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Conference on Gender Responsive Budgeting

Date: 17 Oct 2001

Mr Winston Cox on Gender Responsive Budgeting, UNIFEM-OECD-Nordic Council Conference. Brussels, Commonwealth Deputy Secretary-General, 16-17 October 2001

BACKGROUND

The involvement of Commonwealth countries in gender responsive budgeting is both long and substantial: it began with Australia in 1984 and spread to Canada and South Africa in 1993 and 1994, respectively. The Commonwealth Secretariat's programme began in 1995 and since then nearly half of the forty known country initiatives on gender responsive budgeting are in the Commonwealth . The issue has been discussed in depth at the Fifth and Sixth Meetings of Commonwealth Ministers Responsible for Women's Affairs and it was on the agenda of the Commonwealth Finance Ministers Meeting, which like a number of other international meetings, was cancelled following to the tragic events in the USA.

The Commonwealth's involvement in gender responsive budgeting takes its genesis from a number of discreet but interconnected factors:

§ The Commonwealth's commitment to the fundamental principle of equality and non-discrimination creates the need to develop public expenditure tracking systems to measure how consistent national decisions on resource
allocation are with these and the other fundamental principles of the Commonwealth.

§ Reaffirmation of commitment to gender equality by Heads of Government when they endorsed the Ottawa Declaration (on Women and Structural Adjustment) at Harare in 1991 and the 1995 Commonwealth Plan of Action on Gender and Development (and its update, Advancing the Commonwealth Agenda for Gender Equality into the New Millennium (2000-2005) at Durban in 1999.

§ Exploitation of the Commonwealth's demonstrated a comparative advantage in the area of encouraging governments to integrate gender concerns into economic policy dating from the report of the 1989 Commonwealth Expert Group on Women and Structural Adjustment, Engendering Adjustment for the 1990s, a pioneering work that advocated incorporating gender concerns into a broad range of economic policy areas: public expenditure, taxation, credit policies, exchange rate policies, pricing policies, wage policies, trade liberalisation and privatisation .

§ The need to ensure that gender issues form part of the Commonwealth Secretariat's work on 'Integrated Economic and Social Development Policy Management'.

§ Contributing to the achievement of the International Development Targets (IDTs) in general and in particular those targets dealing with poverty reduction, primary and secondary education, and infant and maternal
mortality.

THE COMMONWEALTH PROGRAMME

The Commonwealth Secretariat has contributed to the development of this programme area through the development of analytical tools and frameworks, international advocacy and the building strategic partnerships.

The Development of Analytical Tools and Frameworks

From the outset, one of our aims was to create a set of analytical tools for budgetary expenditure analysis that could be used by different governments. Through the commissioned work of Diane Elson, six broad categories of
expenditure tools were developed:

(i) gender-aware policy appraisal,
(ii) beneficiary assessments,
(iii) public expenditure incidence analysis,
(iv) gender-disaggregated analysis of the budget on time use,
(v) gender-aware
medium-term economic policy framework, and
(vi) gender responsive budget
statement.

The Commonwealth Secretariat, in collaboration with AusAID, also commissioned Debbie Budlender and Rhonda Sharp to develop a training manual to apply these tools at the country level. The manual is based on a three-way categorisation of expenditure, which distinguishes between:
(a) gender-targeted expenditure;
(b) equal opportunity expenditure for civil servants; and
(c) mainstream expenditure (the rest) considered in terms of its gender impact.

Along with the new programme partners, the development of revenue tools is an important next step in order to determine the possible gender impacts of revenue-raising measures, as well as to complement work done on expenditure impacts.

International Advocacy

The Commonwealth Secretariat programme on gender responsive budgeting emerged out of the 1995 Commonwealth Plan of Action on Gender and Development, the Commonwealth's contribution to the Beijing Conference and Platform for Action. In 1996, at the Fifth Meeting of Commonwealth Ministers Responsible
for Women's Affairs, gender responsive budgeting was for the first time included on the agenda of an intergovernmental meeting. At that meeting Ministers endorsed the use of the expenditure tools and recommended that the Commonwealth Secretariat assist governments to implement gender responsive
budgets.

At their Sixth Meeting held in New Delhi in April 2000, Ministers Responsible for Women's Affairs requested that Finance Ministers endorse the integration of a gender analysis into the national budget. Commonwealth Finance Ministers at their meeting held in Malta in 2000, 'reaffirmed the importance of the Commonwealth Secretariat's programme on gender equality'. They also welcomed the Commonwealth Gender Responsive Budget Initiative and 'looked forward to the review of the pilot stage of the project.'

Beyond the confines of the Commonwealth, the Secretariat has sought to raise awareness of the value of gender responsive budgeting including at the UN General Assembly Special Session on Beijing+5, at other major
meetings organised by the OECD, Nordic Council of Ministers, and UNDP, and also on a regional basis with the ADB and the Pacific Islands Forum.

Building Strategic Partnerships

We consider our new programme partnership with the International Development Research Centre (IDRC) and the United Nations Development Fund for Women (UNIFEM), which emerged out of a meeting at the Commonwealth Secretariat in April 2000, as crucial to responding to the emerging demands of the programme and the diverse support required at the country level. Our new partners bring unique, complementary and

critical resources to the initiative: UNIFEM works towards enhancing the role, capacity and participation of women at all levels: national, regional and international, whereas IDRC seeks to help developing countries find
solutions to social and economic problems through research, recognising that equitable and sustainable development requires an understanding of the differential impact of policies on women and men.

