Gender neutrality is in this case assumed to be
inconsequential and benevolent.
65. The conceptual framework underlying economic analysis and much
development policy-making relies on the representation of the household as
an altruistic collectivity where all available resources are pooled and
distributed efficiently among its members, taking equally into account the
welfare of each member. Despite the fact that this model does not justify
the treatment of the household as a unity (see box) and, as a remedy to
that, simply assumes that altruism prevails in the family, it has been
widely used to analyse and shape a range of development policies and
projects.
66. If equality of outcome entails equality of access to resources, there
are strong gender arguments for directing transfers to women as individuals
in order to avoid leakages at the household level. It has been rightly
argued that education, health care, credit and food are not "household
public goods"; 52/ they are individual goods that are rival and exclusive
in consumption. Research shows that failure to account for gender-based
asymmetries in the intrahousehold allocation of resources weakens
development projects. Policies directed at raising the productivity of the
agricultural sector or developing entrepreneurship do not achieve the
desired results unless they take into account the fact that within a single
household separate economic accounting units exist and the pattern of the
exchange of labour and distribution of resources among them reflects the
differences in the bargaining power of its members, which in turn depends
on their entitlement. Women, however, are usually considered to be
entitled to less and, as a result, their bargaining power is weaker. In
this respect, the cooperative conflict model is a better tool for
development policy-making, because it provides a rationale for an
intrahousehold approach to policy formulation. Currently, however, the
cooperative conflict model, although widely discussed in the literature on
human development and the structuralist perspective on macroeconomic
policy-making, remains more of a dissent against the neoclassical unitary
approach than an active tool of development planning.
THE HOUSEHOLD MODELS IN ECONOMIC THEORY
1. New household economics: the joint welfare maximization model
The model extends the micro-economic framework of maximization
behaviour to the analysis of the household. To deal with the problem of
the aggregation of individual preferences into a joint welfare function,
the model deploys an assumption that "since blood is thicker than water ...
preferences of different members [of the household] are interrelated by a
'social welfare function' which takes into account the deservingness or
ethical worth of the consumption levels of each of the members. The family
acts as if it were maximizing their joint welfare function". a/ The model
also assumes maximizing behaviour, stable preferences and equilibrium in
implicit or explicit markets to provide a systematic analysis of the
household. The problems which might cause maximization failure, such as
utility comparisons and joint utility maximization, are addressed by
assuming implicit markets and altruistic behaviour of the household head.
b/
2. New institutional economics: implicit contracts and household
bargaining model - cooperative conflict model c/
The new institutional economics focuses on the evolution of social
institutions that create the context in which individual decisions are
made. It views the household as an institutional mode of production and
exchange. The household is seen as an institutional response to basic needs
based on long-term constructs between individuals related by birth or
marriage. Decision-making within the household reflects contractual rights
and obligations, as well as economic incentives. Institutional economics
rejects the assumption of altruism, postulating differences in terms of
domestic trade that are the function of the relative bargaining power of
participants. Deploying the bargaining format of the institutional
economics, the cooperative conflict model addresses issues of gender and
power within the household. This model assumes that members of the
household cooperate as long as the outcomes of their cooperation are
preferable to those without cooperation. In this assumption, it departs
from utility maximization by positing that individuals in the household do
not bargain solely on the grounds of their self-interest, i.e., "utility".
Instead, their bargaining strategies depend on perceived notions of what
they are entitled to. Entitlement depends on perceived contributions, and
because women's contribution is largely "invisible", no matter how much
time or energy they expect, they are considered to be entitled to less.
________________________
a/ P. Samuelson, "Social indifference curves", Quarterly Journal of
Economics, vol. LXX, No. 1 (1956), p. 10.
b/ G. Becker, A Treatise on the Family (Cambridge, Mass., Harvard
University Press, 1991).
c/ A. K. Sen, "Gender and cooperative conflicts", in I. Tinker, ed.,
Persistent Inequalities (Oxford, Oxford University Press, 1990), pp. 123-
149.67. Economic growth, inflation and monetary and fiscal policies may
each have a differential impact on women. Yet in its discussion of
aggregates, macroeconomics entirely omits gender issues. This inadequacy
of macroeconomics stems from the neglect of one whole area of production;
the unpaid production of human resources. The work carried out by women in
reproduction and the maintenance of human resources is excluded from
national accounts, and the link between the paid and the unpaid economy is
therefore lost. This has important practical consequences. When
macroeconomic policies are formulated, the gender dimension of the
consequences of changes in market signals and of the reallocation of
resources is lost. Implicit in this approach is that women's ability to
compensate at the household level for the decline in output and for changes
in the composition and level of aggregate demand is treated as infinitely
elastic, obscuring the impact of macroeconomic policy on the human resource
base of economic activity. This in turn is likely to have a negative
impact on international economic competitiveness, balance of payments and
economic growth, as the shortfall in human skills resulting from the
adverse impact of macroeconomic policy remains unaccounted for and
unplanned for in terms of appropriate supportive measures and resources,
thus rendering the policy unsustainable.
