Women in Economic Development, International Trade, and Economic Changes

Women and Economic Development

LG 56-1: Women's Roles in Economic Development

Economic development profoundly alters women's roles in society, influencing marriage, freedom of movement, and educational opportunities. Historically, families have often favored sons due to the perception that they would provide better financial support. However, economic growth changes this dynamic by increasing job opportunities for all genders, leading families to invest more in girls' education.

Female Education

There's a strong correlation between economic growth and girls' education rates. As economies grow, girls stay in school longer and attend college at higher rates. Globally, secondary education rates for girls have been rising in the 21st century, sometimes exceeding those of boys in developed economies like the United States.

Delayed Marriage and Declining Fertility Rates

Higher education for girls results in delayed marriage and lower adolescent childbearing rates, leading to fewer children per woman. Economic growth is linked to declining fertility rates, shifting girls' roles to be more similar to boys', with education and formal sector employment becoming increasingly common for both genders. Consequently, women's traditional roles as wives and mothers decrease, opening opportunities for formal sector work and public life.

Public Life

Traditionally, women are assigned to private, domestic spaces while men occupy public spaces. Economic development breaks down these divisions, allowing women to participate in public life at multiple spatial scales. Geographic mobility, a measure of individual liberty, also increases for women as they become more involved in education, employment, and the public sphere. For example, the growth of the service sector in the U.S. and manufacturing in countries like China and Mexico has provided new job opportunities for women, increasing their independence.

Empowerment and Political Participation

Higher education rates for women correlate with greater civic engagement and political participation. Women's presence in public spaces enhances their ability to make choices and participate in societal decision-making. Women's participation in national parliaments is a key measure, although it doesn't capture all forms of public and political engagement. The Gender Empowerment Measure (GEM) offers a broader assessment, considering parliamentary representation, economic decision-making positions, and earned income share.

Economic development, education, and delayed marriage are closely linked to increased political opportunities for women, giving them a greater voice in public policy matters like health and education, which can further enhance opportunities for girls and women.

LG 56-2: Impact of Women's Workforce Presence on Gender Parity

Despite increasing participation in education and the workforce, gender inequalities persist. Jobs are often arbitrarily labeled as "men's work" or "women's work," with the latter typically paying less. Gender parity is measured by relative access to education, income, and workforce participation.

Devaluing Women's Labor

"Women's work" often includes unpaid labor at home. Women globally spend more than twice as much time as men in unpaid family care and domestic work, limiting their participation in the formal workforce. This pushes women towards informal sector employment, which is more flexible but offers worse labor conditions and lower wages. In developing economies, many women work in agriculture, and there is a connection between GDP per capita and women's agricultural employment.

Countries with the lowest GDP per capita often have high rates of women in agriculture. Wealthy countries have high rates of women in higher-paid professional jobs, while countries in the middle-range GDP per capita have the lowest female participation rates.

"Men's Work" and "Women's Work"

The definition of men's versus women's work varies historically and geographically. Gender divisions can be legally enforced. The manufacturing sector exemplifies this division; initially considered "men's jobs," the situation changed temporarily during World War II when women filled factory positions. In developing countries, new manufacturing jobs are often "coded female" in industries like garment and electronics assembly. While this increases women's economic independence, it often maintains gender disparities with low wages and poor conditions.

There is also significant gender disparity at the highest employment levels; only a small percentage of the world's largest corporations are headed by women.

Wage Disparity

Gender coding of jobs leads to wage disparities, with male-coded jobs commanding higher wages, even when women work in the same roles. Women consistently earn less than men, resulting in a persistent gender pay gap, with women earning between 20 and 32 percent less worldwide. Developed countries generally have smaller pay gaps, but significant regional variations exist.

LG 56-3: Microloans and Opportunities for Women

In developing countries, women have limited access to financial services. Microcredit has been introduced as a solution.

Microloans as Economic Development Strategy

Microloans, very small loans to people with little income or collateral, help women start or expand small businesses. Economist Muhammad Yunus's work in Bangladesh demonstrated notable success and earned him the Nobel Prize. Microcredit programs have provided small loans to help women purchase supplies for various enterprises, improving their living standards.

The success led to microcredit becoming a standard component of economic development policy. However, studies showed that the average microloan recipient was not significantly better off financially than those who did not receive a microloan.

The Limits of Microloans

Microloans remain popular and beneficial, helping to pay for school fees and improve living conditions. They might not eliminate poverty but can provide a more comfortable life. While microloans have improved some women's lives and helped them start businesses, they are not a universal solution for widespread poverty among women in the developing world.

Economic development changes women's roles, but gender parity remains a distant goal. Microloans can assist but are insufficient on their own.

Trade and the World Economy

LG 57-1: Basis of International Trade

International trade involves nation-states exchanging goods and services. Exports go out, while imports come in. Theories about international trade have evolved over time.

Explaining International Trade

For centuries, geographers and economists have sought to explain why countries trade with one another. In the 16th century, mercantilism was the prevailing theory, where each country strives to export more than it imports to accumulate wealth. Colonialism and protectionism were central to this system.

