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A F AIR S HARE OF THE P IE OR P IE IN THE S KY : T HE B UDGET AS AN I NSTRUMENT OF P UBLIC P OLICY TOT on Gender Responsive Budgeting Sponsored by UN Women.

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Presentation on theme: "A F AIR S HARE OF THE P IE OR P IE IN THE S KY : T HE B UDGET AS AN I NSTRUMENT OF P UBLIC P OLICY TOT on Gender Responsive Budgeting Sponsored by UN Women."— Presentation transcript:

1 A F AIR S HARE OF THE P IE OR P IE IN THE S KY : T HE B UDGET AS AN I NSTRUMENT OF P UBLIC P OLICY TOT on Gender Responsive Budgeting Sponsored by UN Women Russian Presidential Academy on the Economy and Public Administration Moscow, June, 2012 Sheila Quinn, Gender Specialist, Ireland

2 A F AIR S HARE OF THE P IE OR P IE IN THE S KY ? A radical concept – to consider that gender equality matters should be considered in the context of the budget Gender equality is considered to be fundamental to human development that there should be no boundaries to finding the way to make it possible This lecture will look at the response to GRB over the last 2 decades to demonstrate that the legitimacy of using the budget as a vehicle for progressing equality has been established. 2

3 T HE KING ’ S PURSE – BUDJET ( MIDDLE E NGLISH ) The King was in his Counting House Counting out his money. The Queen was in the parlour, Eating bread and honey. The maid was in the garden Hanging out the clothes Along came a blackbird And …….. 3

4 W HAT IS THE BUDGET ? A set of document, a set of laws, a plan for getting (revenue) and spending (expenditure) The expression of the government’s fiscal policy Government’s instrument to ‘correct’ the market, to impact on the economy 4

5 W HAT IS THE BUDGET ? Price stability, inflation control, golden rule, economic growth, crowding out, aggregate demand, capital investment, distribution of income Economic aid, children’s allowance, price of shoes, prescription charges, community health services, price of petrol – even the price of a pint. 5

6 W HAT IS THE BUDGET ? The most important policy document A reflection of the government’s priorities Process involving a few – legislators and parliamentarian have limited input – public even less To a large extent separate from policy making 6

7 T HE C OUNTING H OUSE – F ORBIDDEN T ERRAIN Finance – the pinnacle of portfolios Elitism of economics Limited number of decision-makers Certainly not for the social agenda Limited communication with other departments Imbalance between involvement of on independent advisers and non public representatives 7

8 T RADITIONAL V IEW OF THE B UDGET Technical instrument of public finance management – value free, benefits all equally Instrument of control – goal is to get optimum results – guided by concerns for economy and value for money Competing priorities – scarce resources – need to ensure maximum public good 8

9 C ONVENTIONAL M ODEL OF E CONOMY 9

10 A SSUMPTIONS Households do not produce – merely consume Household treated as a unit – no cognizance of bargaining roles within household Role of government is to redistribute income and increase (if G is greater than T: deficit) or reduce (if T is greater than G: surplus) aggregate demand Stock of natural resources, labour & social framework is taken for granted, required no work to maintain these resources Economy is in equilibrium if savings + imports = investments plus exports However, equilibrium does not guarantee full employment, absence of poverty & human development 10

11 I NTRODUCING G ENDER I NTO THE M ODEL Elson examines elements of applying gender disaggregation into the models Proportion of government spend to male/female headed firms Patterns of investment & export behaviour by gender Patterns of income generation by gender Proportion of national income to household by gender Patterns of saving and spending within household by gender Taxes & transfer payments differences by gender Limitations of this approach: No focus of interplay within households and within firms – units Ignores domestic reproductive work + voluntary & community work, ie. the unpaid care economy 11

12 C ARE E CONOMY AS PART OF OUTPUT Elson goes on to argue that it’s possible to incorporate the care economy into macroeconomic thinking by focusing on the circular flow of national output - as a product of the interaction of all three sectors: Private sector commodity market Public service economy Household and community care economy 12

13 I NTERDEPENDENCE IN CREATION OF NATIONAL WEALTH 13

14 F LOW OF I NCOME VS FLOW OUT OUTPUT However, care economy overburdened = negative feedbacks to commodity and public service economies: work days lost, lower productivity due to ill health, higher insurance costs, policing etc Affect level of growth of output This economists understand – recognise the need to invest in care economy either through public services or decent jobs 14

15 Much of investment in care economy is best supplied through public services free at the point of delivery – historically the improvement in production from care economy has come through improvements in public services Public service economy financed by taxes on formal sector commodity economy When taxes do not meet the required investment – budgetary strategies reducing investment in public services Avoid the deficit theory – however deficit can have positive and negative effects – so can be managed One negative of deficit is reduction in public services – but does this have to happen? 15

