Structural Adjustment Programs and Gender

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Introduction

Assessment of structural adjustment programs (SAPs) that were introduced by the World Bank and the IMF is an incredibly challenging assignment, particularly from the gender viewpoint. One of the challenges comes from the truth that from the start the SAPs were not targeting gender explicitly; rather they were targeting specific economic variables and only unreservedly assumed that economic reforms, freeing economies from the control of the government, will result in growth which will be beneficial to all. Thus, in principle, the impact of SAPs needs to be assessed from the viewpoint of macroeconomic impact, and thereafter its transmission onto gender.

This essay attempts to critically evaluate the economic impact of SAPs on gender in developing countries specifically on women. The essay will define what SAPs are, their economic impact on the countries which implemented them, and their economic aftermaths on women. The paper will also examine the WID and GAD plans on improving the economic status of women finally the paper will give a conclusion basing on the findings reached.

The Structural Adjustment Programs (SAPs)

The Structural Adjustment Programs (SAPs) were initially developed by the World Bank (WB) and the International Monetary Fund (IMF) in the late 1980s. The main objective of the SAPs was to help those member countries going through economic difficulties.

Essentially, the SAPs are a financial loan provided to member states of the WB and IMF who were experiencing economic difficulties. The key objective is to push the state’s economy onto the path of economic development, though with effectiveness and stability Hansen (1991) refers to SAPs as the sustained search of a program of the policy of reforms which is designed to lessen economic and financial inequalities created by domestic or external shocks and to tackle policy deficiencies that are hampering progress towards accelerated economic development.

To be given these loans a country is obligated to satisfy particular conditions which are set up by the WB and the IMF. These conditions have in general been underlined by neo-classical economic assumptions and reasoning (Elson, 1995). The neo-classical SAPs are thus founded on the assumption that the market is a better mechanism for organizing and allocating resources than the state. Therefore, the state should have a reduced role and rather than acting as a resource manager should be a market facilitator, assuring that market regulation are adhered to. Once the market is free from state intervention and fully functioning, it is assumed that individuals will act for their benefit and will respond rationally to market signals. On the macro level, this will result in the country’s economic prosperity.

To achieve the ultimate goal of the programs, the constituent policies are aimed at

reducing domestic demand
reducing public expenditure (reducing the state role),
promoting export.

Typically, these policies will comprise one or more of the following measures: Changes to exchange rate regimes, a high-interest rate policy, credit squeeze, reduction in the government budget, increase in government revenue, market liberalization, and social safety net programs. It should be clarified that these measures are typical examples and countries do not adopt all of them at once.

The criticisms of the SAPs

In many respects, the outcomes of the SAPs in various developing countries have been inconclusive (Collier, 1994) Ahmed and Lipton (1997) pointed out that there does not seem to have been any systemic forecast of the SAPs’ outcomes. In various studies, it is evident that, contrary to general claims, many countries did not derive very positive macro-economic outcomes. Brazil, Zambia, and Argentina’s economic growth rates, for example, have declined following the program implementations, while the inflation rates remained high (Pastor, 1987). The WB’s evaluation of the SAPs during 1980-7 also revealed that although the programs improved the Balance of Payment positions of all countries, there was no significant improvement in the Gross Domestic Product (GDP) growth rate (Pastor, 1987). Though, it should be noted that in Zambia, for example, the programs were not completed

It is evident that the ultimate objective of the SAPs, including economic growth, has been achieved in selected countries. These ‘success’ countries such as Bolivia in Latin America, Ghana in Africa (Pastor, 1987), and Thailand in South East Asia (Warr, 1996) were all once used by the IMF as showcase examples of the success of the SAPs. Thailand’s economic performance in the 1990s, in particular, was claimed to be an “economic miracle” (ibid, 1996).

It was claimed by the WB that the impressive economic growth rate, together with other macro-economic figures that were achieved in the 1980s and early 1990s was due to the SAPs (1982). Talk of the success of the adjustment programs continued up until 1996, one year before the crisis. However, the collapse of the Thai and many Asian economies in 1997, after a long period of economic prosperity, raised questions concerning the sustainability of the economic changes bought about by the first SAPs.

Regardless of how the SAPs are implemented, they have invariably been associated with worsening welfare standards (Cornia, et al, 1989, Toye, 1995). The IMF and the WB are often criticized for over-emphasizing macroeconomic growth and under-prioritizing the welfare of the people. Much empirical evidence suggests that the costs of the SAPs were not equally distributed and vulnerable people suffered a disproportionately negative impact (Elson, 1995; Gladwin, 1991). This unequal burden, borne by vulnerable groups, is claimed to stem from unequal access to resources and an imperfect market.

Apart from the uneven distribution of costs to different groups in society, it is also evident that, where the benefits of the SAPs have been observed, the “trickle down effect” did not function effectively. The benefits of the SAPs have not been fairly distributed domestically. Elson, D. (1995) claimed that market liberalization appears to favor foreign rather than home investors, as they have better knowledge of the market and productions. It is also evident that people do not gain uniformly from the SAPs. This may be explained by the fact that the market in developing countries is not fully functioning. Moreover, even when the market signals are clear, people may be constrained by other obligations and unable to respond beneficially.

