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