Acta Universitatis Danubius. Œconomica, Vol 15, No 1 (2019)

Relating Women in Parliament and Economic Growth in an Emerging Economy – South Africa

Collins C. Ngwakwe¹

Abstract: As developing nations grapple with the economic challenges of the 21^st century, the aptness of new approaches to boost economic growth is more than ever desired. To this end, this paper examined the relationship between the proportion of seats of women in national parliament and economic growth in South Africa; accordingly, the paper is anchored on women and development theory. The research applied a quantitative approach and secondary data on proportion of female seats in South Africa’s national parliament and the GDP growth for South Africa were retrieved from the World Bank development indicators for 1998 – 2017 (20 years); in addition, foreign direct investment (FDI) was used as a control variable. The OLS regression statistics was applied to analyse the relationship at an alpha value of 0.05. Findings from the results showed that whilst the FDI disclosed no significant relationship with economic growth, the proportion of female seats in national parliament indicated a significant positive relationship with the GDP growth for South Africa during the 20 years of study at a P-value of 0.0001. The paper contributes to the literature by examining this phenomenon within the South African context. From the result, the paper makes policy and research recommendations, which includes inter alia, the need to balance the parliamentary seats equitably for females and to increase female political seats in provincial legislators and in municipal managerial seats as this has the propensity to increase economic growth the more. Further research is apposite to examine this relationship at the provincial levels and across countries in Africa in a cross-sectional panel approach.

Keywords: emerging economy; economic growth; women in parliament; sustainable development

JEL Classification: O1; O2; O10; O11; J16

1. Introduction

Since the 18^th century industrial revolution, economic growth and development has been at the forefront of state policy all over the world. This is important as economic growth and development ensures not only increased output of productivity but also enhances effective improvement in social welfare and equity (Midgley, 1999). The emergence of the 21^st century has witnessed an amalgam of economic growth models meant to boost economic development mostly for developing markets Esterly and Levine (2001), the search for new efficient and effective models is still ongoing. The advent of globalization, increase in knowledge and the gradual flaking of discrimination against female gender – all combined together is ushering new insight on the economic growth influence that is hidden in women’s leadership ingenuity (Boserup & Toulmin, 2013). The involvement of women in searching for economic growth has become more pronounced in contemporary era where growth is not only confined to financial growth, but includes a sustainable growth pattern.

This paper is important as it offers a first assessment of the role of women in parliament in South Africa’s economic growth – reason being that the South Africa’s national development plan targets the involvement of women in national economic leadership. It is a well-known fact that women in South Africa played an outstanding role in dismantling oppressive apartheid regime and the installation of democracy in the country. Since the democratic dispensation, the women of South Africa has gain increasing recognition and seats in the national parliament, this is in alignment with sustainable economic development goal 5 of the United Nations. However, there is a dearth of empirical study on how women’s participation in South Africa’s parliament relates with economic growth of the nation.

Although there are various models of economic development, the goal five of United Nation’s Sustainable Development Goals (SDG) 2015 – 2030 has become a paramount model of development given that it hinges on gender equity, a vital model for achieving sustainable economic development. Goal 5 of the SDG recommends that governments should ensure that women participates fully, effectively and equally in leadership positions requiring decision-making, be it in the political, economic or public spheres (UN, 2015) as this will ensure sustainable economic development. Being a member of parliament is a vital aspect of political participation and is one key avenue of contributing to national and economic decision making, which in turn affect economic performance of the nation, accordingly women’s involving in parliament accords them the opportunity to contribute in economic development decisions. Involving women is in consonance with women and development theories which suggests that factors which affect economic are not only external but also internal (Stolt, 2013).

There is a scanty prior research done in this unique theme, the few research done includes a cross country analysis of effect of gender in national parliament on economic growth (Stolt, 2013). Economic performance effect of women legislators in India (Baskaran, Bhalotra, Min & Uppal, 2018). Political participation of women and economic growth in Asia (Xu, 2015). These research, which focused on different geographical areas offer varied findings. This paper contributes to the few research in this field by bringing in an emerging country’s perspective from Africa and in doing so uses the result to add additional insightful information for economic development policy in South Africa and other emerging markets.

