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

1. Introduction

Fiscal policy is a critical tool toward enabling gender equality, as well as other forms of equity in society.¹ It is where key decisions are taken about how much tax to raise (how big is the government), where that revenue comes from (which groups contribute, comparatively), and how the available budget is spent (competing spending priorities). Policies that enable equity, for example, include progressive taxation that closes opportunities for avoidance and evasion for higher-income earners and large firms, while protecting lower-income earners and small businesses.² On the spending side, equitable policies include investment in care and allocations aimed to reduce gender gaps and encourage women’s labor force participation, which, over time, contribute to an expanded tax base and fiscal space. Fiscal policy—and the processes associated with it—is essential to gender equality because it alters what gets funded (expenditure priorities), how it’s funded (tax/transfer design and off-budget tools), and who can scrutinize it (accountability and transparency).

Although fiscal policy can be a powerful tool to reduce gender gaps, it can also be used to reinforce them. In Grown and Mascagni (2024), we argued that substantial progress toward gender equality requires embedding revenue and spending decisions firmly in a feminist agenda for fiscal policy and politics.³ In this chapter, we explore the concept of fiscal politics and argue that it is often the key missing link to explain whether and how fiscal policy works toward equitable outcomes. We also argue that, although the literature on political aspects of policy reform has expanded in the past decades, these insights and frameworks have not been applied to studying this missing link from a gender equality lens. Unpacking the concept of fiscal politics is essential to identify entry points and pathways for progressive tax reform and better spending, what are the key enablers and obstacles to it, and solutions to promote or overcome them, respectively.

Studying fiscal politics from a gender lens is particularly important because, after decades of progress, many countries are seeing a substantial backlash against gender equality in the context of a broader decline of political support and narrowing space for tackling various types of inequalities.⁴ This risks not only reversing the achievements of the past decades but also preventing essential future progress.⁵ While this paper focuses specifically on gender equality, this issue—and the arguments we make here—intersects and connects deeply with other forms of inequality across a wider set of groups in society.

There is no standard definition of “fiscal politics” in the academic or policy literature, but the International Monetary Fund (IMF) offers a starting point: Fiscal politics captures the influence of politics in fiscal policymaking, with a particular focus on elections, ideology in the ruling party, and political fragmentation.⁶ Our definition of “fiscal politics” builds on this to include elements from relevant literatures concerned with the understanding of institutions, power, political settlements, and elites. We use the term “fiscal politics” to describe the ecosystem of institutions, groups, ideologies, interests, narratives, and power relations that are often missed in the debate about fiscal policy and gender equality. Our definition also imbues this concept with a gender equality lens. This chapter does not aim to provide a new conceptual framework on fiscal politics. Rather, it draws on elements in recent literatures that are increasingly concerned with politics and its implications for government policy and reform to propose an agenda for future research.

The rest of this chapter proceeds as follows. Section 2 illustrates the centrality of fiscal politics by describing how different political stances around gender norms and roles translate into different sets of fiscal policies. Section 3 then proposes a set of questions related to key actors, political stances, and processes to begin opening the black box of fiscal politics and building a roadmap for future research on this topic.

2. Exploring fiscal politics through a gender lens: A stylized case of gendered political stances

When it comes to gender equality, some fiscal policies are more effective than others in achieving progress in equality of opportunity between men and women, as well as equity across other groups in society. Contributions to this compendium provide clear pathways for equitable fiscal reforms, including options to generate domestic resources fairly (Kharas, Abramovsky and Granger, Komatsu, Gallien and van den Boogaard), to translate those resources into sectors and policies that promote gender equality as part of a holistic fiscal framework (Onaran and Oyvat), and to scale up investment in care as a pathway to growth and fiscal sustainability (Onaran and Oyvat, Tribin and Reyes, and Miluka).

