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close this bookToward Gender Equality: The Role of Public Policy (WB, 1995, 88 p.)
close this folderChapter three
View the documentPublic Policies Matter
View the documentEqualizing Opportunities by Modifying, the Legal Framework
View the documentLand and Property Rights
View the documentLabor Market Policies and Employment Law
View the documentFamily Law
View the documentWomen's bargaining position in relation to household
View the documentFinancial Laws and Regulations
View the documentMacroeconomic: Policies
View the documentInflation tends to hit women harder than men.
View the documentSectoral Investments
View the documentUsing Targeting Measures to Narrow the Gender
View the documentInvolving Beneficiaries in Public Policy
View the documentGenerating and Analyzing Gender-Desegregated Data
View the documentWorking in Collaboration
View the documentStrengthening International Policies to Meet New Challenges
View the documentConclusions

Inflation tends to hit women harder than men.

Such reforms generally include two kinds of necessary policies. The first emphasizes macroeconomic stability and the removal of price distortions: the second promotes labor-demanding growth in agriculture and industry and better. mote accessible basic social services. mightily in education, health care and water supply. Macroeconomic stability can be achieved by reducing large current account and government budget deficits and by curtailing excessive money and credit expansion. Correct pricing of foreign exchange and of domestic goods and services facilitates trade and investment and promotes growth Reforms of trade and price incentives encourage job creation and higher earnings.

In shots. broadly based economic reforms benefit the poor, as the experiences of diverse countries have shown. Data from the LSMS and similar studies confirm that in Costa Rica, Ethiopia. Than Indonesia, Peru, the Philippines, and Tanzania, declines in poverty rates have accompanied economic reforms. Because of underlying gender inequalities, reductions in poverty do not necessarily improve the economic status of women. Nonetheless. although empirical evidence on changes in women's welfare following reforms is scarce, data from the Philippines suggest that for women. economic reform is by improvements in social indicators and important employment gains (box 3.4). An analysis of household data from Peru indicates that reforms there have not only led to renewed growth and reduced poverty but have also improved the status of female-headed households (box 3.5).

Despite their seminal role in encouraging sustainable. long-term growth. some economic reforms involve transitional costs. for two reasons: the need to implement radical shifts in government policy, and the lag. perhaps of years, between acceleration of economic growth and the realization of the ...

Box 3.4 social progress and labor force gains for women in the Philippines

The Philippines began implementing economic reforms in the early 1980s. While political turmoil and some policy slippage have weakened GDP growth over the period and led to the need for further reforms, quality of life indicators have improved during adjustment. For example, by 1990 the incidence of absolute poverty had declined by about one-third (to approximately 20 percent of the population). Maternal and infant mortality rates also declined over the period: in 1980 the infant mortality rate was 52 per 1,000 live births, but by 1990 it had fallen to 41 per 1,000 births (Johansen 1993).

The percentage of the population with access to safe drinking water increased between 1980 and 1990, from 65 to 93 percent of the urban population and from 43 to 72 percent of the rural population. The figures for sanitation services showed the same increase, climbing from 81 percent with access in 1980 to 98 per cent in 1990 among urban dwellers and from 67 to 85 percent among those in rural areas. Secondary school enrollment rates for boys and girls also showed gains. Girls and boys have traditionally reached similar educational levels in the Philippines, a trend that contributed to women's gains in the labor market during adjustment in the 1980s. While labor force participation rates for men rose only slightly, the rates for women increased dramatically, from 23 to 37 percent.

At the same time, women's wages as a percentage of men's grew from 71 to 80 percent between 1978 and 1988 (Tzannatos 1995). A recent study of a low-income community in Manila found that in some private sector jobs women earn more than men, reflecting in part the high educational level among women in the sector. Earnings in the informal sector are generally low for both women and men. although some women have been so successful in their informal sector businesses that their spouses have opted to leave low-paying jobs in the formal sector to participate in their wives enterprises (Moser 1994). benefits of growth by large segments of the population. The short-term costs can include increases in food prices as subsidies are removed temporary restrictions on credit to control monetary expansion, and cuts in public spending as governments attempt to control budget deficits and reorient spending toward the most important public services. Moreover, inequalities in access to and control over resources and in entry into markets hamper some groups in taking advantage of the opportunities created by economic reform For example, people who are unable to acquire new skills may remain for some thee. Gender inequalities in access to and control over land in rural areas can keep women farmers from taking advantage of changes in the relative prices of tradable and non tradable crops.