The question that underpins this paper is whether involvement of women in South Africa’s parliament has had a relationship with the country’s economic development; therefore, the core objective of this paper is to analyse empirically the relationship between growth of women in South Africa’s parliament and South Africa’s economic development.

The remainder of this paper is organised in the following order. The next section after this introduction provides a brief theoretical background using the women and development theory. Following the theoretical discussion, the next section reviews related literature. The methodology is presented after the literature review and this is followed by results and discussions; the paper ends with a conclusion.

2. Theoretical Framework and Literature Review

2.1. Theoretical Framework

The theoretical foundation of this paper is rooted in ‘women and development’ theory – it is important given that neo-development alternatives have realized that women in development should not only be about welfares for women, but most importantly how to involve women as co-agents of development – hence contemporary development approaches that exclude women as leaders and planners in development process is incomplete and may not actualize effective development expectations. This is important given that from empirical research such as in Africa’s rural agriculture, women were found to handle about 80% of rural agricultural processes more than men (Martin, 1992). This being the case, it has become pertinent, more than ever, that women should be involved in planning for economic development – hence this paper rests strongly on ‘women in development’ (WAD) theory, which is briefly discussed below.

2.1.2. Women and Development (WAD) theory

The very first approach about women and development largely saw women’s in development as that of welfare economics – where women’s role in Africa were largely regarded as being that of beneficiaries of economic development projects (Moser, 1995). However, this had an implicit connotation of undermining the hard work, ingenuity and most importantly, equitable right of women in society. Hence, a more inclusive development approach was thought to be the type where women are both team-players and beneficiaries in economic development (Joekes, 1990). This view is at the core of women and development (WAD) theory – which does not believe that women should be treated as mere recipients of economic development process, but that women should be given the chance to be agents in economic development processes; this according to Moser (1985) hinges on the fact that women occupy important facet in development. For instance, women will be in a better position to plan and executive economic development processes that touches on social issues, children and women’s issues. A liberal paradigm in economic development gained impetus from 1963-1975 after the United Nations General Assembly commissioned a body on the status of women to articulate the vital role of women in development, which amongst others dealt with the participation of women in development; this was quickly given a momentum by Boserup publication about women’s role in development (Womenwatch, 2006; Boserup, 2011; Benería et al, 2015). With the joining of many new independent states to the United Nations, the early 1960s and 1970s witnessed unprecedented increased awareness of the world about the discrimination against women, hence the rise in many movements to end discrimination against women. One of these many movements was the creation of United Nations “Commission on the Status of Women” and the subsequent “recognition of women’s role in development” (Boutros-Gahli, 1995, p. 4). This elevated the role of women in development (not as mere recipients, but as agents of development). Thus the WAD shifts away from the primordial notion that development is meant to benefit women to a neo liberal idea that development is facilitated through the involvement of women and instead of being only receivers from development women should also be allowed to participate as agents in development ventures.

Accordingly, the WAD theory garnered full momentum after the 1975 First World Conference on Women in Mexico, it sought to improve the limitations inherent in modernization theory, which in certain instances had negative consequences for women in the third world; researchers also noted that under modernization perspective of development, women’s access to modern productive resources and leadership was neglected and market forces are not been gender-neutral, hence prejudice against women persisted under the mordernisation theory as new resources for development under the modern economy were male-dominant, and women left at the brim of development despite their notable contribution to subsistence economy and the gross national product (GNP) (UNWomen, 2016; Sarker, 2006; Rathgeber, 1990). Therefore, the main trust of Gender and Development theory is that women should not be standing aloof and be seen as satisfied by being mere recipients of economic development aids, rather women should become active agents of development projects. WAD theory further advocates, where possible, to have a genre of development projects that are led by women only, this way, the patriarchal hegemonic tendencies, where women had been subjugated under the old system of economic development – mostly in Africa and other third world, world be less dominated by men. The WAD creates awareness about the outstanding performance of women as economic agents and how women play important development roles in society and advocates for some women-only development initiatives to avoid patriarchal dominance. Although the goal of WAD theory of development has not been fully actualized, but the push can be seen to be materialising on the bourgeoning number of women around the world that are constantly occupying parliamentary positions in national assemblies to contribute as agents in national and international economic development decisions. Given this blossom positions of women as agents of developmental decisions, many empirical research has thus emerged to examine whether this gradual rise in positioning of women in parliaments is yielding any economic development gains for the nations. This paper contributes to this debate by examining the South African context. The following section of the paper, reviews some preivous literature before engaging in empirical analysis using the South African data.

