When Women Win, the World Wins
Globally, women’s legal rights have improved markedly since 1970, as major reforms have dismantled a wide array of barriers that women face at all stages of their working lives. However, a massive global gender gap remains, and progress in many critical areas appears to have been overestimated.
The Economic Power of Gender Equality
Pursuing diversity and an equal role for women in the economy, in decision-making, and in policy debates is not just about social justice or correcting current and past wrongs. There is ample empirical research demonstrating that it also delivers better results for people, for the planet, and for profits.
LUXEMBOURG – It is hard to find a word that is more relevant to the world’s greatest challenges and policy priorities than “inclusion,” the theme of this year’s International Women’s Day. Inclusive, green economic growth that benefits all of society is an essential component of sustainable prosperity, social cohesion, competitiveness, and geopolitical stability. Supporting a “just transition” that includes all members of our societies is crucial to ensuring that climate action and the digital transformation lead to a more sustainable and secure world.
Gender equality and equal rights are not just a matter of equity; they are also of paramount economic importance. Research from the International Monetary Fund suggests that narrowing the gender gap in labor markets could increase GDP in emerging markets and developing economies by almost 8%. The gains from fully closing the gender gap would be even higher, lifting GDP in those countries by 23% on average.
Simply put, diversity and an equal role for women in the economy, in decision-making, and in policy debates bring better results. Mobilizing all available talent maximizes productivity and competitiveness, which will be crucial for addressing climate change and promoting global prosperity. It is especially important at a time when the combined effects of the climate crisis, the COVID-19 pandemic, and Russia’s invasion of Ukraine threaten to reverse many of the achievements we thought we had secured.
With four billion people around the world voting in elections this year, there is no better time to highlight the large, positive impact that gender equality has on all societies. For example, research by the European Central Bank suggests that a one-percentage-point increase in female managers at a firm leads to a 0.5% drop in carbon dioxide emissions. Similarly, the European Investment Bank has found that firms led by women have higher environmental, social, and governance (ESG) scores. Likewise, IMF research shows that such firms are also more profitable, and that greater gender balance on bank boards is associated with greater financial stability and better performance. These findings suggest that the greatest challenges of our time cannot be addressed without inclusion – throughout organizations and at the top.
There has been clear evidence of progress. More and more women today are starting businesses, despite having less access to financing. World Bank data for 71 countries show that, in 45 of them, women represent an increasing share of “sole owners” of companies.
How might we build on this progress? A study by the European Bank for Reconstruction and Development demonstrates that blended-finance programs can help women entrepreneurs to access more credit and expand their businesses.
Given that women make or influence 80% of consumer-product purchase decisions, firms must take women’s views and experiences into account if they want to sell more of their goods. Women also tend to be more environmentally conscious, which helps to explain the growing customer demand for green financial services. Globally, one in three consumers reports that she would pay a premium of as much as 25% for sustainable financial services.
This points to yet another reason that inclusion is good for business: research shows that more women on corporate boards correlates positively with the disclosure of CO2 emissions. Women now control 40% of global wealth, and they want to invest in a sustainable future. Some 74% of women report being interested in increasing the share of ESG investments in their current investment portfolios, compared to 53% of men. Firms that fail to make room for women overlook an opportunity to outperform their competitors.
Over many centuries, women have developed strategies for dealing with unequal situations, and this has made us especially valuable to organizations that want to change the world. Owing to our historical experience of exclusion and inequality, we are more likely to recognize the need for change and to consider the impact of a company’s operations or policy decisions on others. By the same token, countries with higher female representation in parliament are more likely to ratify environmental treaties and adopt policies that address climate change.
Women’s talent is a driving force behind economic progress and an essential part of the solution to climate change. Women already lead some of the world’s most influential financial bodies and play a growing role in the political arena. Now women must lead the shift to a more inclusive and sustainable growth model. We have a unique opportunity to advance inclusion, to inspire similar commitments from others, and to shape the future for the better.
The Big Push African Women Need to Escape Poverty
Research and experience have shown the effectiveness of providing women and girls living in extreme poverty with a productive asset, support to meet their basic needs, and long-term coaching and training. With a multifaceted approach, African policymakers can boost human capital and improve gender equality.
NAIROBI – What do poverty, climate change, and conflict have in common? They are among the biggest challenges confronting Africa, and they all disproportionately affect women living in poverty or on the margins of society. Both research and experience have demonstrated that these women have enormous potential to improve the well-being of their families and communities.