Gender and the Economic Structural Adjustment Programs (SAPs); welfare, efficiency & equity and empowerment approaches

The feminist criticisms of the SAPs can be broadly separated into three standpoints chronologically developed on the foundations of welfare, efficiency & equity, and empowerment. Whilst the welfare approach places emphasis on the uneven distribution of the costs of the SAPs, the efficiency approach focuses on the programs’ inefficiency in getting people, and particularly women, to participate in the productive market thus creating economic growth. Lastly, the empowerment approach criticizes the gender bias of the macroeconomic policies, including biases of policy planners, assumptions, the imperfect market, and the existing gender bias at the household level. This subsection will discuss all three approaches in turn.

Welfare approach

In the 1980s, studies on the impact of the SAPs on women put concern on the deteriorating welfare of women and children (Baden, 1996). As earlier mentioned, many studies have found a negative correlation between the SAPs and people’s welfare. UNICEF (1989) and the Commonwealth Secretariat (1989; 1991) argued that vulnerable groups, including women and children, are more susceptible to deterioration in welfare and living conditions.

The health and education conditions of women and girls, in particular, are put at risk following the economic crisis and during subsequent constrictions in government expenditure under the SAPs. Both organizations criticized the failure of the trickle-down effect, which resulted in an unequal distribution of impacts. The Commonwealth Secretariat (1991) suggested two main factors as contributing to the gender-unequal burden of the programs, which were unequal access to and control over resources and the existing gender division of labor (Moser, 1993).

Afshar and Dennis, (1992) argued that men and women within society do not have equal access to and control over resources. This, to a great degree, appears to be related to existing gender roles and gender ideology. Women, in general, tend to have lower access to and probably no absolute control over resources, as they are mostly concentrated in the reproductive sphere. For women, access to state and market resources can be gained through the handout of public service provisions or income transfer from their male counterparts. These two factors can be considered as reinforcing each other, though one may argue that women have a certain degree of control over reproductive resources.

This gender division of labor and unequal access to resources has been linked to the SAPs. Afshar and Dennis, (1992) argued that women are more vulnerable to changes in economic conditions because, under the tight fiscal policies, cuts in the government budget and an increase in indirect tax (VAT) directly affects the resource levels for women while their responsibilities and role of household welfare provider have not changed.

It is further argued that very often women sacrifice their needs when there is a shortage of resources so that the level of welfare of other household members can be maintained. A heavier burden for women during crises may mean increased working hours outside and within the household. Also, with specified gender roles, girls are often withdrawn from school to take over their mother’s household chores (Afshar and Dennis, 1992)

In short, this approach criticizes the policy planners and the SAPs as being gender blind and not seeing men and women as different agents. The neo-classical assumptions, which are gender-neutral and imply no gender roles and equal access to resources, are therefore argued to be unfounded (Sparr,1994). Existing gender division of labor and unequal access to resources, as the welfare approach argues, are the main causes of the disproportionate distribution of the costs of adjustment programs. Afshar and Dennis, (1992) and the Commonwealth Secretariat believe that the welfare of women and children should be protected in their plea for the policy planners and multinational monetary institutions responsible for the SAPs to create an alternative structural adjustment program, which materialized in 1999.

Efficiency & equity approach

The criticisms made by UNICEF and the Commonwealth Secretariat have gained much attention from academics, scholars, and policy planners. Many ground-level investigations have been carried out within various geographical areas, including Latin America, Africa, and the Caribbean (Gladwin, 1991), which have tried to unravel the far more complex pathway by which the impact of SAPs has been distributed on the ground. Unlike the welfare approach, the efficiency approach did not see Sap’s impact as all bad. The possible positive effects include new job opportunities, created under new outward-looking and export-oriented strategies, which may help to improve the status of women through providing independent income (Gladwin, 1991)

This increase in income is argued to enhance the autonomy of women, which subsequently heightens intra-household bargaining power. However, many authors have shown that women’s independent income cannot simply be equated with higher autonomy (Blumberg, 1991). This is because the ability of women to utilize independent income may be restrained by the additional responsibilities of providing or increasing household welfare.

Under the efficiency & equity approach, women are seen as active economic agents, who are responsive to changes in economic signals and conditions. Instead of being viewed as victims of change, women are seen as being fuel for the economic development engine. For instance, Gladwin (1991) argued that the economic miracle in Thailand was built on the back of women, as the sources of income are concentrated in tourism, service, and manufacturing industries where Thai women are mostly concentrated. It is further argued that women and their relations to men determine, to a great degree, the success of the SAPs

Collier (1993) has argued that the non-responsiveness of women to the changes in market signals is owing to price distortions arising from the differences between women and men, including the existing gender ideology of work, reflected in the existing gender division of labor. He claimed that the gender division of labor is reinforced and reproduced by the socialization or role copying between different generations, gender bias and specific gender preferences in the labor market, asymmetric rights and obligations within the household (reproductive tax), and other traditional practices.