2.2. Review of Related Literature

The 21^st century has seen an unprecedented trend of many women ascending to political positions such as parliamentary seats in many countries of the world, and this has come with attendant impact on composition of national spending (Baskaran, Bhalotra, Min & Uppal, 2018). With this trend, few contemporary research literatures have started to seek an understanding of how women in political seats is linked to economic growth of countries that have encouraged the position of women in such political seats. This inquisition is important given that the current trend allows women to be agents of development, hence the impact should resonate on the trend of economic development. To this end, Baskaran et al (2018) analysed the effect of women legislators on the economic performance of provincial constituencies that elected women as their legislators. Using a discontinuity regression approach, Baskaran et al (2018) found a positive relationship between women legislators and economic growth of the constituencies with women legislators; they found that the economy grew by about 1.8 percent better than in constituencies with male legislators. Whilst probing the results further, they found that women legislators in India are less likely to engage in political corruption and/or political opportunism, and are more efficient that their male counterparts. The current paper will improve on Baskaran et al (2018) research because, it will use a national GDP data for South Africa and not data from constituencies. Furthermore, whilst the research of Baskaran et al (2018) used a proxy for economic growth, this current research will use the actual GDP data, which is a conventional variable used in the measure of economic growth. further results from Baskaran et al (2018) study show that male legislators have a three times likelihood of having criminal charges against them than women, that female legislators are ten times less likely to accumulate assets whilst in office than their male legislators, they also find that female legislators are more likely to oversee the final successful completion of rural road projects than their male counterparts.

Another research by DiRienzo (2018) sought to explore the impact of women in government on corruption level and general peace of the country. The research applied a cross-country data, which were tested using a mediation analysis. Findings from the research analysis indicated that increased number of women in government brings about general peace through improved provision of resources and through reduction in corruption. The positive role of women in government with corruption reduction in DiRienzo (2018) findings corroborates the findings of Baskaran et al (2018) from the Indian study, which found that women parliamentarians have low propensity to engage in corruption. In a related study, a group of researchers namely Debski, Jetter, Mösle and Stadelmann (2018) evaluated the relationship between gender and corruption in government; they studied about 177 countries and using fixed effect regression, they controlled for heterogeneity and produced a different results showing that female inclusion in politics would not necessarily lead to a significant reduction in corruption unless variables such power distance and masculinity are included in the analysis of women in politics and reduction in corruption. However, in their research analysis about gender in parliament and corruption, Jha and Sarangi (2018) found that increased participation of women in national parliament leads to a negative relationship with corruption – which suggests that increase in women’s seats in parliaments would lead to a reduction in corruption (other things being equal).

Women’s relationship with corruption studies was considered important since corruption affects economic growth (Mo, 2001). Therefore, examination of female participation in parliament and reduction in national corruption continues to gain gradual interest because of previous findings that corruption hinders economic development; for instance, in his research Mo (2001), found that a one percent increase in the level of country corruption might lead to 0.72% decrease in economic growth level, the research also found that corruption increases political instability and grossly brings about a reduction in human capital development. Esarey and Schwindt-Bayer (2017) analysed the causative relationship between women parliamentary representations and corruption; applying instrumental variables, their research found that increased representation of women in parliament would significantly reduce corruption level, and that increase in corruption level would reduce the number of women elected in national parliament. It is thus not surprising whilst some research have found that women in parliament enhances economic growth (Xu, 2015).

In a continuous search to find a relationship between women in national parliament and economic growth, Stolt (2013) applied a cross-country regression design to study this relationship across countries. Stolt divided the countries into two major groups, namely low and high income countries; however, results from the regression analysis provided no evidence that increased proportion of women in national parliament might lead to increased economic grow. Furthermore, the Stolt (2013) result showed that a more inclusive female participation in the economy would increase the general level of productivity in the economy. This increase in general productivity may perhaps draw from previous findings that women have less tendency to involve in public sector corruption than men as women are more risk averse and are more altruistic for the public interest than men (Xu, 2015).

