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Are female politicians better at managing economic policies?

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On average, only 19.3% of parliamentarians worldwide are women but this is changing and the increasing participation of women in politics is one of the most significant global political phenomena of recent times. A number of countries have introduced quotas for women in government in since the early 1990s, contributing to secular growth in the share of women in government (Pande and Ford 2012, Besley et al. 2013).

This is therefore an important time to consider the substantive impacts of widening participation. A recent literature suggests that women have different policy preferences from men, for instance, public health and education improve under women’s leadership (Miller 2008, Clots-Figueras 2012, Bhalotra and Clots-Figueras 2014), and women have stronger preferences for redistribution (Edlund et al. 2005). Emerging from this evidence is the question of whether women politicians are good for economic growth, or whether their emphasis on welfare and universal service provision might come at the cost of growth, at least in the short term.

We know of no causal estimates linking economic performance to women in politics, and recent studies of women on corporate boards are ambiguous about their impacts on firm performance (Gagliadurci and Paserman 2015, Ahern and Dittmar 2012). We investigated this question using electoral data from 4265 constituencies for elections to India’s state assemblies in the period 1990-2012. So as to isolate causal effects from constituency characteristics, we use close elections between men and women, or elections in which the vote margin between the winner and the runner-up is small, as then the identity of the winner may be deemed quasi-random (Lee 2008). Since there are no constituency-level data on income growth, we use night-time luminosity as a proxy for economic performance (Henderson 2012).

We find that women legislators in India raise economic performance in their constituencies over a five-year election term by about 2 percentage points more than male legislators. Given the evidence cited above that human capital (public health and primary education) improves under women leaders, the impact of women on longer run growth is likely to be larger.

Investigating mechanisms by which women deliver growth, we found some evidence that it is both who they are and what they do. As many as a third of male state legislators in India have pending criminal charges against them. The corresponding rate among women legislators is 13%. Given evidence that criminality compromises growth (Prakash et al. 2015), we estimate that this difference can explain a third of the difference in growth between male and female-led constituencies. In line with this, we find that, once in office, women are less likely than men to accumulate rents from office-holding, an index of corruption (Fisman et al. 2015). Together with previous research documenting that corruption hampers growth (Mauro 1995), this also contributes to explaining our finding that women are good for growth.

Since basic infrastructure in developing countries is an important input to economic growth (Jacoby 2000), we analysed legislator performance in relation to a federally funded village-road construction programme. We find that, although male and female politicians are equally likely to negotiate federal subsidies for road building in their constituencies, women are more likely to complete these projects. We interpret this as a sign of efficacy. Since road construction has higher returns for men (Asher and Novosad 2016), this finding also establishes that women politicians are not exclusively focused upon serving the interests of women voters. We also found that legislator gender matters for growth only in non-swing constituencies and we suggest that this may be interpreted as suggesting that women have greater intrinsic motivation (or that there is greater political opportunism among men). 3 Our findings are of direct interest to policymaking in India. State legislators shape policy. They influence the flow of federal funds and the financing of village councils and they manage electricity, roads, law and order, health and education, amongst other things. A proposal to reserve a third of all legislative assembly seats for women was approved by the Lower House but has been pending in the Upper House for some years. Our findings are potentially of wider interest given the scarcity of evidence on the question of how effective women are, compared to men, at managing economic performance.

Research by Thushyanthan Baskaran (University of Siegen), Sonia Bhalotra (University of Essex), Brian Min (University of Michigan), Yogesh Uppal (Youngstown State University)

References

Ahern, K. and A Dittmar 2012 The Changing of the Boards: The Impact on Firm Valuation of Mandated Female Board Representation. The Quarterly Journal of Economics (2012) 127 (1): 137-197.

Asher, S and P Novosad. 2016. Market Access and Structural Transformation: Evidence from Rural Roads in India.

Besley, T. J., O. Folke, T. Persson, and J. Rincke (2013). Gender quotas and the crisis of the mediocre man: Theory and evidence from Sweden. IFN Working Paper No. 985.

Bhalotra, S. and I. Clots-Figueras (2014). Health and political agency of women. American Economic Journal: Economic Policy 6, 164-197. June Clots-Figueras, I. (2012). Are female leaders good for education? Evidence from India. American Economic Journal: Applied Economics 4, 212-244.

Edlund, Lena, Laila Haider and Rohini Pande. 2005. Unmarried Parenthood and Redistributive Politics. The Journal of the European Economic Association vol. 3, no. 1 (January), pp. 95-119.

Fisman, Ray, Florian Schulz and Vikrant Vig (2014). Private Returns to Public Office. Journal of Political Economy. 122(4), pp. 806–862

Gagliadurci, S and D. Paserman 2015 The Effect of Female Leadership on Establishment and Employee Outcomes: Evidence from Linked Employer-Employee Data, Research in Labor Economics, 41, 341-372

Henderson, J. V., A. Storeygard, and D. N. Weil (2012). Measuring economic growth from outer space. American Economic Review 102(2), 994-1028.

Jacoby, Hanan G, Access to Markets and the Benefits of Rural Roads,” The Economic Journal, 2000, 110 (465), 713-737.

Mauro, P. (1995). Corruption and growth. Quarterly Journal of Economics 110 (3), 681-712.

Miller, G. (2007). Women’s suffrage, political responsiveness, and child survival in American history. Quarterly Journal of Economics 123, 1287-1327.

Pande, Rohini and Deanna Ford. 2012. “Gender Quotas and Female Leadership: A Review,” Background paper for the World Development Report on Gender.

Prakash, N., M. Rockmore, and Y. Uppal (2014). Do criminally accused politicians affect economic outcomes? Mimeo (University of Connecticut).