We at CGD recently hosted a series of events illuminating the case for smarter gender policy in the private sector, a triple win that would benefit consumers, firms, and emerging economies. Change in private firms is important — but what about the world’s public sector? To create more opportunities for women and create valuable spillover effects, we might start with central banks.
Data on employment by gender for the world’s monetary authorities is generally not available, but knowing who holds the governorship is a starting point: women run only 16 of the world’s 190 central banking institutions. Where we can see staff breakdowns, the picture’s disappointing. At the end of 2013, women held just 15 percent of senior management positions at the European Central Bank. And while Christine Lagarde runs the IMF, the Fund’s senior staff is three-fourths male (“diversity in the Fund is greater than it appears,” their diversity and inclusion report optimistically notes). This is an issue that rich and poor countries alike can do much better on — this a chance for cooperation rather than finger wagging.
Announcing a mutual commitment to change the gender make-up of central banks would earn governors and senior management plaudits. A meaningful pledge would set out targets for the share of women across levels of seniority (“how much”), specify a timeline (“by when”), and commit to regularly publishing information about staff composition (“how fast”). Making the targets and their measurement public would tug aspirations and expectations gently upward, while a broad plank would enable different institutions to commit to different targets yet fall under the same umbrella.
Greater equality in the public sector will create valuable knock-on effects. In many developing countries, central banks are visible, well-resourced centres of excellence. Hiring a cadre of women economists and analysts would send a strong signal to the rest of the government, foregrounding women in decisions over employment and inflation that also affect them. And there’s an intriguing argument that it would inject greater cognitive diversity into decision-making, combating groupthink.
Central banks may be uniquely placed to make this commitment. Their credibility depends on independence, so they’re more insulated from political pressures, and so from networks of patronage or nepotism. Unlike line ministries, they’re part of elite global networks; many governors famously meet for an off-the-record confab in Jackson Hole each year. Because of their technocratic role as centres of analysis and reporting, they attract some of the most competent staff, many of whom have studied in Europe or America.
CGD’s latest research programme focuses on the clubs and rules we can reform to deliver better outcomes and opportunities for women. Smart thinking already on the table includes an idea from Charles Kenny on using legislation to encourage firms to hire more women overseas and from Mayra Buvinic on leveraging identification to empower women and girls.
Many institutions in the world’s frontier markets aren’t ones we can, or should, seek to influence. But strong links between the world’s central bankers and the special character of these institutions suggest that improving gender equity within them is something we can legitimately advocate for — and a policy shift their leaders could feasibly deliver.
Thanks to Charles Kenny for helpful comments.
CGD blog posts reflect the views of the authors, drawing on prior research and experience in their areas of expertise. CGD is a nonpartisan, independent organization and does not take institutional positions.