68. Repressed financial markets and credit rationing favour capital
intensity and may perpetuate discrimination. Small enterprises, including
the bulk of businesses owned by women, are forced to seek credit in the
informal market where they are obliged to pay interest rates several times
higher than in the formal financial sector. To the extent that financial
repression discourages the development of small-scale production, it hurts
the economic participation of women. Regulated credit hurts women
indirectly by interfering with the efficient allocation of resources and
inhibiting economic growth.
69. Policies of trade liberalization and external openness, together with
supporting macroeconomic policies involving exchange-rate management and
the maintenance of international competitiveness, have been shown to be
beneficial for women in terms of improving their economic position and
their bargaining power in the family. The loss of competitiveness and real
exchange-rate appreciation, on the other hand, tend to affect women to a
greater extent than men because employers still feel free to discriminate
against them.
70. The link between taxation policies and employment, structural change
and economic growth can be better understood if the gender aspects of
taxation are addressed at the outset of policy-making. The main taxation
issues that have a gender-specific impact are the unit of taxation, the
progressiveness of taxation, the balance between direct and indirect
taxation and the availability of tax rebates relating to dependency status
and child care. The importance of these issues varies according to the
level of economic development: while to women in the industrialized
economies personal taxation issues are of greater importance, in developing
countries, where women's income is often below the taxable threshold, it is
the balance between direct and indirect taxation, sectoral taxation
policies and the progressiveness of the tax schedule that are relevant to
women's employment and access to productive resources.
71. More progressive personal taxation schedules, the choice of joint or
individual income as the unit of taxation and reduced reliance on
regressive taxation will all tend to be to the advantage of women and will
provide incentives for women to seek paid employment. Provision for tax
rebates for such expenses as child care is also desirable in order to
encourage high participation rates. Taxation that penalizes exports and
the agricultural sector tends to worsen the economic position of women.
VI. CONCLUSIONS: STRATEGIES FOR INCREASING THE PARTICIPATION
OF WOMEN IN ECONOMIC DEVELOPMENT
72. Economic policies and development strategies affect women everywhere,
often to a greater extent than men. Some have the potential to liberate
women's skills and contributions while others intensify the conditions
which prevent that from happening. Cross-country analyses of access by
women to productive employment and entrepreneurship show that a growth
strategy of protection and capital intensity has been inimical to promoting
gender equality in access to markets. It also shows that macroeconomic
policies deployed to address allocative distortions have often worsened
women's position relative to men. It is important, however, to keep in
perspective that the "negative impact" on women of structural adjustment
policies has been due first of all to the rigidity of their socially
ascribed roles and their limited access to productive resources, which were
already in existence prior to the introduction of economic reform. Another
reason why economic policies sometimes lead to gender-asymmetric outcomes
is that gender remains outside the context of their formulation. Here, the
issue is not limited to the gender-inequitable outcomes of macroeconomic
policies: it is the efficiency and sustainability of those policies that
is at stake if gender remains outside the subject-matter of macroeconomic
development planning.
73. Strategies for the integration of women in development in the 1990s
have to be focused on introducing gender awareness into every step of
macroeconomic policy-making and development planning. Forging the link
between macroeconomic policy instruments and the ultimate goal of
development - poverty alleviation - requires the explicit articulation of
the gender dimension of all economic activity in both the theory and
application of macroeconomic development. Gender analysis should be an
integral part of the design of policies and programmes aimed at promoting
economic growth, stability and the alleviation of poverty.
74. Taking gender into account in development policies will require a
modification of the underlying assumptions about development. Such a
modification would entail combining efficiency and equity factors in the
conceptualization and implementation of development policies. The
elimination of gender-based distortion in the allocation of resources
should be seen as complementary to efficiency, rather than in opposition to
it. Furthermore, if equity in outcomes of the development process in terms
of gender entails equality of opportunity, then it should be approached on
the basis of the recognition of similarities rather than differences
between women and men. For example, an extra cost of maternity leave and
child care to employers of women should not function as a tax on female
employment.
75. A central conclusion of the present analysis is that all economic
policy questions, at the national or international level, need to be
subject to examination in terms of their gender dimensions. Careful
attention to this procedure can help ensure that the effective mobilization
of women for development is a central part of development policies,
planning and programmes. A possible future step would be to begin to
develop theoretical and econometric models that could begin to factor in
gender issues and thereby help refine economic policy decisions.