More specifically, equitable tax reform typically includes a combination of progressive income taxes; the adoption of taxes on wealth, including income deriving from it (e.g., capital gains) or the transfer of wealth (e.g., inheritance); more effective taxation of multinational corporations; broad-based consumption taxes that minimize tax exemptions and incentives that benefit disproportionately large firms; and reducing the financial and compliance burden of taxation on lower-income firms and workers through, for example, sufficiently high exemption thresholds for simplified and presumptive tax regimes.⁷ These reforms would be paired on the expenditure side with investments in physical and social infrastructure (education, health, child and elder care); cash transfers and other social protection measures for the poorest segments of the population; implementation of paid parental leave policies; and appropriate resource allocations for enforcement of laws on anti-discrimination, gender-based violence, and equality in marriage and divorce.⁸ These are all possible technical options to make fiscal policy work toward gender equality—and equality more generally.

Related literature has argued that the policy choices outlined above are not just better for gender equality; they also result in better macroeconomic outcomes in terms of jobs, growth, and fiscal stability—issues which concern all countries, whether or not gender equality is high on the political agenda. For example, Hsieh et al. (2019) find 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.⁹ The IMF (2024) finds that the average gain from closing gender gaps in labor force participation in emerging markets and developing economies could be as large as 23% of gross domestic product (GDP). These effects are not limited to low- and middle-income countries. Eckhoff Andresen and Havnes (2019), for instance, find that the expansion of universal childcare for toddlers in Norway increased mothers’ employment by 32 percentage points over the baseline,¹⁰ and that parental leave enabled work-life balance, increasing productivity at work. In addition to their benefits on employment and growth, these policies also contribute to fiscal sustainability.¹¹ There is therefore an increasingly clear case for equitable fiscal policy, grounded not only on normative considerations about gender equality but also on its instrumental role to achieve better macroeconomic outcomes and fiscal sustainability.

Whether or not equitable reforms are adopted depends on fiscal politics, as defined above. Gender norms affect several aspects of fiscal politics, including actors (e.g., who the key groups are, and their relative power to influence decisionmaking), as well as interests and ideology, discussed in Section 3. We illustrate this point using an example about ideology, to show how opposing political stances around gender norms and roles influence revenue and expenditure decisions differently. The two stylized extremes that can be embedded in fiscal systems are a traditional male breadwinner/female carer ideal and an egalitarian dual-earner/dual-carer ideal. In reality, there is a wider plurality of narratives around gender norms that exist on a spectrum, often coexist in any given context, and intersect and correlate with a country’s economic structures, its level of income, and other dimensions of inequality like ethnicity or religion.¹²

In our stylized “traditional” narrative, women’s main roles are as caregivers, and men’s main roles are as breadwinners. Typical fiscal signatures include joint personal income taxation (PIT) in which joint filing is the norm and higher marginal rates are applied to secondary incomes, which are typically earned by women,¹³ and spending programs that reinforce women’s unpaid caregiving roles, as well as support for maternal and child health over women’s reproductive rights and health.¹⁴ The male breadwinner model is also reflected in the nature of deductions, exemptions, and allowances available to different taxpayers—for instance, granting deductions for additional children, or deduction of work expenses for salaried positions in certain professional occupations, where men dominate compared to services such as domestic work and informal employment, where women dominate.¹⁵ The fiscal stance on the expenditure side would tend to exclude collective responsibility for social reproduction (e.g., caregiving), leaving it to families or the market. However, in contexts with strong traditional norms on gender roles, leaving this responsibility to individuals or households risks reinforcing existing power imbalances and inequalities.

By contrast, our stylized “egalitarian” narrative emphasizes more balance between work and family for everyone, implying a redistribution of paid activities and caregiving between women and men, as well as a distribution of care responsibilities between the public and private spheres. On the revenue side, an egalitarian stance would favor individual filing and PIT design that encourages female labor force participation.¹⁶ The expenditure side would reflect allocations for a range of policies and services that encourage female labor market participation, including those noted at the beginning of this section. This political stance tends to favor a collective approach to care where the state takes more responsibility over it, and allocates appropriate resources to provide and remunerate care.