In another related study, Xu (2015) studied how women in national politics affects the economic growth of thirty (30) countries in Asia. With GDP and women in politics data from the World Bank, Xu (2015) used the panel data regression model for data analysis. Results from the regression analysis disclosed two important findings, small percentage of female representation in national government would yield insignificant effect on economic growth but increased proportion of female representation in national government would result to a significant effect on economic growth. This shows that it is not just about female representation that matters, but the proportion of representation should be meaningful to influence economic growth. From the foregoing, it can be seen that despite few research done in this important area of economic development, the few research has no uniform consensus in their findings. Therefore, this research contributes to the ongoing literature by looking at the South African context to see if the acclaimed growth in South Africa’s female seats in parliament relates with economic growth of South Africa. If this is so, it becomes important for policy makers to improve their economic growth model in Africa by ensuring equitable representation of women in national parliaments.

3. Methodology

This research analysis applied a quantitative approach and data for this study was collected through a secondary data collection approach from the World Bank economic indicators data bank of world female parliamentarians for South Africa and from World Bank data bank on gross domestic product (GDP) and Foreign Direct Investment (FDI) for South Africa. The variables have already been measured numerically by the World Bank, hence the researcher only retrieved the numerical variables. Accordingly, time series data were collected for twenty (20) years (1998 – 2017) on the variables from the World Bank economic indicators archive. The statistical analysis was by means of Ordinary Least Square (OLS) multiple regression analysis; the analysis was conducting by using the Gretl statistical and econometric software.

OLS Multiple Regression Model:

Regression Model:  = ₀ + ₁₁ + ₂₂ + 

Where:  = GDP; ₀ = regression intercept; ₁ = regression coefficient; ₁ = main independent variable (proportion of women’s seat in parliament [WOIP]); ₂ = foreign direct investment (FDI) second independent variable (control variable);  = error (representing other unaccounted independent variables). The choice of including FDI as a control variable draws from similar usage of FDI as a control variable in similar research by Stolt (2013), who studied gender equality in national assemblies and economic growth across countries. This study area differs from others since it concentrates on the only emerging economy in Africa, which is South Africa.

Measurement of Variables: both the dependent (GDP) and independent variables (WOIP and FDI) were already measured in numerical terms and were collected as reported in the World Bank archive of World Economic Indicators, World Bank (2018). The GDP used is the GDP per capita in US Dollars based on the purchasing power parity (PPP), this was deemed more suitable since the national GDP without the PPP may not tell how much an individual has as his/his purchasing power. The woman in parliament variable is the proportion of seats or percentage of seat held by women in South African national parliament compared to men. The FDI refers to the net inflows of foreign direct invest in US Dollars in South Africa. Women’s participation in the economy is part of South Africa’s national development plan, which has gained impetus since the advent of democracy in 1994. Figure 1 presents the growth in the proportion of seats held by women in national parliament and Figure 2 is the GDP growth for South Africa.

Figure 1. Growth in Proportion of Women in Parliament 1998 – 2017 South Africa

Figure 2. GDP Growth South Africa: 1998 - 2017

3.1. Results and Discussion

Table 1. OLS Multiple Regression Results of Link Between WOIP, FDI and GDP

Table 2. Validity Test

Table 3. Test for heteroskedasticity

Table 4. Collinearity Test

Table 5. Autocorrelation

3.2. Discussion

Before the statistical results, Figure 1 and Figure 2 is presented to show the trend of women parliamentarians in South Africa and how the trend compares pictorially with the trend of GDP growth in South Africa. It can be seen that female parliamentarians in South Africa has maintained an upward trajectory since 1998 (Figure 1), this trend has a semblance with the economic growth (GDP) trend in Figure 2. The pictorial alignment of growth of women’s seats in South Africa’s parliament appear to have a corresponding upward trend with the GDP growth of South Africa. This graphical appearance tends to align with the South Africa’s national economic development plan of including women in national economy – with the hope that women’s inclusion would enhance a more equitable sustainable economic development.