Notes
1/ United Nations publication, Sales No. E.95.IV.1.
2/ See, for example, the reports of the Secretary-General on the
negative effects of the international economic situation on the improvement
of the status of women (E/CN.6/1990/3); the integration of women in the
process of development (E/CN.6/1992/8); and women in extreme poverty:
integration of women's concerns in national development planning
(E/CN.6/1993/3).
3/ See Commonwealth Secretariat, "Engendering adjustment for the 1990s";
report of a Commonwealth expert group on women and structural adjustment
(1989); and "Women's economic potential to overcome poverty"; advance
report of the findings and recommendations of the International Round Table
on Women's Economic Potential to Overcome Poverty, Bonn/konigswinter, 27-30
November 1994.
4/ Diane Elson, "Gender issues in development strategies"; paper
prepared for the United Nations seminar on the Integration of Women in
Development, Vienna, 9-11 December 1991).
5/ The two-stage "gender planning" model developed by Moser
distinguishes, from both a policy and an operational viewpoint, between the
practical or present interests of women (current inadequacies in the living
and working conditions of women, for example) and strategic needs which
target more egalitarian gender relations, either by reducing the basis of
women's economic disadvantage or by modifying the gender division of labour
so that it does not constrict women's income earning potential (C. Moser,
Gender Planning and Development: Theory, Practice and Training (New York,
Routhledge, 1993)).
6/ Rosi Braidotti and others, Women, the Environment and Sustainable
Development: Towards a Theoretical Synthesis (London, Zed Books, 1994), p.
82.
7/ Susan Bullock, Women and Work (London, Zed Books, 1994), p. 30.
8/ World Labour Report, 1994 (Geneva, International Labour Office,
1994).
9/ United Nations Population Fund, National Perspectives on Population
and Development: synthesis of 168 national reports prepared for the
International Conference on Population and Development, 1994, p. 30.
10/ See Shirley Nuss and others, "Women in the world of work:
statistical analysis and projections to the year 2000", Women, Work and
Development, No. 18 (Geneva, International Labour Office, 1989).
11/ Economic Commission for Europe, "Regional review and appraisal of
the Nairobi Forward-looking Strategies: report by the secretariat"
(E/ECE/RW/HLM/1), 15 August 1994.
12/ The Economist, 5 March 1994.
13/ International Institute of Labour Studies, "Women workers in a
changing global environment: framework for discussion"; paper prepared for
the International Forum on Equality for Women in the World of Work:
Challenges for the Future, Geneva, 1-3 June 1994.
14/ See P. Collier, "Women in development: defining the issues",
Policy, Planning and Research Working Paper (World Bank, 1988).
15/ Ibid.
16/ The World's Women, 1995: Trends and Statistics (United Nations
publication, Sales No. E.95.XVII.2), p. 113.
17/ See Economic Commission for Europe, "Women's access to employment
and entrepreneurship" (E/ECE/RW/HLM/4), 1994.
18/ Occupations that are likely to generate most of the new jobs in the
period 1990-2005 are: salespersons (retail); registered nurses; cashiers;
general office clerks; truck drivers; general managers and top executives;
janitors and cleaners, including maids and housekeepers; nursing aides,
orderlies and attendants; food counter and related workers; waiters and
waitresses; teachers (elementary and secondary school); receptionists and
information clerks; system analysis and computer scientists; food
preparation workers; child-care workers; gardeners/groundkeepers;
accountants and auditors; computer programmers; and guards; of these, 13
occupations are on the list of occupations with a very high concentration
of women (see The World's Women, 1995, and Economic Commission for Europe,
E/ECE/RW/HLM/1 and 2, 1994).
19/ The Economist, 23 August 1986, p. 13.
20/ S. Washington, "Women at work", OECD Observer, No. 176 (1992).
21/ National Association for Female Executives, Women in the American
Workforce and Power Structure: A Contemporary Snapshot (June 1993).
22/ X-inefficiency is the notion that individual firms - and economies
as a whole - are more likely to operate inside the frontiers of their
production possibilities than on them, because producers do not exert
sufficient effort at all times to maximize output and there is a gap
between actual and minimum attainable supply costs. The concept suggests
that the costs of increasing output are zero and that therefore output can
be raised, when X-inefficiency exists, without corresponding increases in
factor input.
23/ Angus Maddison, Phases of Capitalist Development (New York, Oxford
University Press, 1982).