This highly simplified example illustrates how different ideologies—egalitarian and traditional in this case—can translate into different political stances and preferences on fiscal policy. In reality, there are several ideas and ideologies that overlap, compete, and coexist. For example, different stances and narratives around the size and role of government intersect with gender norms but don’t relate to them directly. In the small state or minimal government narrative, social and economic decisions are largely left to households and the market.¹⁷ A traditional gender norms narrative often aligns with skepticism over a larger welfare state.¹⁸ The small state narrative also results in a tendency to protect wealth and capital from taxation, based on now highly contested—and to some degree discredited—arguments that increasing taxes on the wealthy would have negative effects on growth and economic development.¹⁹

By contrast, an egalitarian political stance often overlaps with narratives that favor bigger government and a wider welfare state.²⁰ In this narrative, the government secures citizens’ welfare, reducing inequality, providing public goods and social insurance, and actively intervening in the economy to manage demand, cushion risks, and ensure equal opportunities. Policies favor universal public services, including healthcare and education, strong labor protections, and progressive taxation that aims to redistribute fiscal burdens toward higher-income earners and larger firms.

Ultimately, which fiscal policies get adopted will be the result of the interplay of different actors, institutions, and groups representing a plurality of ideologies, ideas, and narratives—and the power dynamics among them. All these aspects need to be unpacked to open the black box of fiscal politics: Which actors participate and exercise power, what interests and ideas they pursue, and the processes within which fiscal policy decisionmaking takes place. We turn to that next.

3. Opening the black box of fiscal politics: A set of questions to guide future research

We argue that the concept of fiscal politics, particularly through the lens of gender equality, is under-researched—despite being widely acknowledged as a key factor influencing policymaking.²¹ Unpacking it would address two overarching questions that motivate this research agenda. First, what are the specific elements of fiscal politics that allow for reforms to be adopted and succeed in a given context? This question can motivate both country analysis and cross-country comparisons. Second, what are the specific obstacles to adopting equitable fiscal policies, and, in turn, what are the options to overcome them? We suggest three key issues for future research to address related broadly to actors, political stances, and processes—that address those overarching questions by exploring how revenue and spending decisions are made. They are discussed below and summarized in Box 1.

Before delving into the three issues, however, we situate our proposed research agenda in the broader literature. There is no one standard framework for fiscal politics, but rather relevant elements that can be drawn from economics, political science, and public financial management (PFM) that are concerned with the political aspects of policy reform and economic development.²² These literatures highlight that, to understand why reform happens or succeeds in one context and not in others, one needs to consider the role of politics, institutions, elites and other powerful groups, as well as their interests and ideologies. For example, the new institutional economics school of thought places particular emphasis on formal institutions, their characteristics, and their historical origins.²³ In contrast, the political settlements framework considers formal institutions alongside powerful groups and interrogates relative power and power dynamics across formal and informal structures.²⁴ Inglehart and Welzel develop maps of political culture and values, relevant for fiscal politics.²⁵ The field of sociology contains a large literature on fiscal policy in welfare states.²⁶ The tradition of political economics aims to understand how governments take policy decisions from a theoretical perspective, linking policymaking to electoral processes and the political cycle.²⁷ In contrast, the PFM literature typically takes a more technocratic and process-focused approach to questions around spending decisions and delivery, including gender responsive budgeting.²⁸ In this literature, transparent and robust processes are sometimes framed as a way to manage the disruptive role of politics.²⁹ Other relevant frameworks include political economy analysis that has been used to understand the effectiveness of the development process in lower-income countries,³⁰ or the powercube framework that proposes an analysis of power focusing on level, spaces, and form.³¹ This brief overview of relevant strands of work does not aim to be comprehensive, and a full review of available frameworks is beyond the scope of this paper.