16 Investment in public sector services can have powerful positive impact on growth and thereby on private sector Externalities: eg education raises productivity of individual but also others with whom that individual interacts (if I’m computer literate others save time by communicating with me via computer) This implies that public expenditure on education should be treated as investment rather than consumption 16

17 A key issue of aggregate budgetary policy is the extent to which a budget deficit is sustainable This is often determined by computer macroeconomic model to project outcomes based on variables Answers will depend on assumptions fed in How increase in monetary supply affect inflation; increased borrowing on interest rates, increased interest rates deter private sector investmen Negative feedback to economy from overburdened care economy not built into such models 17

18 Other factors – less tangible impact sustainability of deficits: Climate of opinion, institutional structures Organisation of financial markets and market sensitivity, organisation of wage negotiations, co- operative or competitive responses to budget, social bargaining Social framework of norms, rules, values – social capital – assumed to be constant 18

19 E CONOMIC THEORY – POLICY MAKING Budget-making essentially a political exercise, based on public best interests & priorities However, economic theorising (based on market interests & priorities) has gained a foothold Autonomous economic man, golden rule, deadweight loss and displacement, deficit=bad, surplus=good 19

20 C HANGES IN E CONOMIC T HINKING Some economists are beginning to pay attention to social capital – impact of rapid deflation and inflation on goodwill and acceptance of social norms which are recognised as necessary for functioning of economies However, they do not connect the maintenance of social capital to women’s unpaid work in the care economy 20

21 M OVEMENT TOWARD REFORM OF BUDGET GOVERNANCE Countries are motivated by considerations of transparency and efficiency The trend away from line item budgeting variations, including activity-based budgeting, programme budgeting, outputs and outcomes budgeting. Broadly the approach involves the incorporation of performance information in the budget process, thus seeking to influence budget decisions. 21

22 M OVEMENT TOWARDS P ERFORMANCE B UDGETING Aim is to allocate more money to activities that produce wanted results and less to those than do not. Idea is that government should budget for actual or expected results – outputs and outcomes, rather than for inputs (personnel, supplies etc. Budget system should link increments in spending to increments in results 22

23 G ENDER R ESPONSIVE B UDGETING AS PART OF THE R EFORM P ROCESS IN A USTRIA Constitutional budgetary principle as of 2013: Outcome orientation including gender budgeting Integrated approach: Gender dimension is considered on all budget management levels such as strategy report (medium term), budget chapters, global budgets etc Does not mean to allocate separate budgets for men & women Implementation of gender mainstreaming in budgeting Requires gender analysis definition of objectives formulation of activities in order to achieve the objectives, and monitoring 23

24 E QUALITY OR E XPEDIENCY Every country, every company in the world is looking for growth wherever they can find it. It’s coming from the emerging markets … We historically think of those emerging markets as India and China and many others. But it is clear that women are an emerging market - DeAnne Aguirre, Snr VP, Booz & Company By increasing women’s participation in the economy and enhancing their efficiency and productivity, we can bring about a dramatic impact on the competitiveness and growth of our economies – Hilary Clinton 24

25 E QUALITY OR E XPEDIENCY “Forget China, India and the internet: economic growth is driven by women.” The Economist 25

26 W OMEN AS C ENTRAL TO P OVERTY R EDUCTION AND DEVELOPMENT Central and developing tenet of development thinking International law points directly to all economic means, including the budget as a method of expediting equality Gender Mainstreaming in place, but without a focus on spending gender mainstreaming is a blunt instrument Without a focus on gender the budget as an instrument of redistribution is a blunt instrument 26

27 GRB AS LIBERATOR Framing gender issues in terms of an economic discourse, gender budgeting 'liberates' gender (and gender mainstreaming) from the 'soft' social issues arena and raises it to the level of macroeconomics, which is often thought of as technical, value-free and gender-neutral. Holvoet, Nathalie, (2006) Gender Budgeting: Its Usefulness in Programme-Based Approaches to Aid, EC Gender Help Desk 27

28 T HE B UDGET AS AN I NSTRUMENT OF G ENDER E QUALITY Scores of budget initiatives all over the world Multilateral and intergovernmental organisations pushing for budget reform Consensus between the two camps Several countries with legal obligation to produce women’s budget statement Several countries legislated for GRB Countries with positive duty to promote equality, including through budget process 28

29 T HE BUDGET AS AN INSTRUMENT TO ADVANCE EQUALITY The Counting House is no longer forbidden terrain 29


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