The data collected was further subjected to empirical analysis using the Ordinary Least Square (OLS) multiple regression approach. The data covering a span of 20 years (1998 – 2017) was loaded unto the Gretl statistical and econometric package. The regression output appears in Table 1. The main independent variable (proportion of women’s seat in parliament) was controlled by including foreign direct investment (FDI), which was also used in related previous research as a control variable. The significance of the analysis was examined at an alpha of 0.05; the overall regression fit was significant with a P-value of less than 0.001. looking at the individual independent variables (WOIP and FDI), the p-value of the control variable FDI is 0.38, which is higher than the alpha level 0.05, which indicates lack of significant relationship with the GDP.

Regarding the main independent variable, which is the crux of the study, the resulting P-value in Table 1 indicating the influence of women’s seat in parliament on GDP gives a P-value of 0.00001 with a positive regression coefficient of 320.696. This result indicates that within the twenty years of study, number of women’s seat in the parliament of South Africa tend to influence economic growth significantly and positively. The validity of the regression analysis was conducted in Table 2 to Table 5. These analysis show that data used were normally distributed, there is lack of heteroscedasticity, there is no autocorrelation and there is no collinearity. Hence the data used and the results are valid and can be replicated by future researchers.

Although previous research on this theme have had diverse findings albeit no uniform consensus thus far, but this finding agrees with the research result of Baskaran et al (2018) who found that increase in women legislators in India has a significant relationship with economic performance in India (an emerging economy). Furthermore, the findings of this paper corroborates the empirical findings of Xu (2015) that political participation of women does foster economic growth in selected Asian countries. However, a cross-country empirical study discovered no relationship between the number of seats held by women in parliament and economic growth (Stolt, 2013). The limitation of this research includes the short time series data, which was limited to twenty years, and the concentration of women’s seat in national parliament; women in provincial legislators were not considered.

4. Conclusion

This paper aimed to evaluate how the proportion of female seats in national parliament relates with economic growth. Prior findings lacked a uniform consensus; hence this paper adds a nuance from the South African perspective. This paper and the findings is thought to be timely important given that it synchronizes with the requirement of the goal five of United Nation’s Sustainable Development Goals (SDG) 2015 – 2030, which requires governments to ensure the equal involvement of women in national leadership positions at political, economic and public sector spheres. The paper also looks internally to find growth solution, which suggests empirically that women’s seat in parliament being an endogenous growth factor is an important economic growth approach that requiring attention. This research applied a quantitative approach and collected secondary archival data from the World Bank development indicators for twenty years. The OLS regression analysis indicates that increase in the proportion of female seats in South African parliament has a positive and significant relationship with economic growth of the country. This finding thus serves as an insight for economic policy makers that strive towards gender equality in national, provincial and municipal governments as a veritable approach for improving economic growth of the country.

This current paper has contributed to earlier literature by empirically analyzing this relationship in an emerging country from Africa (South Africa) and by showing that it corroborates the finding from another emerging market in India, Baskaran (2018), which concluded that increase in women’s seats in parliament has a strong propensity to influence economic growth in an emerging market (other factors being equal). This finding should serve as a policy reference point for economic development policy in South Africa and other African countries to encourage more women’s seat in parliament.

In providing policy recommendation the paper recalls that from the literature, women have less tendency to involve in public sector corruption than men as women are more risk averse and are more altruistic for the public interest than men (Xu, 2015), furthermore the literature indicates that women are more likely to oversee the completion of public roads than their male counterparts (Baskaran, 2018). Furthermore, the empirical findings from this paper show that increase in the number of female seats in South African parliament (1998 – 2017) has significant tendency to influence a positive economic growth in South Africa. Therefore, the paper recommends that economic development policy makers should craft policies that would ensure more equal representation of women in the national parliament. Similarly, such equal representation of women’s seat should be applicable to provincial legislators, provincial premier positions and municipal managers. In addition to the above policy recommendation, the paper also recommends that future researchers should expand this research by studying the effect of women’s seats in provincial legislators on provincial economic growth of South Africa, such research should also expand the time series of study and to include other Southern African countries in the analysis to see how the relationship plays out across the Southern African countries.

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