The examples above illustrate that different parts of the literature offer useful insight and guidance for the study of fiscal politics generally, although none of these literatures addresses the role of gender equality. A roadmap for future research on fiscal politics should address three interrelated sets of questions about: 1) actors and power relations; 2) political stances and their motivations; and 3) transparent and effective processes. The interrelations of these elements define how revenue and spending decisions are made and, in turn, their implications for gender equality—thus helping to address our two overarching questions on equitable reform adoption and key obstacles to it. The questions we identify below aim to provide a broad agenda for future research that might be relevant across countries, although it would need to be adapted to specific contexts. For example, we expect questions around competing narratives, interests, and dissent to be less relevant in autocratic regimes that narrow the space for voicing many perspectives. The full set of questions we describe below applies best in contexts where there is space for many voices and narratives to coexist and compete.

Mapping key actors and interrogating power relations through a gender lens

The first set of issues is largely related to the “who” of fiscal politics. Although technocratic, mapping key actors is an essential first step before analyzing more complex political questions. Typically, the PFM literature maps key actors as the relevant institutions involved in the budget process, like the parliament, the ministry of finance, line ministries, the executive, and the revenue administration.³² However, the political settlements literature highlights how powerful groups and formal institutions don’t necessarily overlap, and their respective dynamics are not always in sync—political change can happen even without changes in formal institutions.³³ This makes it essential to map other actors and groups that are key to fiscal outcomes but typically receive much less attention in research. For example, civil society organizations (e.g., residents’ or professional associations) that represent and channel citizens’ views on fiscal decisions can be essential voices for fair and transparent decisionmaking, while powerful interest groups, corporations, and wealthy elites may shape fiscal decisionmaking behind the scenes through lobbying or other channels and spaces for influence. Other actors that are often under-researched include the media, auditors general, and other oversight bodies such as courts.³⁴ Which actors influence fiscal decisions, and how, affects not only the outcomes of fiscal policy but also transparency and accountability in the budget process and in broader fiscal planning, which we discuss below.

The map of key actors should then be interrogated through a gender lens, recognizing that there are many individuals within key institutions and groups, and that power relations and dynamics are affected by underlying gender norms. Some studies have approached this issue through questions around women’s representation in key decisionmaking bodies or implementing agencies.³⁵ While important, this literature risks falling back on an essentialist assumption that the presence of more women translates into decisions or actions that are better for gender equality—or equity more generally. Some evidence exists that women generally tend to be more aware of gender equality issues,³⁶ but the central questions need to scratch below the surface of representation. For instance, they can interrogate which women participate in decisionmaking processes and whether they are effectively able to take part in and shape key decisions. Do the structures of and power relations within key institutions allow for men and women to challenge and expand existing narratives and ways of thinking about the role of fiscal policy to address gender inequalities, or do they reinforce traditional norms? The answer to these questions requires investigating women’s power—whether, how, and where it can be exercised—and their ideologies, allies, and coalitions. It also requires interrogating the intersection of gender with ethnicity, class, and religion, among others.

Against this background, new research would explore women’s experience in positions of leadership, whether there is a critical mass in higher-level government roles and how that affects power relations, whether there are additional barriers or vulnerabilities in relation to women’s promotions and job security, who are the key allies among other groups, and what coalitions exist or can be built both within and across institutions. This analysis would allow researchers and practitioners to identify key constraints to progress and to consider options to overcome them. For example, lack of representation and effective opportunities for voice and influence might be addressed through fair promotion processes and effective support structures that intentionally aim to minimize and mitigate child penalties; solid anti-discrimination policies and robust mechanisms for enforcing them; as well as women’s caucuses and mentorship programs. However, deeper changes in power relations need to address underlying norms that affect girls’ educational and reproductive choices and require broader coalitions with outside allies in parliaments and civil society organizations pressing for fiscal equity.

