ANTHOLOGY
Economic Freedom and the Status of Women
CHRIS PAUl*AND YASSAMAN SAADATMAND**
*Georgia Southern University and **Armstrong Atlantic State University–U.S.A.
Spurred by the third-world debt crisis that erupted in mid-1982, the International Mone-
tary Fund (IMF) and theWorld Bank shifted lending polices from project lending and balanceof payment issues to structural adjustment loans. These loans are tied to Structural Adjustment Programs that include a reduction in government spending, liberalized trade policies,removing restrictions on direct foreign investment, currency devaluation, and privatizationof public enterprises. The Structural Adjustment Programs were imposed in an effort tostimulate economic development by increasing the reliance on markets for the provision ofgoods and services as opposed to government programs financed through the accumulationof foreign debt and money creation.
These measures appear to be conducive to economic growth as expressed by Robert Barroin his book, Determinants of Economic Growth: A Cross—Country Empirical Study [MITPress, 1997]. He finds real per capita GDP growth is enhanced by higher initial schoolingand life expectancy, lower fertility, lower government consumption, better maintenance of therule of law, lower inflation, and improvements in the terms of trade, [p. xi ]. However, severalauthors maintain that Structural Adjustment Programs have adversely affected the economicand social status of women in subject countries. Frances Stewart, for instance, in her paper “Can Adjustment Programmes Incorporate the Interests of Women” [in Afshar and Dennis,Women and Adjustment Policies in the Third World, St. Martin.s Press, New York: pp.13-46] mentions the negative impacts of these programs on women. She maintains that therehas been a marked deterioration in the conditions women face with respect to each of theirmajor functions in most countries undergoing stabilization and structural adjustment [p. 34].Although these claims have not been empirically verified, the claims persist.
Our purpose here is to determine the relationship between increased economic freedom
on the relative economic status of women in Latin American countries. We focus on LatinAmerica to reduce the variation in unmeasured characteristics that arise with a more diverseset of countries. The equation was estimated with OLS using cross-sectional data. Theestimation equation is:
GDI = .O28FREE + .031GROW + .005MLIT + .005GOV GDP R2 = .90
(2.25) (3.78) (8.20) (4.27) F-stat = 36.72
The dependent variable is the gender-related development index (GDI) published by the
United Nations Development Program. The index measures the gender inequalities in health,longevity, education, and living standard. FREE, the level of economic freedom, is measuredby the index of economic freedom provided by the Fraser Institute. GROW is the growthrate of per capita GDP, MLIT is the male literacy rate, and GOVGDP is the percent of GDPdistributed by the government. All variables are statistically significant at the 5 percent levelor better, t-stats are in parenthesis.
The empirical results support the positive relationship between economic freedom and therelative position of women in the respective country. Thus, if structural adjustment policiesare carried out, the expectation is for women to enjoy greater levels of economic prosperity,social status, and political power. (JEL F); Atlantic Econ. J. 30(1): p. 102, Mar. 02. c "AllRights Reserved