Why MES with Human Rights?: Rethinking Macroeconomic

Strategies from a Human Rights Perspective

Session 1: Fiscal Policy and State Obligations

September 24, 2012

Radhika Balakrishnan, Center for Women’s Global Leadership, Rutgers UniversityJames Heintz, Political Economy Research Institute, University of Massachusetts

What one or two words do you think about when you hear the word ECONOMY?

Overview

Introduction

Economic and Social Rights

Fiscal Policy and Human Rights

Feminist Analysis

Why Use a Human Rights Framework?

• Creates strong policy arguments, which can more effectively inform the formulation of legislation, regulations, and budgets to address human rights.

• Committed to sustainable change by focusing on process, rule of law, and the democratic functioning of society.

• Standards that allow all people to live with dignity, freedom, equality, justice, peace.

• Set of principles that apply to universal, inalienable, interconnected, indivisible, non-discriminatory.

International Bill of Human Rights

Universal Declaration of Human Rights,

1948

International Covenant on

Economic, Social and Cultural Rights, 1966

International Covenant on Civil

and Political Rights, 1966

Examples ofEconomic and Social Rights

Food

Work

Health

Housing

Water and sanitation

Adequate standard of living

HUMAN RIGHTS PRINCIPLES

Requirement for progressive realization

Use of maximum available resources

Avoidance of retrogression

Non-discrimination and equality

Participation, transparency and accountability

Obligations

• The obligation of conduct requires action reasonably calculated to realize the enjoyment of a particular right. – Ex. Expenditures on health

• The obligation of result requires States to achieve specific targets to satisfy a detailed substantive standard. – Ex. Health outcomes

Key Aspects of Macroeconomic Policy

Fiscal Policy• Government Expenditure• Government Revenue

Monetary Policy

Aggregate Demand

C+I+G+X-M

[consumption + investment + government spending + (exports-imports)]

What is Fiscal Policy?

• The use of government expenditure and revenue collection to influence the economy.

Basic Concepts• Deficit – Excess of spending over revenues in a given period.• Debt – A deficit in one period adds to accumulated debt that

period; a surplus reduces debt.• Spending – Government spending two types – current spending and

investment.• Investment – Usually creates a long-term capability and gives a

return in terms of greater income or lower costs.• Government revenues – Taxes, fees, royalties from minerals,

operating surpluses from government enterprises.• Government borrowing –Bonds sold by governments to financial

institutions usually in your own currency; loans are frequently in foreign currency from World Bank, regional development banks, and commercial banks.

What is the relevance of this for

feminist activists?

Trends in Real Per Capita Public Expenditure on Health, Mexico and Other Latin American Countries

(dollars at year 2000 prices)

1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 20050

50

100

150

200

250

300

350

400

450

Argentina Brasil Chile Costa Rica Cuba México

Source: Balakrishnan and Elson (2011), Economic Policy and Human Rights, Figure 3.4

Obligation of Conduct and Result

• Conduct does not always yield results therefore we need to look at both.

• Guyana: Health spending per person grew from from $79 in 1995 to $189 in 2010 (expressed in the value of the dollar in 2005).

• South Africa: Spending increased from $425 to $935 (in $2005).

• Maternal mortality rates INCREASED:– In Guyana from 170 to 280 (per 100,000 live births)– In South Africa from 260 to 300 (per 100,000 live births)

What is Government Revenue?

• Governments receive revenue from many sources including, taxation, royalties paid for utilization of natural resources, and profits from public enterprises.

• We focus on taxation as this is typically the most important way in which governments mobilize domestic resources.

Total Tax Revenue as a Percentage of GDP

Source: Balakrishnan and Elson (2011), Economic Policy and Human Rights, Figure 6.1

Tax Evasion and Avoidance in Mexico

Corporative Individuals0

0.2

0.4

0.6

0.8

1

1.2

1.4

1.6

1.8

% G

DP

Source: Balakrishnan and Elson (2011), Economic Policy and Human Rights, Figure 5.16

Taxation and Gender Equality

• Gender equality and tax policy can be examined from several perspectives.– Explicit and implicit bias.

• CEDAW requires that families be based on ‘principles of equity, justice and individual fulfillment for each member’ (General Recommendation 21, para. 4).– It implies that women be treated as equal to men in

tax laws: as individual, autonomous citizens, rather than as dependents of men.

Deficits v. Debt: What’s the Difference?

• Deficit: difference between current government spending on goods and services and total current revenue.– When a government runs a deficit, it must borrow

to make up the difference.• Debt: the total amount of borrowing by the

government.– Forms of debt: government bonds, external debt

• The public debt is very important in terms of its effect on realization of social and economic rights

• But the relationship is complex– Can protect rights during economic downturns– But high levels of debt may compromise future rights

• Many factors influence the sustainability of debt– Domestic policy, exchange rates, interest rates– International policies– Power dynamics in the global economy– Not all countries face the same constraints

Political Economy of Debt

• Who benefits from high debt servicing payments?– The owners of the debt (the people who own bonds or the

external debt)– Represents an outflow of resources

• Global inequalities– Some countries can borrow on more favorable terms than others. – Example: U.S. and U.K. have growing levels of debt but low debt

servicing costs.• Bond markets and financiers

– Borrowing can give financial interests power over domestic policy.

• Reform needed at the global level

Stimulus and Austerity

• The debate: is government spending sustainable in a crisis?– United States of America: Stimulus of $757 billion.

Example: job creation, but this part was gender biased. Also, about 1/3 was tax cuts.

– China: $586 billion. Including, housing, rural infrastructure, transportation, health and education.

– Greece: no stimulus. Austerity in the face of crisis. Massive cutbacks to government spending.

What to do now?•Utilize international human rights mechanisms such

as the Universal Periodic Review, CEDAW, CESCR, CERD, etc.•Review your government’s human rights obligations.•Monitor local and national budgets, and find out if

your country conducts gender budgeting.•Find out the size of your country’s debt and how is it

constraining/facilitating human rights.•Learn more about what the IMF is doing in your

country.

How could feminist activists use this information?

ResourcesNexus: Shaping Feminist Visions in the 21st Century

http://cwgl.rutgers.edu/resources/publications/economic-a-social-rights/nexus

Rethinking Macro Economic Strategies from a Human Rights Perspective: Why MES with Human Rights II

http://cwgl.rutgers.edu/globalcenter/publications/whymes2.pdf

Auditing Economic Policy in the Light of Obligations on Economic and Social Rights http://cwgl.rutgers.edu/globalcenter/publications/auditing.pdf

Macroeconomics and the Human Rights to Water and Sanitation http://cwgl.rutgers.edu/globalcenter/publications/Rights%20to%20Water%20and%20Sanitation.pdf

Maximum Available Resources & Human Rights http://www.cwgl.rutgers.edu/globalcenter/publications/marreport.pdf

The Right to Food, Gender Equality and Economic Policy http://cwgl.rutgers.edu/globalcenter/publications/Right%20to%20Food.pdf

Email: cwgl@rci.rutgers.edu

Website: www.cwgl.rutgers.edu ,

http://www.peri.umass.edu/

Facebook: Center for Women's Global Leadership

Twitter: https://twitter.com/CWGL_Rutgers

Tumblr: http://cwgl.tumblr.com/