Surfacing political stances and their motivations within and across key actors

The second set of issues is broadly related to the “what” of fiscal politics (political stances, narratives, ideologies) and interrogates the reasons (“why”) behind political stances (incentives, motivations, and interests). Institutions and groups are a collection of individuals that interact in complex ways, so that a plurality of narratives, ideologies, incentives, and interests can coexist within them and overlap across them. It is therefore essential to ask questions about what ideas shape contrasting fiscal stances, where they come from, and, in turn, how they affect key institutions and groups involved in taking fiscal decisions. As noted earlier, there is an emerging stance of gender equality backlash that risks eroding or slowing recent progress. It is therefore especially relevant at this time to address the knowledge gap about fiscal politics in relation to gender equality.

New research would start by surfacing and dissecting the main narratives and ideologies that coexist and compete in a given context, and unpacking their key motivations and outcomes of interest, as well as the desired policies associated with each. Following the stylized example of Section 2, a traditional narrative would primarily be motivated by maintaining a role of women in society centered around reproduction and care—as opposed to a male-breadwinner role. Key outcomes of interest would therefore be, for example, the preservation of the traditional family as a key unit in society. Policies associated with this narrative would enable this role to persist (e.g., pro-natalist incentives) or prevent perceived challenges to the desired model (e.g., same-sex marriage). In contrast, an egalitarian narrative would primarily be motivated by equality between men and women. The desired outcome would be equal opportunities across groups in relation to participation in the economy (e.g., entrepreneurship or labor force) and in family and societal decisions around the distribution of care work and resources. In practice, (co-)existing narratives deviate from these stylized examples and are typically deeply connected to the specific social and economic context—making case studies particularly useful to fill the knowledge gap at the country level.

Existing narratives and ideologies would then need to be overlaid on the actors map to investigate political stances within key decisionmaking institutions and powerful groups, and uncover the specific interests and motivations that shape them (which might be linked to ideology, or be more utilitarian and focused on resources or rents), as well as the incentives, which might work both at the individual (e.g., promotion, career progression) or institutional level (e.g. performance, evaluation).

Unpacking these questions would allow the identification of key obstacles or entry points for reform that aim to progress gender equality—and equity more generally. Unpacking political stances and their motivations can help find landing zones where agreement—and progress—is possible despite competing ideologies and narratives. For example, in many high-income economies, the decline in fertility is a major concern, not in relation to traditional gender roles related to reproduction, but because it presents a major risk to the sustainability of the pension system, given the aging of countries’ populations. In this example, focusing on the shared objective of increasing fertility to the replacement rate may be an entry point for dialogue on which policies are most effective in overcoming constraints to reproductive decisions. Progress on gender equality might therefore be possible, for example, through policies that minimize “child penalties” through shared parental leave, the expansion of childcare services, and policies that encourage men to take on more unpaid work and care for dependents—not just “baby bonuses” and other pro-natalist incentives that fail to address the underlying constraints.

Finally, it is important to investigate the channels through which political stances ultimately influence decisionmaking and what coalitions can exist based on related stances and ideas. New research could unpack the conditions that determine whether and how media, religious groups, civil society and women’s organizations, professional associations, as well as powerful individuals and groups successfully reinforce or oppose a specific stance. Unpacking specific channels and strategies of influence has the potential to provide context-specific guidance to, for example, civil society organizations or advocates for gender equality on possible entry points to influence policy or to researchers on evidence gaps that may help shift narratives toward those that are more focused on equitable outcomes. Importantly, these influences might be most effective when they come through broader coalitions for change that might cut across groups interested, for example, in tax justice, distributional equity, and just environmental transitions.

Building transparent and effective processes for accountable decisionmaking

The third set of issues addresses the “how” of fiscal politics. It takes a more practical angle to investigate whether effective, transparent and resilient processes are in place for diverse actors and stances to be effectively represented in decisionmaking. As highlighted by recent studies,³⁷ such investigations must go beyond the pure existence of processes, for example, for participation and consultation, and interrogate their effectiveness to provide a channel for voice and accountability. There is still limited knowledge on how competing interests, motivations and incentives (as discussed above) shape formal processes, and even more limited research on the informal processes and norms that influence fiscal decisions, including in relation to gender equality.