African countries seeking to drive sustainable development – and address the triple challenge of poverty, climate change, and conflict – must help women in poverty realize their potential. By investing in and scaling up evidence-backed interventions that increase women’s control over income, ownership of productive assets, and decision-making in the household, policymakers can boost human capital, improve gender equality, and expand inclusive economic opportunities.
One approach that has been working in several countries is to provide people living in extreme poverty with a productive asset (such as cows, goats, or supplies for small-scale trade like a sewing machine), support to meet their basic needs, and intensive coaching for a roughly two-year period. Often referred to as the Graduation approach, this set of interventions was developed by the Bangladesh-based NGO BRAC (of which I am Regional Director of Africa for its international arm) to give people the multifaceted “big push” they need to escape poverty and build long-term resilience.
Women, in particular, have benefited greatly from the Graduation approach. For starters, there is rigorous evidence that it can increase women’s productivity. In Sub-Saharan Africa and South Asia, Graduation interventions contributed to an increase in women’s off-farm enterprise employment and, thus, the labor supply. In Bangladesh, they significantly increased earnings from women-led income-generating activities. Research has also demonstrated that enabling women in extreme poverty to build sustainable livelihoods can encourage positive behavior changes that help households prepare for and cope with temporary shocks.
Moreover, a multifaceted approach that includes gender-sensitive coaching, life-skills training, and community engagement can help women in poverty overcome the psychological and social challenges stemming from gender-based discrimination, social exclusion, and limited education. For example, women who received psychosocial support through the Sahel Adaptive Social Protection Program reported improvements in psychological well-being and social cohesion, as well as a reduction in domestic violence. And after a Graduation pilot in Kenya provided women in poverty with mentorship and training (and engaged with male community members to assuage concerns about shifting gender roles), women’s empowerment – as measured by confidence, leadership, and local-committee membership – increased significantly.
Such progress in social and economic empowerment has had positive spillover effects. In Kenya, the two-year Rural Entrepreneur Access Program (REAP) – which provided training, mentorship, and asset grants to small groups of women to start businesses – yielded substantial economic benefits for both participants and their non-enrolled neighbors. This is partly because REAP increased the value participants placed on economic advancement, which they passed along to other women in their communities.
Recognizing the importance of a big-push approach, several African governments, including Kenya, Rwanda, and South Africa, are exploring Graduation-style programs and how to incorporate them into existing systems. For example, the government of Rwanda launched a national Graduation strategy in 2022 to empower people in more than 900,000 households in poverty to develop sustainable, long-term livelihoods, as part of a broader strategy to eradicate extreme poverty by 2030.
Another evidence-backed BRAC initiative that shows promise at scale is the Empowerment and Livelihood for Adolescents (ELA) model, whereby young women and adolescent girls work with “near peer” mentors who provide training sessions on life skills including reproductive and sexual health, as well as financial literacy and entrepreneurship. In Uganda, adolescent girls in communities with ELA programs were more likely to earn a livelihood, while their rates of teen pregnancy and early marriage fell sharply. This community-based model has already reached more than 200,000 participants across Liberia, Sierra Leone, South Sudan, Tanzania, and Uganda, and it is continuing to expand.
Building on these proven approaches, BRAC, in partnership with the Mastercard Foundation, has devised Accelerating Impact for Young Women. This five-year program aims to equip adolescent girls and young women with age-appropriate entrepreneurship, employability, and life-skills training, as well as the tools they need to start and scale up their own businesses. In 2023 – the first year of implementation – more than 70,000 participants enrolled in the program in Liberia, Sierra Leone, Tanzania, and Uganda, and more than 630 savings groups were formed. Participants have collectively saved $140,000, and nearly 20,000 of them have received support to start their own livelihoods.
The evidence is clear: investing in marginalized women and girls can lead to transformative change. By embracing proven approaches, African countries can improve their economic future and help build a better, more equitable world. They already have the resources, the evidence, and the technical knowledge. All that is needed now is the political will to act.
Economics Is Irredeemably Sexist
One reason women avoid the field of economics is the male chauvinist pig standing at its center, masquerading as the model of rationality. No sensible woman recognizes herself in Homo economicus, who always gets what he likes and likes what he gets.
