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This paper presents a unified framework on how various macro-level economic policies and external finance strategies can be used to increase funding for gender equality outcomes. It examines the potential of government spending and taxation, as well as monetary policies (like loan guarantees and asset-backed reserve requirements) to expand fiscal space. The importance of macroprudential policies in mitigating the reduction of fiscal space during economic downturns is also highlighted.
For developing countries, the paper emphasizes external finance as a crucial source of fiscal space, discussing policies that alleviate external debt, improve access to concessional finance, and increase special drawing rights (SDRs). The paper distinguishes between policies with a direct financial impact on gender equality investments and those with indirect effects. It underscores the role of gender-responsive benchmarks and gender markers in directing resources towards gender equality outcomes in the latter case. Similarly, it differentiates between “gender-indifferent” and “gender-informed” external finance strategies, suggesting how gender benchmarks and markers can be used to reallocate SDRs or inform debt restructuring and cancellation.
Ultimately, the paper argues for a broader understanding of fiscal space beyond traditional financial analysis focused on borrowing and debt sustainability. It proposes an alternative view that recognizes the investment nature of certain public expenditures, suggesting that fiscal space for gender equality can be created and strengthened by leveraging a wider range of policy instruments.
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