LESSONS LEARNED

Our involvement in gender responsive budgeting have taught us three critical lessons and have allowed us to identify a number of benefits. The lessons learned are: the importance of country ownership; the importance of collaboration between government and civil society; and the need for work on revenue and tax systems. While the specific economic impacts of this relatively new global initiative are still difficult to determine, there have been
a number of positive benefits that could be highlighted: an enhanced ability to determine the real value of resources targeted towards gender-specific groups; a challenge to the notion that many policies and programmes are gender neutral; and the strengthening of the collection and analysis of gender-disaggregated data.

The Need For Country Ownership

Government commitment and leadership, and broad country ownership are critical for effective formulation and implementation of gender responsive budget initiatives. There is no universal blue print or pre-determined
process on how to successfully implement an initiative. Each one must evolve from the local circumstances that generate the development priorities of the countries, determine the capacity of different stakeholders (governments, civil society organisations, NGOs, women's groups, research institutes), and that determine the resource constraints, which include budgetary constraints, human resources and technical skills.

The Need For Government and Civil Society Collaboration

Once the initiative is locally owned, the best condition for sustaining a gender responsive budget initiative is a process of dialogue and complementarity between government and civil society activities. This would ensure that
a synergy occurs between the aims, expertise and capabilities of each group. Based on Commonwealth experiences, civil society agencies have a vital role to play in gender responsive budgeting, especially in research
on the impact of public spending, advocacy for policy changes and improved accountability, and in the delivery of services. The Commonwealth Secretariat articulates a principal role for governments in this programme, based
on two key factors:

§ Governments have central responsibility for implementing initiatives to promote gender equality. This responsibility is based on their roles as the representatives of the democratic will of the people, the principal
architects of development strategies, and as the signatories to the global declarations, both Commonwealth and UN, on gender equality.

§ National budgets are exclusively the responsibility of governments. Despite the value of wide consultations with civil society in formulating the budget it is the executive and legislative branches of government that ultimately must decide on and allocate resources i.e. determine 'what to do' and 'how to do it'.

The Need for a Gender Analysis of Revenue and Tax Systems

Although gender responsive budgeting provides the means to determine the impact of both revenue and expenditure allocations on women and men, for pragmatic reasons, the programme has focused near exclusively on the expenditure side of the budget. However, as the programme has developed and technical skills and experience have accumulated, attention should now be paid to the impact of revenue and tax systems on gender. Revenue and tax systems contain a wide range of taxes including those on personal and corporate
income, payroll, goods and services, foreign trade, wealth, gifts and inheritances. Several aspects of taxes are relevant to pro-poor and gender responsive budgeting including:

§ Direct tax: Global income taxes are typically the source of gender bias. This can be in the form of marriage penalties, where couples who do not have the option to file singly incur a greater tax liability filing joint returns than filing singly or where the tax liability on the second income in a household begins at a rate higher that the base rate of tax. Gender bias can also occur when all non-labour income (from assets, savings, property or business) or tax expenditures (subsidies, deductions, exemptions or credits) are allocated to the male spouse only or not available to a married woman who is the sole earner.

§ Indirect tax: The current trends towards reducing trade taxes and a demand for greater ease in collection has led to indirect taxes now constituting a larger percentage of tax revenue than direct taxes in many countries. While these taxes may seem to be gender-neutral as they are attached to products and services, they can have significant gender implications, given that women and men tend to consume different goods and services, and also based on the way in which household income and expenditure is managed and distributed.

§ User fees: Since the 1980s the number of countries having implemented some form of user fee system has grown considerably and user financing of basic social services has become common practice in many developing countries. Governments have come to see user fees as an alternative to tax-based financing for a range of public services. Efficiency, effectiveness and even equity arguments have been made for applying these charges, yet
supporting evidence is limited. There is, however, some disturbing evidence from studies that reveal equity losses through reduced utilisation of services among the poor and through the negative effects on well-being and health following the introduction of user fees (Esim 2000).

§ Other areas: Other tax issues may be examined for possible gender impacts. These include corporate taxes, primarily the granting of incentives to certain sectors as opposed to others; the impact of globalisation, specifically the reduction in customs and trade taxes; and the debt crisis and the fiscal drain of debt servicing,

CONCLUSION

Gender responsive budgeting provides a mechanism by which governments, in dialogue with civil society, donors and other partner agencies can integrate a gender analysis into public expenditure policies and budgets.
By combining social and economic policy, it promotes the complementarity of efficiency and equity, reducing areas of trade-off between equity and growth. It also provides a strategy for promoting efficient and equitable
economic policies as an integral component of national development. The techniques and the methodologies developed under the gender responsive budget initiative can potentially be modified and adopted to assess the
gap between the words and the actions of governments to eliminate inequality and discrimination against all underserved groups in society.

Building on the experience gained from the programme in Commonwealth countries, the Commonwealth Secretariat believes that these achievements can be consolidated and that implementation of gender responsive budget initiatives at the country can be increased by endorsement of the 'Brussels Call to Action: Strengthening economic and financial governance through gender responsive budgeting'.