ATHENS – Economics has an intractable “women problem.” High-school girls avoid it. Female undergraduates abandon it. And the problem runs deeper than the difficulty of attracting enough women to mathematics, science, and engineering. Even women who have reached the discipline’s summit, like Christine Lagarde, president of the European Central Bank, consider economists “a tribal clique” and their models defective.
One reason women detest the field is the male chauvinist pig standing in the middle of it, masquerading as the avatar of economic rationality. Economic models of anything from the demand for potatoes to the effects of the interest rate on inflation and investment are founded on the assumption of Homo economicus: a fictional, Robinson Crusoe-like, hyper-rational fool who always gets what he likes and likes what he gets (among all feasible alternatives).
No sensible woman looks at this model and recognizes herself in the depiction of the rational person as an algorithmic bot, ever ready to burn down the planet for the slightest private net gain, permanently incapable of doing what is right (just because it is right). Thoughtful men are also deterred by Homo economicus, leaving only the more brutish to adopt “him” as the archetype of rational behavior.
The discipline’s approach to the question of justice is similarly repulsive to women. To seem objective and impartial when Jill is demanding a change that will make Jack worse off, economists adopted the advice of the Mussolini-sympathizing Italian economist Vilfredo Pareto: “scientific” economics must recommend only policies that make at least one person better off without leaving anyone worse off. In a patriarchal world, where most assets are in men’s hands, so-called Pareto efficiency constitutes a staunch defense of the sexist status quo.
That’s not all. Consider four people or groups (A, B, C, D) and three possible collective decisions (X, Y, Z) that affect them all. For example, suppose the four (A, B, C, D) are friends who, a week ago, agreed that tonight they will go to the theatre (X), rather than to the cinema (Y) or to a restaurant (Z). Say that their preferences are as follows:
– A prefers the cinema to the theatre and the theatre to the restaurant (A: Y>X>Z)
– B prefers a nice dinner to the cinema and the cinema to the theatre (B: Z>Y>X)
– C is indifferent between the theatre and the cinema but prefers either to the restaurant (C: X=Y>Z)
– D would love to go to dinner but, otherwise, prefers the cinema to the theatre (D: Z>Y>X).
The question is: Should they change their minds and, rather than the theater (as originally planned), go to the cinema or perhaps to dinner? Economics has a clear answer. If they switch from the theatre (X) to the restaurant (Z), two of them (A & C) will be worse off, thus violating the Pareto criterion. But if they switch from the theatre (X) to the cinema (Y), no one will be upset and three of them (A, B, and D) will be better off. Thus, economists would conclude that the rational and just decision is to drop the theatre in favor of the cinema.
This seems logical. But a closer look exposes the callousness of the whole approach. Note that the recommendation to switch from the theater (X) to the cinema (Y) was motivated solely by their preference rankings. Neither who these people (A, B, C, D) are, nor the reasons behind their preferences (X, Y, Z), played any role in the verdict. To see why this is scandalous, consider a drastically different story yielding precisely the same preference rankings.
A sadistic warlord (A) has led his gang to a village where they round up the inhabitants (D) with a view to killing them (outcome X). At that moment, you (B) are trekking in the area and stumble across the village to witness the horrific scene. Meanwhile, a film crew (C) is hidden in the bushes recording everything. The warlord welcomes you with open, menacing arms and makes you an offer: “If you take my gun and kill one of the villagers, at random, I shall spare the rest (outcome Y). If you don’t, I will kill them all (outcome X).”
It is highly plausible that the preferences of the four participants (A, B, C, D) over outcomes X, Y, Z are exactly as in the case of the four friends planning a night out: The warlord (A) is eager to make you his accomplice (he prefers outcome Y to X) while never entertaining the possibility of outcome Z (no one dies). The peasants (D) are begging you to do as the warlord says (to help bring about Y over X). The film crew’s members (C) don’t care what happens as long as there is at least one murder to record (X or Y).
So, what should you do if you place at the bottom of your rankings the outcome that no villager lives? (B: Z>Y>X) This is the definition of a hard choice: a clash between your ethical objection to killing an innocent and your urge to save lives.
Not so for economists, who consider it an easy decision. Structurally unable to differentiate this cruel choice from four friends debating how to spend a night out, economics instructs you to take the warlord’s gun and kill a villager (to switch from X to Y, regardless of whether Y is a cinema or a murder).