24/ There is no consensus in the literature on a definition of
microenterprises, which is typically a function of the number of persons
employed in the business. The Georgia Institute of Technology has found 50
different definitions used in 75 countries (World Bank, "Employment and
development of small enterprises", Sector Policy Paper, (Washington, D.C.,
1987)). Definitions may be based on capital invested, or the number of
employees, or other criteria. According to ILO, small enterprises include
"... modern industrial firms of up to 50 employees, family units of three
or four people, village industries, associations, companies, cooperatives,
owner-operators, mini-firms and the self-employed in the non-structured
sector of the economy". While there is no lower limit to the size of a
"small enterprise", fixing an upper limit usually depends on the interests
of the person or body concerned and on the particular economic sector where
the definition is to be used. From the managerial perspective, a small
enterprise may be described as one where operational and administrative
decisions are made by one or two people, but definitions vary when small
enterprises are considered from the perspective of financiers, labour
officers, traders, services personnel or manufactures. In the World Bank
sector policy paper on small enterprises it is suggested that the upper
limit of $250,000 for fixed assets should be used to classify an enterprise
as "small", but no lower limit is set. Whatever the definitions used and
despite the diversity in terminology (small enterprises, small and medium-
scale enterprises, microenterprises, mini-firms, etc.), it seems to be a
fact that women's enterprises are generally among the very smallest in the
sector.
25/ UNCTAD secretariat, "Women as entrepreneurs and decision makers in
the least developed countries"; paper prepared for the Expert Group Meeting
on Women and Economic Decision-Making, New York, 7-11 November 1994.
26/ M. Baydas, "Discrimination against women in formal credit markets:
reality or rhetoric?", World Development, vol. 22, No. 7 (1994), p. 1075.
27/ S. Joekes and A. Weston, Women and the New Trade Agenda (United
Nations Development Fund for Women (UNIFEM), 1994), p. 67.
28/ M. Berger, "Giving women credit: the strengths and limitations of
credit as a tool for alleviating poverty", World Development, vol. 17, No.
7 (July 1989), p. 1021.
29/ S. Joekes and A. Weston, op. cit., p. 66.
30/ C. Grown and J. Sebstad, "Introduction: towards a wider perspective
on women's employment", World Development, vol. 17, No. 7 (July 1989), p.
937.
31/ Women in a Changing Global Economy: 1994 World Survey on the Role
of Women in Development (United Nations publication, Sales No. E.95.IV.1),
p., 85.
32/ National report of Kenya, 1994.
33/ M. Berger, loc. cit., pp. 1019-1020.
34/ UNCTAD Expert Group Meeting on Women in Development in the Least
Developed Countries, held at Niamey on 24 January 1995.
35/ National report of Ghana, 1994.
36/ M. Baydas, loc. cit., p. 1074.
37/ D. Adams and J. von Pischke, "Microenterprise credit programs: deja
vu", World Development, vol. 20, No. 10 (1992).
38/ National report of Ghana, 1994.
39/ C. Gladwin, ed., Structural Adjustment and African Women Farmers
(Gainesville, University of Florida Press, 1991).
40/ M. Baydas, loc. cit.
41/ P. Collier, op. cit.
42/ National report of Namibia, 1994.
43/ W. A. Lewis, The Theory of Economic Growth (London, Allen and Unwin
(1955). Cited in D. Elson, "Gender issues in development strategies";
paper prepared for the seminar on integration of women in development,
Vienna, 9-11 December 1991.
44/ D. Elson, "Gender-aware analysis and development economics", Journal
of International Development, vol. 5, No. 2 (1993), pp. 237-247.
45/ C. Blackden and E. Morris-Hughes, Paradigm Postponed: Gender and
Economic Adjustment in Sub-Saharan Africa. Human Resources and Poverty
Division, Technical Note No. 13 (World Bank, August 1993), p. 8.
46/ F. Perkins, "Are women benefiting from economic development?"), IPA
Review, vol. 46, No. 4 (1994), pp. 45-49.
47/ S. Joekes and A. Weston, op. cit., p. 59.
48/ B. Norton, "Why women's businesses are getting ahead in exporting",
Working Woman, vol. 19, No. 7 (July 1994).
49/ Ibid.
50/ D. Elson, loc. cit., p. 240.
51/ S. Feiner and B. Roberts, "Hidden by the invisible hand:
neoclassical economic theory and textbook treatment of race and gender",
Gender and Society, vol. 4, No. 2 (June 1990), pp. 159-181.
52/ I. Palmer, "Social and gender issues in macro-economic policy
advice"; paper presented at the International Round Table on Women's
Economic Potential to Overcome Poverty, Bonn/Konigswinter, 27-30 November
1994.
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