The Global Economy’s Biggest Untapped Resource

In 2015, world leaders pledged to “achieve gender equality and empower all women and girls” over the subsequent 15 years, as part of the 2030 Agenda for Sustainable Development. And yet, according to an estimate by the World Economic Forum, it will take another 131 years to reach gender parity.

As European Investment Bank President Nadia Calviño, International Monetary Fund Managing Director Kristalina Georgieva, and European Bank for Reconstruction and Development President Odile Renaud-Basso explain, pursuing gender equality is “not just about social justice or correcting current and past wrongs.” Rather, “inclusion is good for business,” with “greater gender balance on bank boards,” for example “associated with greater financial stability and better performance.” It is also good for the planet: “a one-percentage-point increase in female managers at a firm” leads to a “0.5% drop in carbon dioxide emissions.”

But, as the World Bank’s Indermit Gill and Tea Trumbic show, recent progress toward gender equality has been significantly overestimated. For example, women now enjoy “just two-thirds of the legal rights that men do – not 77%, as was previously believed.” And even where legislation has been enacted, say, “mandating equal pay for women for work of equal value,” a lack of supportive policies and enforcement mechanisms limits its impact, resulting in a “colossal waste of human capital.”

We know how to boost women’s economic prospects, points out Rudo Kayombo of BRAC International. In Africa, for example, “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.” But while countries have “the resources, the evidence, and the technical knowledge,” they often lack “the political will to act.”

But there might be another key reason why economic policies are failing to empower women adequately: the underrepresentation of women in the economics profession. And as former Greek Finance Minister Yanis Varoufakis shows, “the field’s dearth of female role models” is only part of the problem. The bigger issue is that the discipline is centered on Homo economicus: a “male chauvinist rational idiot” in whom “no sensible woman” recognizes herself.