Box 3.5 macroeconomic reform and improved living standards in Peru

Between 1985 and 1990 Peru's economic regime was marked by expansionary monetary and fiscal policies and high levels of government intervention in most areas of the economy. Although these policies led to an initial period of growth, the approach proved unsustainable: by late 1987 growth had given way to hyperinflation and deep recession. During 1988-90 real GDP dropped by an average of 8 percent a year. Real wages and consumption expenditure also fell sharply as inflation soared to 7,600 percent a year in 1990.

In 1990 the new government of President Alberto Fujimori introduced macroeconomic reform measures designed to stabilize the economy, reduce fiscal deficits and inflation, increase market efficiency, and improve the country's competitiveness. Under this reform program inflation declined dramatically, falling to 57 percent in 1992 and to 17 percent in 1994. Real GDP grew by about 20 percent between 1991 and 1994, while real per capita consumption expenditure grew by more than 18.5 percent. LSMS data show that poverty declined by 11 percent-from 55 percent of the population in 1991 to 49 percent in 1994. Although the country experienced a brief contractionary period following the introduction of reform measures, household data from Lima for 1990, 1991, and 1994 indicate that in 1994 per capita expenditure was well above, and the incidence of poverty well below, 1990 levels.

Improvements in living standards have been widespread, and the largest gains have been made in some of the country's poorest regions, such as the urban and rural sierra (mountain areas). In most parts of the country, increases in per capita expenditure among households headed by women have been above the national average. In the urban and rural sierra, for example. consumption expenditure by these households increased by 47.7 and 44.8 percent. respectively-figures that compare favorably with increases in per capita expenditure among households headed by men (35 and 28 percent for the same regions).

Although both women and men are expected to gain from economic reform in the long run. gender inequalities at the household and market levels can mean that the benefits of reform reach women, especially poor women. only slowly. Reforms must incorporate measures aimed at counter acting shot-term transitional costs. Among the most important are safety nets specifically targeted to vulnerable groups. For example, in fiscal 1994 seventeen of the twenty-three reform programs supported by the World Bank included components aimed specifically at reducing poverty: fourteen of them targeted programs or safety net measures such as labor-intensive public works projects. targeted and social assistance programs, and unemployment and social security schemes (see box 3.6).

Box 3.6 food coupons improve nutrition in Honduras

The food coupon program in Honduras, part of a social safety net supported by the World Bank and financed by IDA and other donors, was put in place in 1990 to protect the country's most vulnerable people during economic reforms. Starting with about 182,000 participants, by 1994 the program had expanded its coverage to 345.000 of the estimated 430,000 children at risk of malnutrition. The effort also supports nutrition education for health workers, community groups, and mothers. Because coupons are used instead of food. the government saves some 30 percent over traditional food distribution costs, and the beneficiaries are able to choose the food they will consume. Beginning in 1995, an adjustment for inflation will maintain the value of the coupons, enabling participants to satisfy a constant proportion of their food needs.

The project also supports the development and implementation of a long-term nutrition assistance strategy for Honduras. Although attempting to measure changes in malnutrition is difficult in the short term, there have already been noticeable benefits. Between 1990 and 1993 the number of first-graders with severe or moderate malnutrition dropped by 4 percent. Organizers are now trying to graduate women participants from the program by offering training in basic skills such as food processing and helping them find assembly work in local factories (World Bank 1995b).

However, safety nets are not a substitute for a mote integrated approach to economic and social policy that includes appropriate levels of harvest in social services and infrastructure. Recognizing this fact, governments and donors are increasingly incorporating into their reform packages antipoverty initiatives and measures to reduce gender inequality. In Pakistan, for example, the FIDA-financed Public Sector Adjustment. Program provides much needed the financial support for the balance of payments account and reinforces the emphasis on government investment in the social sectors. The program promotes increased access to and improvements in basic education. health. and water supply services that benefit girls and rural areas. It also supports a shift it government education and health spending toward the primary level.

In fiscal 1994 twelve of twenty-three World Bank economic reform pro emphasized the restructuring public expenditure, primarily to and increase spending on education. health care, and other areas important to poverty reduction such as water supply and sanitation. The Burkina Faso reform program is typical; it supports an increase in the total budgeted amounts for primary education and health services, which are particularly beneficial to the poor and to women. Uganda s program seeks to protect and enhance public expenditures for basic social services. including water supply primary health care and primary education. In the long term, the reform of public spending-especially in the social sectors, physical infrastructure and agricultural research and extension-promises significant benefits) trot women.