Sunday, June 19, 2016

The role of the European Union 5/5

Research on alternatives is therefore emerging. The EU’s key role is to be less blinkered in its economic thinking and to be open to the work and findings of feminist and heterodox economists. It should also reinvigorate the gender mainstreaming of policies and broaden this analysis in order to assess the impact on different social groups, including class, race, and migrant status, to name but a few. To facilitate this process, Eurostat should ensure that data is sufficiently gender differentiated to facilitate gender budgeting. What is clear is that the existing policies are not working and have extremely negative impacts on those already marginalised. By ensuring that the economy serves society rather than being managed by a few for a few, the EU is more likely to reach its objective for economic and social cohesion and greater gender equality.

Fiscal space can be defined in a number of ways. The International Monetary Fund (IMF) states that it is “room in a government’s budget that allows it to provide resources for a desired purpose without jeopardizing the sustainability of its financial position or the state of the economy” (IMF cited by UNDP 2007). In this definition, the needs of the economy are prioritised and these needs are determined by a neoclassical view of the economy which advocates a small state, low deficit and minimum taxation to allow maximum market flexibility.

By contrast, the United Nations’ Development Programme (UNDP) defines fiscal space as the “financing that is available to government as a result of concrete policy actions for enhancing resource mobilization, and the reforms necessary to secure the enabling governance, institutional and economic environment for these policy actions to be effective, for a specified set of development objectives” (UNDP 2007:1). This definition could be modified by gender mainstreaming to become:

“Fiscal space is the available financing, designated by policy choices, to provide the necessary resources for a specific set of social, economic, and environmental objectives, taking into account the specific needs of marginalized groups using race, gender and class impact analysis” (Ida, 2013). 

In the first definition, the markets become the arbiter of social decision-making, whereas the latter definitions allow social and gender justice to come into play in state decision-making – in effect allowing the economy to work for society rather than vice versa.

By Nancy J. Hirschmann

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