Empowerment approach

The main argument of the empowerment approach is that the economic crisis and the SAPs have impacted gender and that gender has a contributing effect on the success of the adjustment programs. Under this approach, women are viewed in a relatively more dynamic fashion than the previous two. Women are seen as both active producers and passive consumer agents in society. However, it should be noted that consumers can also be ‘active’ through their choice of product purchasing patterns.

Elson (1995) criticized the SAPs for being planned and implemented in a gender-biased fashion. She further contended that gender bias in the SAPs can be found at macro, meso, and micro levels. Male bias at macro levels includes the bias of the policy planners, the policy planned, and the policy in implementation.

As Sparr (1994) claimed, the neo-classical gender-neutral assumptions are hardly true. The economic jargon within the policies such as “efficiency” and “employment” are intrinsically gender-biased (Elson, 1993). For example, an increase in efficiency in health care may hide the fact that the cost of care for patients may be pushed predominately on to women. The calculation of employment in itself can also be considered as ignoring substantial female activity. Full-time domestic work within the female population is usually not accounted for in employment evaluations. Planning based on such statistics could in return be highly misleading. For instance, the low employment participation rate for women means that planners may view female labor as having an elastic availability that can be capitalized upon by the productive sector. However, this is a false assumption.

Women in Development (WID) and Gender and Development (GAD)

The discussion on women’s involvement in development began from a “welfarist” model, in which women were brought into economic and social development basically as “better mothers”. This model recognized women and their requirements simply as recipients of development aid. A turning point was in the 1970s with the conception of the Women in Development (WID) framework which was founded on an economic efficiency basis, WID advocated for the integration of women as driving forces in the development process. Women had to been seen as active partners in development and not exclusively as recipients of development aid.

The WID approach stressed family planning schemes as an “effective, coherent and global strategy on stabilizing population growth” and also freeing women to take over so-named “economically productive” jobs. As Moser (1989) argued, the first proposals aimed at women by global development agencies were “welfarist” in nature:

The reaction was a change from a selective focus on women to the critical scrutiny of gender power relationships, resulting in the Gender and Development (GAD) framework. To GAD, women’s subordination is founded in imbalanced gendered control relations (Moser, 1989) With GAD, being empowered became the “motherhood” phrase in the development process. Women’s empowerment projects have increasingly been implemented as a way to combat poverty and enhance economic development.

As Sparr (1994) argues, WID and GAD are largely formulated within liberal structures, and this makes particular strategies for women’s empowerment possible whereas at the same moment closing off other spaces. In this case, development interventions need to involve women in projects to achieve economic income without a challenge to the social, cultural policy environment in which these projects run (Sparr, 1994). From these points, it is thus clear that SAPs can not bring much-needed economic growth and improve the lives of the whole citizens of a country if they do not incorporate women in their development projects.

Conclusion

It has been argued throughout this study paper that SAPs which were established by the global monetary institutions i.e. the WB and IMF did little to achieve the economic development that they were meant to kick start in poor countries or developing ones. Instead, the SAPs lead to the poverty level in many of these countries to increase. This was mainly as a result of the governments of these countries cutting down on the amount they were spending on social facilities such as education and health. In addition, the exclusion of women in the development agenda taken by SAPs programs meant that a major fraction of the population segment (women) was not involved in these programs which meant that the programs were biased.

These, in turn, harmed women and society as a whole. To correct such imbalance, the WID and GAD approach has to be used which calls for women to be integrated into economic projects and those women should be seen as partners and not just mere receipts of economic aid. Thus for any meaningful comprehensive economic development to occur it is clear both men and women have to be incorporated.

Reference

Afshar, H. and Dennis, C. (eds.) (1992): Women and adjustment policies in the Third World. York: Macmillan Press Ltd.

Bello, W., Cunningham, S., and Li Kheng, P. (1998): Siamese tragedy: development and disintegration in modern Thailand. London: Zed Books.

Blumberg, R. (1991): Income under female versus male control: hypotheses from a theory of gender stratification and data from the third world. In Blumberg, R. (ed.). Gender, family, and economy. California: Sage.

Collier, P. (1994): “Market gender discrimination”. In Meier, G.M. Leading issues in economic development. New York and Oxford: Oxford University Press.

Elson, D. (1995): Gender awareness in modeling structural adjustment In World Development Journal Vol. 23. No. 11 Elsevier Science Direct.

Gladwin, C.H. (ed) (1991): Structural adjustment and African women farmers. Florida: University of Florida Press.

IMF (1997). The economic structural adjustment facilities at 10 years: economic adjustment and reform in low-income country. Washington D.C.: IMF.

Joekes, S. (1987): Women in the world economy. An INSTRAW study. New York: Oxford University Press.

Lipton, M. and Ahmed, I.I. (1997). Impact of structural adjustment programs on sustainable rural livelihoods: a review of literature. Sussex: IDS.

Moser, C.O.N. (1989); “Gender planning in the Third World: meeting practical and strategic gender needs”. World Development Vol 17 No. 11. Pergamon.

Pastor, M. (1987): The effects of the IMF programs in the third world: debate and evidence from Latin America. World Development Vol. 15 no. 7.

Sparr, P. (ed.) (1994): Mortgaging women’s lives: feminist critiques of structural adjustment. London: Zed Books.

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