Fiscal politics: The missing link between fiscal policy and gender equality – Brookings

Report on Fiscal Politics and its Implications for the Sustainable Development Goals

1. Introduction: Fiscal Policy as a Critical Enabler for the 2030 Agenda

Fiscal policy represents a primary instrument for achieving the Sustainable Development Goals (SDGs), particularly SDG 5 (Gender Equality) and SDG 10 (Reduced Inequalities). Decisions regarding revenue generation and public expenditure are fundamental to creating equitable societies. Equitable fiscal frameworks, which include progressive taxation and strategic investments in social infrastructure, are essential for advancing SDG 5. Such policies not only promote gender equality but also contribute to broader development objectives, including SDG 8 (Decent Work and Economic Growth), by expanding the tax base and fostering inclusive growth. However, the implementation of these policies is contingent upon the prevailing “fiscal politics”—the ecosystem of institutions, ideologies, and power relations that shape fiscal decisions. This report examines how fiscal politics can either support or undermine progress towards the SDGs, proposing a research agenda to navigate these complexities, especially in a global context where advancements in gender equality face significant opposition.

2. The Influence of Political Ideology on SDG-Aligned Fiscal Policy

The political orientation of a government regarding gender norms directly translates into distinct fiscal policies with varying impacts on the SDGs. Two opposing models illustrate this dynamic: a traditional framework that hinders sustainable development and an egalitarian framework that accelerates it.

2.1. The Traditional “Male Breadwinner” Model: A Barrier to SDG 5 and SDG 8

This model reinforces conventional gender roles, creating significant obstacles to achieving the SDGs. Its fiscal characteristics typically include:

• Taxation Systems: Joint personal income tax filing that imposes higher marginal rates on secondary earners, who are predominantly women, thereby discouraging their participation in the formal labor market. This directly contravenes targets within SDG 5 and SDG 8.
• Expenditure Priorities: Limited public investment in the care economy (child and elder care), placing the burden of unpaid care work disproportionately on women. This restricts their economic opportunities and reinforces gender inequality, undermining SDG 5. Spending may prioritize pro-natalist incentives over comprehensive reproductive health services, affecting SDG 3 (Good Health and Well-being).

2.2. The Egalitarian “Dual-Earner/Dual-Carer” Model: An Accelerator for Sustainable Development

This model promotes a balanced distribution of paid work and unpaid care, aligning fiscal policy with the 2030 Agenda. Its key features are:

• Taxation Systems: Individual tax filing is favored to encourage female labor force participation, contributing directly to SDG 5 and fostering inclusive economic growth as outlined in SDG 8.
• Expenditure Priorities: Significant public investment is allocated to social infrastructure, which is crucial for multiple SDGs.
  1. Care Services: Public funding for child and elder care services reduces the unpaid care burden on women, enabling greater economic participation (SDG 5, SDG 8).
  2. Social Protection: Investments in education (SDG 4), health (SDG 3), and social safety nets reduce poverty and inequality (SDG 1, SDG 10).
  3. Parental Leave: Policies that support shared parental leave promote a more equitable distribution of care responsibilities, advancing SDG 5.

3. A Research Agenda for SDG-Supportive Fiscal Politics

To overcome political barriers to equitable reform, a focused research agenda is required to analyze the core components of fiscal politics. This agenda addresses the critical gap between technical policy design and political implementation, aiming to identify pathways for advancing the SDGs.

3.1. Analysis of Key Actors and Power Relations

Understanding the influence of various stakeholders is the first step. Research should investigate:

• The formal institutions (ministries, parliaments) and informal actors (civil society, corporations, elites) that shape fiscal decisions.
• How gender dynamics within these institutions affect policy outcomes and progress on SDG 5.
• The potential for building coalitions among diverse groups to advocate for fiscal justice, aligning with SDG 16 (Peace, Justice and Strong Institutions) and SDG 17 (Partnerships for the Goals).

