Want a strong economy? Electing females can help

Gender equality and female empowerment are development buzz words with bite.  And with good reason. Researchers have shown gender inequality in education reduces economic growth and women are typically recognised as better microfinance managers [pdf].

Apparently female parliamentarians are important as well – World Bank researchers have associated them with a reduction in corruption.  The UN has even included increasing the number of female legislators as a key outcome of Millennium Development Goal 3.

In the latest Devpolicy Discussion Paper (peer reviewed and forthcoming in Applied Economic Letters), we explore whether having more female legislators affects broad economic outcomes. Our research covers 119 democracies over the last four decades.

We find that, for the average democracy, each percentage point of female parliamentary representation increases annual per-capita economic growth by around 0.16 percentage points. Our estimates account for the effects of other variables on economic growth and also potential reverse causality from economic progress to improved gender representation.

Why this is the case requires further research. We try to separate the impact of having more female MPs from the impact of broader attitudes to gender. The ability of elected females to achieve improvements in the overall state of the economy is perhaps driven in part by the fact that female MPs have to break through a ‘glass ceiling’ to enter parliament in most countries.  These women may on average be quite extraordinary and thus have a greater effect on policy outcomes than the average male parliamentarian.

Globally, there has been a reassuring upward trend over the last three decades in the representation of women in parliament.  However, it remains that on average less than one in five seats in national parliaments are held by women. Some countries have no females in their parliaments.

Source: Paxton, P., Green, J. and Hughes, M. (2008) Women in Parliament, 1945–2003: Cross-National Dataset, Inter-university Consortium for Political and Social Research, Ann Arbor, MI. World Bank (2012) World Development Indicators.

Strikingly, the Pacific Island countries lag behind, and have failed to keep up with improvements in female representation globally over recent decades.  Only Samoa and Timor-Leste have female shares in parliament exceeding 4%.  Compare this number with a global average of 18% and our Pacific neighbours are starting to feel a little lonely.

Increasing the number of female legislators is clearly a matter for sovereign nations. Yet donors have a role to play in communicating the broad benefits of improving female representation in the parliament. This is especially important in the Pacific. The challenges are large: in PNG, for example, a bill to reserve a minimum number of seats for women failed to win support in late 2011.

Ultimately, there is growing evidence that there are economic and other dividends to be gained from removing the barriers for females to enter politics.  Hopefully our Pacific Island neighbours will start to take note.

Dinuk Jayasuriya and Paul J. Burke are Research Fellows at the Crawford School of Public Policy.

Dinuk Jayasuriya

Dr Dinuk Jayasuriya worked as a Research Fellow at the Development Policy Centre in 2012 and 2013. He currently undertakes research and evaluation work for the Asian Development Bank and the Australian government and operates as the Research Director for Red Elephant. He previously worked as the evaluation advisor to the Asian Development Bank’s impact evaluation committee and as a Monitoring and Evaluations officer at the World Bank Group.

Paul J. Burke

6 Comments

  • I think this kind of research (produced by male economists, I notice) treads a potentially counter-productive path, it really worries me. I don’t think we should be trying to argue for women’s representation in economic terms. It paves the way for people to then produce research showing the opposite (of which there is some) and then argue over the numbers, losing the point that women are half the population therefore they ought to be half the decision-makers. It also essentialises and limits women who do gain positions of power. They end up being disproportionately punished for not living up to the superior standards expected of them.

    • Thanks a lot for the comment, Melanie. I’d say it’s the job of researchers to try to understand the world a little better, which is what we try to do. We don’t say that economic factors are all there is to consider.

  • Thanks Scott for your comment. We agree that our hypothesis is not the only possibility; we were thinking of the average country and control for the possibility a fairer society is driving the result. There could be an ideal limit (i.e. is there a critical mass of females in parliament where collectively they can influence legislation that increases growth?) and as you point out diminishing marginal returns. And there are likely to be several channels via which this macro effect could work; corruption and public goods provision are two potential channels. Chattopadhyay and Duflo (2004, Econometrica) find that women invest in different types of public goods (e.g. more drinking water provision, but less of some other things). Other interesting areas to look at are whether there is a difference between developed and developed countries. Clearly, more research is needed to see how such factors might affect aggregate economic growth.

  • The bar graph above is revealing for PNG. No wonder those small island states with much fewer resources compared to PNG have much better development indicators.

    PNG 2012 National Election should be a turning point for all Papua New Guineans. VOTE FEMALE CANDIDATES.

  • Thanks for the interesting post and paper. You note that it is not clear why more female representation leads to better economic outcomes, and hypothesize that because women must go through greater obstacles to become representatives, they maybe more talented than their male peers and thus govern better. I am not sure this is the most likely explanation. For one thing, as female representation gets higher, the barriers to female participation should be lower. One would then expect diminishing returns to the excellence of female parliamentarians compared to their male counterparts. Two alternative explanations may be better candidates. First, as you note, women tend to be less corrupt than men. This is almost certainly a result of the social processes that shape the experiences and expectations around women, rather than some essentialist claim. In any case, less corrupt governance may lead to higher growth. A second possible explanation is that female leadership is more likely to focus on the provision of basic social services, such as sanitation, health care, and education, than their male counterparts (again, likely a result of their socially prescribed roles as carers). Perhaps governments that provides better social services and social protection lose much more GDP to ill health, and gain more GDP by having an educated workforce. This is all speculative, but the question of why you find this correlation is important. Hopefully readers can look forward to a follow up paper.

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