No room is left to acknowledge that some choices are wrong, whatever the decision-making calculus, and are irreducible to preference satisfaction. Is it any wonder that women, who in patriarchal societies are more in tune with context and unquantifiable reasons for action, disdain economics?
It is not just economists’ physics envy, the field’s dearth of female role models, or seminars dominated by testosterone-fueled bullies that deter women from the field. To become the “queen of the social sciences,” economics placed at the center of its models and method a male chauvinist rational idiot. Given that asking economists to drop the model that brought them enormous influence is like asking a tribe to denounce the fake creed that made it dominant, why should women want to enter a field whose philosophical sexism effectively sets them up to be the random villager?
WASHINGTON, DC – In May 1988, Alejandra Arévalo became the first female geologist to enter an underground mine in Chile. In doing so, she defied a popular myth: that a woman brings bad luck by venturing into a mine. She also broke the law. At the time, Chilean women were forbidden to work in underground mining or in any other job that “exceeded their strength or put at risk their physical or moral condition.” Arévalo’s defiance helped spark a revolution. By 1993, the restrictions on women in mining had been abolished; and by 2022, women represented 15% of the Chilean mining workforce, a threefold increase since 2007.
Equally substantial progress has occurred worldwide over the past half-century. Globally, women’s legal rights have improved by about two-thirds, on average, since 1970. Major reforms have dismantled a wide array of barriers that women face at all stages of their working lives, but especially in the workplace and in parenthood. Yet as the world marks this year’s International Women’s Day, it is clear that there is still a huge global gender gap.
In fact, the latest data show that the gap is much wider than previously thought. When legal differences regarding protections against violence and access to childcare are considered, women enjoy just two-thirds of the legal rights that men do – not 77%, as was previously believed. The World Bank’s latest Women, Business and the Law report finds that no country – not even the wealthiest ones – grants women the same legal rights as men.
The greatest deficiency involves safety: women enjoy barely one-third of the necessary legal protections against domestic violence, sexual harassment, and femicide. Inadequate access to childcare services is another hindrance. Only 62 economies – fewer than one-third of the world’s countries – have established quality standards governing childcare services. As a result, women across 128 economies may have to think twice about going to work while they have children in their care.
Moreover, the gender gap is wider than laws on the books might suggest. For the first time, Women, Business and the Law compared progress in legal reforms with actual outcomes for women in 190 economies, finding a surprising delay in implementation. Although laws on the books imply that women enjoy roughly two-thirds the rights of men, countries on average have established less than 40% of the systems needed for full implementation.
For example, 98 economies have enacted legislation mandating equal pay for women for work of equal value; but only 35 economies – fewer than one out of every five – have adopted pay-transparency measures or enforcement mechanisms to address the pay gap. That represents a colossal waste of human capital, and at precisely the moment when the world needs to marshal all its resources to escape the rising risk of economic stagnation. Today, fewer than one out of every two women participate in the labor force. By contrast, roughly three out of every four men do.
Closing that gap could help double global economic growth in the coming decade. The evidence is clear: economies with higher Women, Business and the Law scores tend to have larger female labor-force participation rates, stronger female entrepreneurship, and more active female participation in political institutions. Gender equality, in short, is both a fundamental human right and a powerful engine of economic development.
Again, it is not enough merely to pursue equality in the laws on the books. What we need are comprehensive sets of policies and institutions – as well as a transformation of cultural and social norms in many countries – to empower women to become successful workers, entrepreneurs, and leaders. That means stronger enforcement mechanisms to tackle workplace violence, practical provisions for childcare services, and easier access to health-care services for women who survive violence.
Such policies enable women to remain employed without suffering career setbacks, help close the gender wage gap, and reconfigure gender roles and attitudes related to workplace and household duties. And as more women rise to leadership positions, they inspire new generations of girls to achieve their full potential.
Positive outcomes take time to realize, but they do happen. As Claudia Goldin, the winner of the 2023 Nobel Prize in Economics, has observed, the 1960s surge in US women rising to high-level jobs did not happen by accident. It was the product of a slow but steady accretion of legal rights.
“Even if the laws didn’t change women’s earnings, it made their lives better and expanded their options,” Goldin noted. “Workplaces became safer for them. They were no longer barred or excused from juries because of their presumed household responsibilities. They could not be fired when pregnant and could not be refused a job because they had children. They received better education and more resources, even as girls.”
Leveling the playing field presents crucial economic opportunities, and not just for women. When half of humanity wins, the whole world wins.