3.2. Assessment of Political Stances and Motivations

This area of inquiry focuses on the underlying ideologies and interests that drive fiscal policy. Key questions include:

• What are the dominant and competing narratives regarding the state’s role in promoting equality (SDG 10) and providing public services (SDG 3, SDG 4)?
• How can shared national objectives, such as economic stability or demographic sustainability, serve as entry points for dialogue on policies that advance SDG 5 and SDG 8?
• What are the specific motivations (ideological or economic) behind resistance to progressive tax and expenditure reforms?

3.3. Evaluation of Decision-Making Processes for Accountability and Inclusion

This component examines the mechanisms of fiscal governance, with a direct link to SDG 16. Research should focus on:

• The transparency, inclusivity, and accountability of budget and tax policy processes.
• Whether existing channels for public participation effectively allow diverse voices, particularly women’s organizations, to influence fiscal decisions.
• How to reform processes to ensure a holistic approach that links progressive revenue generation to specific SDG-related expenditures, thereby building public trust and support for reform.

4. Conclusion: Advancing the 2030 Agenda Through Equitable Fiscal Politics

Fiscal politics is the critical, often overlooked, factor determining whether fiscal policy serves as a tool for advancing or reversing progress on gender equality and broader sustainable development. While technical roadmaps for equitable fiscal reform exist and are proven to support macroeconomic goals like those in SDG 8, their adoption depends entirely on navigating the political landscape. The proposed research agenda provides a framework for understanding and influencing this landscape. By systematically analyzing actors, motivations, and processes, stakeholders can identify concrete entry points and strategies to overcome political obstacles, thereby accelerating progress towards SDG 5, SDG 10, and the comprehensive vision of the 2030 Agenda.

Analysis of Sustainable Development Goals in the Article

1. Which SDGs are addressed or connected to the issues highlighted in the article?

1. SDG 5: Gender Equality
   • The entire article is centered on achieving gender equality through fiscal policy. It explicitly discusses how revenue and spending decisions can either reduce or reinforce gender gaps, focusing on issues like women’s labor force participation, unpaid care work, and women’s representation in decision-making bodies. The text states, “Fiscal policy is a critical tool toward enabling gender equality,” and explores how different political stances translate into policies that affect women’s economic and social roles.
2. SDG 8: Decent Work and Economic Growth
   • The article connects gender-equitable fiscal policies to macroeconomic outcomes. It argues that policies encouraging women’s labor force participation lead to better economic performance. For example, it cites a study finding that “greater female labor force participation contributes to a larger and more diverse workforce, resulting in better job matching and innovation, both of which are main drivers of higher productivity.” It also mentions that closing gender gaps could increase GDP in emerging economies.
3. SDG 10: Reduced Inequalities
   • The article addresses inequality beyond gender, linking it to broader societal equity. It advocates for “progressive taxation that closes opportunities for avoidance and evasion for higher-income earners and large firms, while protecting lower-income earners and small businesses.” It also discusses how fiscal policy can reduce inequality through investments in social infrastructure and social protection measures for the poorest segments of the population.
4. SDG 16: Peace, Justice and Strong Institutions
   • The article emphasizes the importance of governance and institutional processes in fiscal policymaking. It calls for “transparent and effective processes for accountable decisionmaking” and questions whether existing mechanisms allow for “meaningful oversight, accountability, and citizen engagement.” This focus on fair, participatory, and transparent institutions is central to SDG 16.

