Institutional economics is a branch of economics emphasising the study of institutions and their impact on economic behaviour and performance[1]. This school of thought, developed in 1918 by Walton H. Hamilton, views markets as a result of the complex interaction between various institutions, including individuals, firms, states, and social norms. Institutions are defined as the humanly devised constraints that structure human interaction within the context of an economy[2].
Although this study area originated and flourished in the United States in the early 20th century, it has become relevant in every economic context today. Moreover, much interest has developed in this branch of economics as a whole and its various role players. In recent decades, much attention has been given to women's role in various aspects of society: the economy, health, education, politics, and many others. This article will focus on the role that women play in institutional economics, more precisely on the role that women have played and continue to play in economic and political institutions.
International Women's Day is commemorated annually on 8 March to acknowledge the contribution of women in social, economic, cultural and political milestones and progress. In South Africa, the day is commemorated annually on 9 August as a tribute to the thousands of women who marched to the Union Buildings on 9 August 1956 to protest the extension of the Pass Laws to women by the then apartheid government[3]. Although the abolition of the pass laws only came into effect in 1986, the protest by the women three decades prior played a significant role in highlighting the negative impact that the pass laws had on the economic participation of black South Africans. The women's plight was that the proposed implementation of the pass laws for women would significantly impact their ability to move with ease from one area to another in search of employment opportunities for the sustenance of their livelihoods and that of their families, which had been the case with their male counterparts who had been carrying the passes since the late 1970s.
Until today, women continue to play a pivotal role in political institutions in various ways, including raising their voices in advocacy and occupying key leadership positions. From the era of Margaret Thatcher to the present era of Malala Yousafzai, a myriad of women have actively and consistently played a pivotal role in shaping political institutions. Margaret Thatcher was the first female Prime Minister in the United Kingdom. The economy was deregulated during her premiership, and the privatisation of key state institutions and entrepreneurship were promoted. Despite having inherited some of the worst economic statistics of postwar Britain, Thatcher's monetarist and deflationary policies saw a significant turnaround in the economy, such as significant cuts in inflation, which was over twenty percent, unemployment which was in excess of 1.5 million for the first time since the 1930s, and public sector borrowing which was brought down from around five per cent to around half of this figure towards the end of her term in office[4]. Although her tenure at the helm of political leadership in the United Kingdom was not without drawbacks, Thatcher won three successive general elections and served as Great Britain's prime minister for more than eleven years (1979-90), a record unmatched since then[5].
Linked to one's ability to effectively participate in the economy is one's access to education. This is the cause pursued by women like Malala Yousafzai, a Pakistani-born human rights advocate for educating women and children. Yousafzai became an international symbol of the fight for female children's education after she was shot in 2012 for opposing Taliban restrictions on female education in her home country of Pakistan[6]. Her activism work saw her receiving the Nobel Peace Prize in 2014, befitting, as equitable access to quality education is not merely a cause for activism, but it is Goal 4 of the 17 Sustainable Development Goals Vision 2030 by the United Nations (UN). Moreover, Goal 4 is an enabler for the other 16 Sustainable Development Goals. The UN argues that accelerating progress towards SDG 4 should be prioritised as it will have a catalytic impact on achieving the overall 2030 Agenda. Education is vital in that it raises productivity and creativity and stimulates entrepreneurship and technological breakthroughs. All of these factors lead to greater output and economic growth[7]. At the individual level, education can improve people's employability, earnings, and health outcomes. Countries that have invested heavily in primary, secondary, and tertiary education have been able to contribute to advances in science and knowledge and create new products and technologies. Globally, investments in education underpin social cohesion, economic growth, competitiveness, and innovation[8].
As we commemorate Women's Day annually in South Africa on 9 August, the purpose of this article is to remind us of the role that female political and economic actors have played and continue to play in advancing political and economic institutions. However, their role is not limited to these two. Moreover, female actors are not the only vital role players in advancing institutions, as institutional economics, by definition, is the study of the complex interaction between various institutions, including individuals, firms, states, and social norms. Institutions are defined as the humanly devised constraints that structure human interaction within the context of an economy.
[1] Britannica, T. Editors of Encyclopedia (2016, June 14). institutional economics. Encyclopedia Britannica. https://www.britannica.com/money/institutional-economics
[2] North, Douglass C. 1991. "Institutions." Journal of Economic Perspectives, 5 (1): 97–112.
DOI: 10.1257/jep.5.1.97
[3] South African Government Official Information Services, 2024
[4] (Iowa State University of Science and Technology, 2024)
[5] (Iowa State University of Science and Technology, 2024)
[6] (United Nations, 2017)
[7] Department of Economic and Social Affairs Sustainable Development, 2024
[8] Report by Daniel F. Runde, Romina Bandura, and Madeleine McLean. Published December 20, 2023
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