Macroeconomics and Gender

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About the Book

It Is Now Widely Recognized that gender analysis has both challenged and enriched many of the standard assumptions and concepts that inform economic analysis of different kinds, whether to do with paid work or unpaid work, peasant studies, care labor and many other areas. Despite this, changes in economic policies have been few and far between, and most do not translate into women-friendly economic policies. Nor have the important contributions of women's studies research to the field of economics standardly seen as a male discipline - been given its due importance or recognition.

This collection of essays by some of the best known academics and practitioners in the fields of economics, women's studies and development, examine a wide range of areas in which women's studies has made crucial contributions. They look at the market, the money economy, at development policies, at water rights and at macroeconomic methodologies, in order to address the question of why gender matters. Together they bring new insights and new approaches to the question of how a gender analysis of macroeconomic policies needs to be given wider acceptance and to be integrated into policy and planning. Accessibly written and rigorously researched, this book will be useful for academic and general readers, and for those in the related fields of economics, development and gender studies.

About the Author

RITU DEWAN heads the Centre for Women's Studies, Department of Economics at the University of Mumbai, and is also the Coordinator of the Centre for Human Development. She has published widely and has over 20 books and 60 articles on aspects of development economics, gender economics, informal sector, rural economy, urban issues, labor markets, small-scale industries, environment, displacement, health, conflict and human rights. She is also a consultant to the Planning Commission of the Government of India, United Nations, ILO, as well as Honorary Advisor to the Kashmir Foundation for Peace and Democracy. Her research focus is generally the result of the demands of several on-going movements.

 K. SEETA PRABHU works with United Nations Development Programme, India. She has guided and supported the preparation of a large number of sub-national Human Development Reports (HDRs) in India. Previously, she was Professor of Development Economics at the University of Mumbai and has also been Visiting Professor at Jawaharlal Nehru University, Delhi as well as at the universities of Oxford and Erasmus, Rotterdam. She has served as Advisor to the Planning Commission, India, as well as the Reserve Bank, state governments and others. Key among her publications are: Economic Reform and Social Sector Development: A Study of Two Indian States and Reforming India's Social Sector: Poverty, Nutrition, Health and Education.

Introduction

The issue of engendering macroeconomic theories and policies has assumed special significance in the context of the increasing importance of macroeconomic constructs and their differential impacts across genders. Gender inequalities at micro and meso levels have macro implications, there being a clear two-way interconnection. However, the polemics as well as the conceptual analysis of inter-linkages in developing countries are still in the formative stage, as are interconnected methodological issues. The fundamental issue is that analysis of engendering macroeconomic theories as well as policies has to be viewed in the context of the market which is not only the primary economic concept but also the main operative reality today. It is being increasingly accepted that markets are imperfect rather than 'perfect' as traditionally assumed. The isolation of the examination of gendered macroeconomic issues from fundamental alterations in market structures therefore needs to be bridged.

One of the main consequences of increasing market imperfections is the acceptance of the reduction of the poor, and amongst them particularly women, into inactive agents in analytical concepts as well as in reality, with little or no role to play in the determination of the nature of their existence either as a class or a group. The urgent task is therefore to re-examine the gendered role of the poor in the political economy of macroeconomics as translated in the actuality of governance, and hence to assess and argue for a more equitable and gender-aware systematic role for State intervention in macro issues.

In recognition of this vacuum in polemics as well as conceptual analysis, a two-day national conference on 'Engender in] Macroeconomics and Macroeconomic Policies' was organized in September 2005 by the Centre for Women's Studies, Department of Economics, University of Mumbai, supported by the Department of Women and Child Development (DWCD) Government of India, and the United Nations Development Programme, India Country Office under a joint project Promoting Gender Equality. This volume contains selected papers presented at the conference (and subsequently revised and rewritten) which together bring to the fore theoretical possibilities and empirical implications of incorporating a gender dimension into macroeconomics.