Adam Smith argued for trade based on a country's absolute advantage, the ability to produce goods or services more efficiently than another country. Smith opposed protectionism in favor of free movement of goods.

David Ricardo proposed that trade occurs due to comparative advantage, a country's ability to produce one product more efficiently than others within its economy. Countries should specialize in industries with a comparative advantage.

More recent explanations emphasize complementarity, how well one country's export profile matches another's import profile. Transnational corporations (TNCs) are also recognized as dominant players in global trade. Peter Dicken defines a TNC as a firm with the power to coordinate operations in multiple countries. Competitive advantage is a firm's ability to outperform other TNCs.

Emerging Patterns of Global Trade

The importance of international trade has increased rapidly under globalization. World GDP growth closely matches the growth in world merchandise trade volume. Trade between TNCs has eclipsed trade between countries, accounting for roughly two-thirds of world exports. Much of this trade occurs within TNCs.

The growth in global trade is geographically uneven; a few countries account for over 50 percent of total world trade. China leads in goods trade, while the United States leads in commercial services trade. Asia has seen the highest export growth, while Africa's exports have declined. Developing economies' trade growth lags behind developed countries.

LG 57-2: Neoliberal Policies and Globalization

Neoliberalism, with its pro-market and anti-government positions, has displaced protectionism as an economic development strategy. This involves reducing government ownership and regulation and promoting privatization. Neoliberalism promotes free trade by reducing government barriers and deregulating global financial markets.

Trade Organizations

The United Nations (UN) organized the Monetary and Financial Conference in Bretton Woods in 1944 to create an international regulatory system to promote free trade. This led to the creation of the International Monetary Fund (IMF) and the World Bank.

The IMF seeks to foster global monetary cooperation, achieve financial stability, facilitate international trade, and promote sustainable economic growth. It provides loans to countries in debt. The World Bank provides funding and expertise to promote sustainable economic growth in developing countries.

The General Agreement on Tariffs and Trade (GATT) aimed to reduce trade barriers. The WTO regulates trade among member states, providing a framework for negotiating agreements and resolving disputes. The IMF, World Bank, and WTO stimulate global economic growth, stabilize the global financial system, and promote free trade.

Regional Trade Agreements

Regional initiatives include free-trade agreements and customs unions.

Free-Trade Agreements

A free-trade agreement reduces tariffs and promotes foreign investment. Tariffs are taxes on imported goods and services. The United States-Mexico-Canada Agreement (USMCA) is an example. The European Union (EU) also has a free-trade agreement at its core.

Customs Unions

A customs union is a free-trade agreement combined with a common external trade policy for nonmembers. The European Union Customs Union (EUCU) is an important example. Mercosur is a South American trade bloc.

Organization of the Petroleum Exporting Countries (OPEC)

OPEC regulates oil output, influencing global oil supply and prices.

Government Initiatives

Nation-states implement laws and policies affecting trade. Tariffs are used to negotiate favorable trade agreements, sometimes resulting in tariff wars. Trade embargoes are official bans on trade with specific countries or goods. Governments also promote international trade and invest in infrastructure to encourage trade and economic growth.

LG 57-3: Interconnectedness and Interdependence of Economies

The world economy is highly interconnected, with consumer purchases dependent on activities in multiple countries.

The Importance of Financial Markets

The growth of financial services is important. New technologies enable near-instantaneous trade of financial products. This has sped up global trade and expanded the world's total GDP.

Global trade in financial products is conducted through financial markets, including stock markets, bond markets, and foreign exchange markets. These markets operate globally and are interconnected.

International Financial Crises

The world economy has experienced financial crises that negatively affected countries. These crises demonstrate the interconnectedness of the world.

1980s Latin American Debt Crisis

The 1973 OPEC oil embargo increased oil prices, leading to petrodollars being invested in international banks. This created a global surplus of money, which lowered the cost of international credit. Latin American governments borrowed to support industrialization, leading to a debt crisis. The IMF intervened to refinance Latin America's loans.

Global Financial Crisis of 2007-2008

Risky financial products led to the global financial crisis of 2007-2008. Banks offered mortgages to people with few resources and bundled these loans into products for investors. Real estate became overvalued, and house prices plunged. Mortgage holders defaulted, causing the value of debt products to collapse. Investment banks failed, and governments intervened to stabilize the economy.

Economic Development

The rising importance of financial markets has reinforced geographically uneven development. A small number of cities control most international financial transactions. Global financial crises affect developed and developing economies differently. The Latin American debt crisis led to a change in development strategy, with the IMF imposing neoliberal policies and forcing countries to open up to foreign investment and reduce spending on social programs.

Changes as a Result of the World Economy

LG 58-1: Economic Restructuring, Industrialization, and Development

The world economy is constantly changing. This section examines recent economic restructuring, including deindustrialization in core regions, manufacturing growth in the periphery, and global shifts in regional economic power.