Governments across Eastern Europe, Eurasia, and the Middle East are at a pivotal juncture in their economic planning. A burgeoning body of evidence increasingly substantiates the direct link between gender equality and economic prosperity. Nonetheless, in many countries, the female labor force participation rate remains significantly lower compared to that of men—an untapped reservoir of economic potential. This is where gender-responsive budgeting (GRB) comes into play. Viewed often as a social initiative, GRB has emerged as a potent macro-level economic strategy that embeds gender considerations into fiscal planning.
Integrating GRB into financial planning can boost GDP, enhance workforce participation, and improve fiscal sustainability, according to a new report by the Association of Chartered Certified Accountants (ACCA). The economic case for greater female participation in the workforce is overwhelming. McKinsey & Company estimates that advancing women’s equality could add $12 trillion to global GDP. The European Institute for Gender Equality projects that closing gender gaps in labor participation and earnings in the EU could increase GDP per capita by up to 10% by 2050. IMF research suggests that GDP in Europe and Central Asia could rise by 10% or more if gender inequality were eliminated. Meanwhile, World Bank data shows that in the Middle East, where female labor force participation is the lowest globally at 38%, economic growth is hindered by an underutilized talent pool.
1. Develop Institutional Capability and Consciousness
The first step toward effective GRB implementation is building institutional capacity and awareness by educating public officials in gender-sensitive budgeting. GRB does not entail channeling more resources into women-specific programs. Instead, it involves a meticulous analysis of how national budgets impact men and women differently and designing policies that address these disparities. Jessica Bingham, Global Sustainability Lead at ACCA, emphasizes that incorporating gender considerations into budgetary processes ensures resources are allocated to meet the diverse needs of all. This not only promotes fairness but also lays a solid foundation for sustainable economic growth and social inclusion. The International Labour Organisation underscores GRB’s efficacy in shaping education, healthcare, and childcare policies—critical factors influencing female workforce participation.
In countries with robust childcare support, higher labor participation rates among women are often observed, whereas nations with weak provisions see larger gender gaps in employment. Despite the clear advantages, many government budgets remain gender-blind, overlooking the structural barriers women face in accessing education, employment, and entrepreneurship. Therefore, educating public officials in gender-aware budgeting is not merely a social initiative but an economic imperative. By ensuring that fiscal policies consider and address gender disparities, countries can unlock the full potential of their labor force, driving stronger economic growth and more inclusive development.
2. Enhance Data Gathering and Examination
The second crucial step in implementing GRB is enhancing data collection and analysis to ensure financial policies are supported by detailed data on gender differences. Effective GRB relies on accurate, disaggregated data to identify and address gender disparities within national budgets. For policymakers to design and implement effective GRB strategies, they must have access to gender-disaggregated data across various sectors, such as education, healthcare, and employment. Robust data collection mechanisms enable governments to track progress, measure the impact of GRB initiatives, and make evidence-based decisions.
In countries where data collection processes are deficient, gender disparities are likely to be underestimated or overlooked entirely, resulting in ineffective policy interventions. Strengthening data collection and analysis capabilities ensures that gender considerations are central to fiscal policy development. This not only helps identify areas where gender disparities persist but also informs targeted interventions to bridge these gaps. By investing in comprehensive data collection and analysis, governments can better understand the economic contributions and challenges faced by different genders, enabling them to design policies that promote greater gender equality and unlock economic potential.
3. Adopt Best Practices
The third step toward successful GRB implementation is learning from best practices and benchmarking against countries that have effectively integrated gender-responsive budgeting, such as Austria. Austria is often cited as a global leader in GRB, having enshrined gender-responsive budgeting in its constitution. Gender equality is one of the nine core criteria for assessing budget proposals in Austria, making it a fundamental aspect of the country’s fiscal planning process. UN Women highlights Austria’s pioneering efforts, emphasizing key policies like embedding gender equality in the education system, funding violence prevention programs, and promoting women in leadership roles.
Austria’s approach to GRB has yielded tangible benefits, including increased female labor force participation and enhanced gender equality across various sectors. However, challenges remain, as the quality and ambition of GRB objectives vary. Additionally, ACCA’s report underscores the need for ongoing capacity-building among government officials to ensure long-term success. Learning from countries like Austria provides valuable insights into the practical steps and policy interventions necessary to achieve effective GRB. By adopting best practices and tailoring them to their unique contexts, governments can enhance the efficacy of their gender-responsive budgeting initiatives, ultimately driving more inclusive economic growth and development.
4. Facilitate Cross-Departmental Collaboration
The fourth key step in implementing GRB effectively is establishing inter-ministerial collaboration, with finance ministries working closely with labor, education, and social welfare departments. GRB requires a coordinated effort across various government departments to ensure that gender considerations are integrated into all aspects of fiscal policy. According to Joe Fitzsimons, Senior Manager for Policy & Insights at ACCA, effective GRB implementation necessitates collaboration between finance ministries and other departments responsible for key areas such as labor, education, and social welfare.
By fostering cross-departmental collaboration, governments can develop comprehensive and cohesive GRB strategies that address gender disparities across multiple sectors. This collaborative approach enables the pooling of resources and expertise, ensuring that policies are designed and implemented in a manner that promotes gender equality and maximizes economic potential. Moreover, inter-ministerial collaboration facilitates the sharing of best practices and lessons learned, further enhancing the effectiveness of GRB initiatives. By prioritizing cross-departmental collaboration, governments can create an integrated framework for gender-responsive budgeting, ultimately driving more inclusive and sustainable economic growth.
5. Promote Gender-Diverse Leadership
The fifth and final step in effective GRB implementation is promoting gender-balanced leadership by increasing female representation in government and policy-making bodies. Gender-diverse leadership is crucial for ensuring that gender considerations are integrated into fiscal policies and that GRB initiatives are effectively executed. Female representation in leadership positions brings diverse perspectives and experiences, fostering more inclusive and equitable decision-making processes. Moreover, women leaders are often more attuned to the challenges faced by women in the workforce, enabling them to advocate for policies that address these issues and promote greater gender equality.
Governments must actively work to increase female representation in leadership roles across public sectors, including finance, labor, education, and social welfare departments. This can be achieved through targeted initiatives such as leadership development programs, mentorship schemes, and gender quotas. By promoting gender-diverse leadership, governments can create a more inclusive and equitable policy environment, ensuring that GRB initiatives are effectively designed and implemented. Ultimately, fostering gender-balanced leadership is a critical component of successful GRB implementation, driving more inclusive economic growth and unlocking the full potential of all citizens.
A Timely Moment for Action
Governments in Eastern Europe, Eurasia, and the Middle East are at a crucial point in their economic planning. Increasingly, evidence highlights the direct correlation between gender equality and economic growth. Yet, in many of these regions, women’s participation in the labor force remains substantially lower than men’s, representing an untapped economic resource. This is where gender-responsive budgeting (GRB) becomes essential. Typically seen as a social initiative, GRB is now recognized as a powerful economic strategy that integrates gender considerations into financial planning.
According to a new report by the Association of Chartered Certified Accountants (ACCA), incorporating GRB can boost GDP, increase labor force participation, and enhance fiscal sustainability. McKinsey & Company estimates that promoting women’s equality could add $12 trillion to global GDP. The European Institute for Gender Equality projects that bridging gender gaps in labor participation and earnings in the EU could raise GDP per capita by up to 10% by 2050. IMF research indicates that eliminating gender inequality could raise GDP in Europe and Central Asia by 10% or more. World Bank data reveals that in the Middle East, where female labor participation is just 38%, economic growth is stymied by an underused talent pool.
