Proposal for a Global Fund for Women through Innovative Finance

ABSTRACT

Despite the spread of budget initiatives for gender equality following the Beijing Declaration of 1995, resources allocated for eliminating gender inequalities remain inadequate. This paper proposes to create a Global Fund for Women through Innovative Finance (GFWIF) with the ability to raise funds through innovative sources of finance on a scale more appropriate to the estimated requirements of making reasonable progress toward gender equality (US$31–107 billion per year in constant 2014 dollars). It builds on previous calls by feminist economists for the establishment of such funds through global forms of taxation. Since donors’ commitments only meet the lower bound, the GFWIF could scale up funding for gender equality interventions commensurate with country needs. Global resource mobilization through innovative mechanisms, including allocations of new Special Drawing Rights, currency transaction taxes, and carbon taxes, have the potential to provide the necessary financing at a much faster pace than is currently possible.

KEYWORDS:

• Gender mainstreaming
• gender equity
• human rights
• international financial institutions
• women’s agency
• economic policy

JEL Codes:

• J16
• F33
• H87

ACKNOWLEDGMENTS

For their comments and suggestions, we would like to thank Günseli Berik, seminar participants at the Gender and Macroeconomics International Working Group Workshops, and three anonymous referees. For excellent research assistance, we thank Ngoc Ngo. All errors are, of course, our own.

Notes

1 GFWIF differs from the private foundation Global Fund for Women in that the latter is a privately funded foundation (www.globalfundforwomen.org), while the GFWIF that we propose in this paper aims to raise funding from several public sources of innovative finance, which we explain in more detail in the subsequent sections.

2 Some examples of such cooperation include the BRICS New Development Bank, the Asian Infrastructure Investment Bank, regional development banks in Latin America, Asia, and Africa, as well as several reserve-pooling initiatives such as Chiang-Mai Initiative, the Latin American Reserve Fund, and the Arab Monetary Fund.

3 Priority areas for the use of these funds are explained in the supplemental material available online.

4 A major contribution over the past decade has been made by the Clean Development Mechanism (US$28 billion), while the next two largest sources have yielded much less in terms of additional resources – the IFFI (International Finance Facility for Immunization) has yielded US$3.4 billion and the solidarity levy on airline tickets slightly over US$1 billion (UNDP 2011).

5 The particular governance structure of such a global fund is beyond the scope of the current paper. However, it would require representatives from all countries and would function in collaboration with existing international organizations.

6 Detailed explanation on reasons for using this mechanism of international economic cooperation is available in the supplemental online material.

7 Since high-income countries hold 60 percent of the quotas at the IMF and the new SDR allocations are distributed based on country quotas, high-income countries as a whole would receive 60 percent of the new SDR allocations. It is also known that roughly 70–80 percent of these reserves remain unused in central bank balance sheets.

Additional information

Notes on contributors

Bilge Erten

Bilge Erten is Assistant Professor of Economics at Northeastern University. She received her PhD in economics from the University of Massachusetts Amherst in 2010. She was a postdoctoral research scholar of the Committee on Global Thought at Columbia University from 2012 to 2014, and is currently a fellow of the National Bureau of Economic Research Diversity Initiative for Tenure in Economics (NBER DITE). She is a member of the Gender and Development Initiative at Northeastern University. Her primary research interests are in economic inequality, economic development, and international economics, with a particular focus on empirical research. She received her BA in economics from Middle East Technical University in Turkey.

Nilüfer Çağatay

Nilüfer Çağatay is Professor of Economics at the University of Utah, Salt Lake City. Her research focuses on gender and development, and on engendering macroeconomics and international trade theories and policies. In 1994, with Diane Elson and Caren Grown, she founded the International Working Group on Gender, Macroeconomics, and International Economics (GEM-IWG). She has coedited two special issues of World Development focusing on gender and macroeconomics, and worked as economic advisor at UNDP’s Social Development and Poverty Elimination Division. Çağatay received her BA in economics and political science from Yale University and her MA and PhD in economics from Stanford University. She is currently on leave from the University of Utah and is working at UN Women's Regional Office for Europe and Central Asia as Policy Advisor on Women's Economic Empowerment.