New research would start by mapping formal decisionmaking processes on fiscal policy and investigating how fair, participative, and transparent they are. For example, what information is made publicly available through consultations and key debates leading up to decisionmaking? Does the timing and format of information release allow for meaningful oversight, accountability, and citizen engagement? What spaces are available for consultation and participation so that a diversity of actors can provide inputs into decisionmaking processes? And are these spaces and mechanisms effectively used by key stakeholders? Research could uncover obstacles that prevent diverse actors from participating, for example, related to knowledge of technical aspects of budgeting and fiscal decisions.³⁸ In this example, identifying knowledge as a specific obstacle would unlock the possibility of designing measures to overcome it, such as the provision of expert advice, training, or knowledge sharing through professional networks. These issues are, of course, related to underlying structural inequalities and norms, for example, in relation to gender gaps in technical subjects such as accounting and economics, in both low- and high-income economies.³⁹

These questions need to be complemented and expanded to interrogate whether processes work toward the desired outcomes of transparency, inclusiveness, and accountability. For example, what safeguards are in place to make sure a plurality of perspectives is heard? The rise in cyberviolence and violence against women, especially in authoritarian regimes, closes space for their voices to be heard and can narrow existing processes and spaces for consultation and participation. Finally, what formal accountability mechanisms exist to ensure that implementation follows through, and are fair and effective? Answering these questions in a way that is embedded in the country context would allow for specific recommendations on improvements in formal processes, as well as useful insights that might be helpful across countries.

Importantly, decisionmaking processes can support gender equality most effectively when they take a holistic approach to tax and expenditure, as opposed to fragmenting them. For example, in Grown and Mascagni (2024), we argued that making tax systems work toward gender equality requires embedding them firmly into a broader agenda of feminist fiscal policy. The gender budgeting literature has worked in this direction by arguing that gender equality approaches must be streamlined into the budget process, which should include meaningful participation and advocacy opportunities.⁴⁰ Future research can ask whether current processes and influencing spaces allow for a holistic debate on tax and expenditure. For instance, if building support for progressive tax reforms requires advocates to link taxes to expenditure, which kinds of expenditure are likely to lead to broader support? And what happens to these kinds of arguments over time if the “earmarked” revenue does not lead to enhanced services or outcomes?

In addition to formal processes, future research should investigate more explicitly the informal spaces and rules of decisionmaking, which often coexist alongside formal ones and can be both influential and exclusive.⁴¹ For example, it is important to interrogate who takes part in informal influencing spaces (institutions and groups), what perspectives are represented (stances, narratives, ideologies), and how informal rules emerge and change over time. If existing rules and spaces reproduce specific groups or ideologies, then research could investigate spaces where alternative perspectives can be expressed—and what are the points of connection (existing or potential) across them. Understanding these informal processes and rules better would allow for more targeted approaches that intentionally encourage diverse actors and perspectives to be represented in existing decisionmaking spaces and boost alternative ones to develop options for reform, foster coalitions, and coordinate influencing efforts.

4. Conclusions

This chapter is motivated by a concern that progress in gender equality achieved over the past decades is at risk of being slowed down, or even reversed in many countries, in the context of gender equality backlash. Research shows there are technical roadmaps for fiscal reforms that work toward gender equality, which intersects deeply with other forms of inequality. These reforms have also been shown to be beneficial to broader macroeconomic outcomes, such as growth, jobs, and fiscal sustainability. A key determinant to explain whether these policies are implemented is fiscal politics. We illustrate how competing ideologies in relation to gender roles translate into different fiscal policies that have different implications for gender equality. Building on various strands of relevant literature looking into the politics of reform and development, we propose a research agenda to guide future work on fiscal politics as the key missing link between fiscal policy and gender equality. Advancing this agenda is essential to identify constraints to, and entry points for, progress toward gender equality—and equity more generally across a wider set of groups in society.