Wandana Sonalkar's essay on 'Gender and Development Microeconomic Foundations and Macroeconomic Realities' focuses: on current controversies about measuring the impact of recent global policy changes and economic developments on the conditions of life of the people in developing countries such a: India. The author argues that one useful way to adequately address: the controversies would be to re-examine the underlying concept: used in the construction of measures of development in terms 0 the microeconomic foundations of macroeconomics from a gender perspective. Accordingly, the concept of capabilities as put forward by Amartya Sen is examined through a gender lens both as: supplement to incomes in measuring well-being, and as an alternative to utilities as a basis for measuring welfare.

The essay argues that the characterization and quantification of poverty in areas where feudal production relations and traditional forms of activity prevail involves certain assumptions about the framework in which women and men exercise choices about world and consumption. This includes analyses of whether the extension of the scope of the market widens or restricts the set of alternative: available in the context of wide-ranging changes in the macroeconomic environment as well as in economic policy.

In their essay, Engendering Market Structure: A Normative Analyses, Ritu Dewan and Azania Thomas examine how markets reflect the 'behaviors of different groups of people' and thus form part of an intrinsic blueprint that dictates the functioning and outreach of macroeconomic theory as well as policy. They argue that the definition of Pareto-efficiency which determines efficiency in the market is exclusive when defining circumstances of gender discrimination; for example, the Pareto efficient solution of a monopsonist adopting wage discrimination according to gender is clearly in conflict with the principle' of egalitarianism. Yet the strategy of profit maximization by a wage discriminating monopsonist on the basis of gender can easily be mistaken for an outcome that is socially inefficient. The process of policy formation therefore needs to carefully take into account the kind of normative measure being used especially when examining the links between gender discrimination and market failure. Gender discrimination mayor may not lead to 'inefficient' outcomes within the context of imperfect markets. The authors identify existing situations where gender discrimination does lead to market failure and where there exist possibilities for policy interventions to develop a stronger basis both on egalitarian and social efficiency grounds. Illustrations depicting gender sensitive barriers to market entry include the lack of access to information where women, among some of the many socially disadvantaged groups, are far worse off when it comes to being isolated from, say, credit or labour markets resulting primarily from the dictates of historically defined gender constructs.

Interconnections between gender-sensitive barriers to market access allow policy recommendations to target similar solutions that would reduce discrimination on the grounds of market efficiency. When one examines situations where gender discrimination is socially efficient, then other normative criteria such as distributive justice or access to equal opportunities are more likely to make gender sensitive policies effective.

Although gender-related development issues have prompted serious debate, the absence of appropriate gender-aware macroeconomic analytical tools has penalized quantitative analyses. For economy-wide implications, the impact of macroeconomic policy can be analyzed succinctly by using macroeconomic models. Anushree Sinha discusses the constraints of descriptive studies in providing a robust causality in her essay 'Engendering Macroeconomic Modelling for Policy Analysis'.

The essay reviews the literature on engendering macroeconomic models including the issues of measuring and incorporating non-market work into a macro framework. Generally however, macroeconomic analysis and modelling is carried out as if Pl.0 differences exist between women and men. Yet the evidence from studies that have used gender-aware models confirms that better predictive results are obtained with engendered data. More specifically, trade related modelling methodologies such as the Computable General Equilibrium (CGE) models have the advantage of ascertaining general equilibrium effects on different policy options. The economy wide general equilibrium models need to consider the details of gender composition of the labour market and household work and capture information on non-market work.

In this essay, the proposed CGE model is based on the construction of an engendered Social Accounting Matrix (SAM). The SAM is developed with sectors that have important shares of women workers in different economic activities, the mapping into different types of households being based on NSSO's 55^th Round survey data.

