The Economics (and Politics) of Gender Quotas

Gender issues in the workplace are currently a hot topic. First, we had the furore about male and female pay at the BBC. Next, the notorious memo from a Google employee which alleged that women are less biologically suited to be software engineers than men.

A paper in the latest American Economic Review (AER) provides an intriguing perspective on the issue.  Tim Besley of the LSE and two Swedish colleagues carried out a very detailed empirical analysis of elections in Sweden over a 20-year period.  The title effectively summarises their work: Gender Quotas and the Crisis of the Mediocre Man.

To publish in the AER you have to have a theoretical model.  This might have been developed with Jeremy Corbyn and his Shadow Cabinet team in mind.  To quote the authors “the model predicts that less competent leaders pick less competent followers”.  A leader who promised he would deal with outstanding student debt without realising this would cost £100 billion feels at home with colleagues who are, if anything, even less numerate.

Competence is measured in a neat way from detailed micro data on factors such as an individual’s occupation, education, location and so on across the wider population.  It is strongly correlated with the cognitive scores and leadership qualities assessed in the Swedish military draft.

In 1993, the Social Democratic Party introduced a gender quota for their candidates, who are elected on a list system.  Men and women had to alternate on the list. Despite Sweden’s reputation of equality, in 1991 men were in first place on the list, and hence almost certain to be elected, in 82 per cent of the elections.  Such quotas are of course a sensitive issue, even within the British Labour Party in its more traditional areas. 

Besley and his colleagues come to a conclusion which is as strong empirically as it is perhaps surprising.  They find that the introduction of gender quotas drove out substantial numbers of mediocre male politicians.  Not only that.  In the areas where female representation was increased the most by the quota, the competence of the men who were elected also rose decisively.

The findings, they claim, have a relevance which goes beyond politics.   For example, the chairman or chief executive usually have an important influence on the selection of board members.  One of the motivations for incompetent leaders picking low quality candidates is that they feel less threatened by them.  This creates a vicious circle of mediocrity.

The analysis also finds that the higher the competence of its leaders, the more likely a party was to win an election.  Instead of trying to portray Corbyn as an extremist, perhaps the Tories should just point out that he is dim and useless.

Of course, it is a leap of faith to go from a study of Swedish elections to FTSE boards or British election strategy.  But the paper certainly gives food for thought.

It is yet another example of increased competition leading to an improvement in product quality, in this case the competence of politicians.