2. What specific targets under those SDGs can be identified based on the article’s content?

1. Under SDG 5 (Gender Equality):
   • Target 5.1: End all forms of discrimination against all women and girls everywhere. The article discusses discriminatory fiscal policies, such as joint personal income taxation where “higher marginal rates are applied to secondary incomes, which are typically earned by women,” and advocates for reforms like enforcing laws on anti-discrimination.
   • Target 5.4: Recognize and value unpaid care and domestic work through the provision of public services, infrastructure and social protection policies. The article heavily emphasizes investment in care, stating that equitable policies include “investment in care and allocations aimed to reduce gender gaps” and “scaling up investment in care as a pathway to growth and fiscal sustainability.” It contrasts ideologies where care is a private responsibility versus a collective one supported by the state.
   • Target 5.5: Ensure women’s full and effective participation and equal opportunities for leadership at all levels of decision-making in political, economic and public life. The article questions women’s representation and power in fiscal decision-making bodies, asking “which women participate in decisionmaking processes and whether they are effectively able to take part in and shape key decisions.”
   • Target 5.c: Adopt and strengthen sound policies and enforceable legislation for the promotion of gender equality and the empowerment of all women and girls at all levels. The article is fundamentally about this target, arguing for a “feminist agenda for fiscal policy and politics” and outlining specific policy options like paid parental leave and individual tax filing to promote gender equality.
2. Under SDG 8 (Decent Work and Economic Growth):
   • Target 8.2: Achieve higher levels of economic productivity through diversification, technological upgrading and innovation. The article links gender equality to productivity, citing research that “greater female labor force participation contributes to a larger and more diverse workforce, resulting in better job matching and innovation, both of which are main drivers of higher productivity.”
   • Target 8.5: By 2030, achieve full and productive employment and decent work for all women and men… and equal pay for work of equal value. The article directly supports this by advocating for policies that “encourage women’s labor force participation,” such as investment in childcare and paid parental leave, which are shown to increase mothers’ employment.
3. Under SDG 10 (Reduced Inequalities):
   • Target 10.2: By 2030, empower and promote the social, economic and political inclusion of all, irrespective of age, sex, disability, race, ethnicity, origin, religion or economic or other status. The article’s focus on equitable fiscal policy, including support for small businesses and lower-income earners, directly addresses this target.
   • Target 10.4: Adopt policies, especially fiscal, wage and social protection policies, and progressively achieve greater equality. This target is the central theme of the article, which explicitly states that “Fiscal policy is a critical tool toward enabling gender equality, as well as other forms of equity in society.” It details specific fiscal tools like “progressive income taxes” and “investments in physical and social infrastructure” to achieve this.
4. Under SDG 16 (Peace, Justice and Strong Institutions):
   • Target 16.6: Develop effective, accountable and transparent institutions at all levels. The article calls for unpacking the “black box of fiscal politics” and building “transparent and effective processes for accountable decisionmaking.”
   • Target 16.7: Ensure responsive, inclusive, participatory and representative decision-making at all levels. The article questions whether current processes are fair and participative, asking, “What spaces are available for consultation and participation so that a diversity of actors can provide inputs into decisionmaking processes?”

3. Are there any indicators mentioned or implied in the article that can be used to measure progress towards the identified targets?

1. For SDG 5 Targets:
   • Women’s labor force participation rate: This is a key implied indicator. The article repeatedly discusses policies that “encourage women’s labor force participation” and cites a study from Norway where universal childcare “increased mothers’ employment by 32 percentage points over the baseline.”
   • Proportion of women in leadership/decision-making roles: The article implies this indicator by discussing the need to go beyond simple representation and interrogate “women’s experience in positions of leadership” and “whether there is a critical mass in higher-level government roles.”
   • Existence of gender-responsive fiscal policies: The article implies tracking the adoption of specific policies, such as individual vs. joint tax filing, paid parental leave, and public investment in child and elder care services.
2. For SDG 8 Targets:
   • Gross Domestic Product (GDP) growth: The article explicitly uses GDP as an indicator, stating that closing gender gaps in the labor force could lead to a gain “as large as 23% of gross domestic product (GDP)” in emerging economies.
   • Labor productivity: This is mentioned as a key outcome of increased female labor force participation, which leads to “better job matching and innovation, both of which are main drivers of higher productivity.”
3. For SDG 10 Targets:
   • Structure of the tax system (e.g., progressivity): The article implies measuring the degree of tax progressivity by advocating for “progressive income taxes” and taxes on wealth, while reducing the burden on “lower-income firms and workers.”
   • Public expenditure on social services: This is an implied indicator, as the article calls for “investments in physical and social infrastructure (education, health, child and elder care); cash transfers and other social protection measures.”
4. For SDG 16 Targets:
   • Public access to fiscal information: The article implies this by asking, “what information is made publicly available through consultations and key debates leading up to decisionmaking?”
   • Mechanisms for citizen participation: The article suggests tracking the existence and effectiveness of “spaces… for consultation and participation so that a diversity of actors can provide inputs into decisionmaking processes.”

4. Summary Table of SDGs, Targets, and Indicators

Source: brookings.edu