Taking the debate further and focusing on institutional dimensions of including gender in macroeconomic frameworks, Romar Correa in his essay 'Macroeconomic Complexity and Gender Economics' explores the role of capital as a principle coordinating both production and exchange. The main objective of the analysis is to examine how the strategies employed by different agents intersect and evolves, leading the system in one direction rather than another. Surveying the literature on norms and institutions, and moving further from micro foundations, the essay appraises the post-Keynesian link between aggregate phenomena and gender, concluding with an approach from the latter end of the divide which focuses on the structural determinants of gender.

It is argued that the relationships between people endure in institutional contexts which both enable and constrain tasks. Long term contracts describe the non-market activities that take place within households wherein are contingent commitments, liquidity Problems, the acquisition and maintenance of capital goods, and borrowing and lending. As households enter into economic transactions with each other, the macroeconomic coordination problem reappears. If one forward contract is violated, a unit will not receive expected income and will be rationed in other markets.

Ritu Dewan's essay, Indian Taxation Systems and Policies: A Gendered Critique', that follows analyses the fiscal dimension in the Indian context, an area that has remained relatively unexplored despite own-source revenues being the fulcrum of the ongoing public debate on governmental expenditures, provisioning and pricing. Consequently, the fundamental focus is primarily on examining levels of gender non-neutrality inherent in the theoretical and empirical underpinnings of the Indian taxation system and its policies including identification of biases in major revenue-collection methods separately for direct and indirect taxes.

Analysis is conducted both in economic terms as well as in the context of the prevailing extra-economic gendered reality. The implicit and explicit biases in both direct and indirect taxes examined include those relating to personal income tax, gift tax, property tax, wealth tax, corporation tax and VAT. Aspects focused on include female-headed households, individual and household decisions about consumption, as well as production and investment, and also different personal laws and regulations.

Other illustrations of patriarchal bias presently operative in the Indian revenue system include the issue of standard deductions; lack of tax concessions for child care; lack of sensitivity in pension schemes for female-headed as well as single-person households; non-existence of uniform conditional ties relating especially to medical insurance; gender neutral tax laws for women-only and also women-centric Cooperatives/ NGOs/ SHGs.

Taking the discussion on fiscal issues further, Anjali Goyal's essay, 'Women's Empowerment through Gender Budgeting: A Review in the Indian Context', explores the effectiveness of gender budgeting in its present form. The paper emphasizes that most of the activities currently carried out in the name of gender budgeting are ex post in nature and oriented more towards gender audits. The initiatives reviewed include resource allocation and expenditure, sectoral audits, macro indicators like maternal mortality rate, access to health, literacy rates, participation in local governance structure including fiscal decentralization, employment statistics, and on.

The essay suggests that in isolation none of the measures is: effective tool. Also reflected is the concern expressed in PI: documents at the slow progress in achieving empowerment women despite commitments at the policy level and at the plan nil stage. An alternative approach is discussed under gender budgeting initiatives to remedy the situation.

Turning to the field level experiences of women, Alka Parikh discusses issues relating to water in her essay, 'For a Few Pots Water: Water Rights and Subsidies'. It is argued that the two central aspects of concern are availability as well as equitable allocation of water. The National Water Policy has been allocating the highest priority to drinking water, but the priority does n seem to have been operational zed adequately, with water allocation continuing to be urban centric and with a strong elitist bias. Parikh discusses "Issues of ground water and its privatization, proper regimes, costing and subsidies, the difficulty in raising water price being perceived as a political issue rather than an economic on The essay ends with a suggestive model for water allocation which includes the declaration of ground water as community property at least for satisfying domestic needs, exclusion operation and maintenance costs from subsidies, and the conferring: of water rights on women.

Highlighting issues relating to rights of women in the heal sector, Ravi Duggal in his essay 'Engendering Health Rights the New Global Economy' draws attention to health increasing becoming a trade able commodity, its delivery being privatized and the role of corporate increasing, thus rendering India high!: vulnerable. The GATS mechanism accentuates the problem India is unable to use the exemption clause in GATS negotiation for the health sector owing to the prevailing political economy having signed the WTO treaty on IPR, the country is moving closer to international prices of drugs.

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