Commentary 13th Feb 2015

Overcoming barriers to female leadership

Women play an important role in generating sustainable economic development, but their representation in political leadership is limited. 

This is particularly true in most developing countries, including India.

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In recent years, the Indian government has taken a number of steps to redress this injustice, with the 73rd Amendment to the Constitution of India reserving one-third of all village council positions , including those of the village head (locally called the mukhiya or the sarpanch) for women. In many states in India, this proportion has been increased to half. Which village council would have a female head was randomly determined in each village council election.

Extensive research in economics and other fields shows that female village heads or females in positions of power can increase girls' aspirations and educational attainment, improve distribution of public services such as water and sanitation, and decrease reported crimes against women. However, these positive effects take time to happen, because often women become village heads with less governance experience than men and good governance takes time to learn. Also, social norms might not support the appointment of women to positions of power, leading to a backlash from men.

How do women in leadership deal with this situation? Do female leaders behave differently from men in similar situations? Specifically, are women leaders more deceptive than male leaders? These are important questions because deception can lead to a breakdown in cooperative relationships that are the cornerstone of economic development. Additionally, greater deception by women may reinforce gender-based discrimination and threaten women leaders' ability to govern.

To see how women behave as leaders, we conducted a field experiment in 40 villages located in three rural districts of Bihar, a state in the northern part of India: 955 men and women from a wide range of socioeconomic backgrounds participated in the experiment.

Within each village, participants were randomly allocated into a group consisting of two men and two women. Each participant received an initial "endowment" of 200 rupees and decided how much of this endowment to contribute to a group account, with the amount remaining to be allocated to a private account. Participants earned one rupee for themselves for each rupee placed in the private account. Contributions to the group account by the group members were aggregated, doubled and then divided equally among all group members.

However, just before group members made their contributions, a leader was randomly selected from each group, with men leading half the groups, and women the other half. The leader proposed a non-binding contribution (they were free to change the amount later) of up to 200 rupees towards the group account. This proposed contribution was revealed to the other group members (called citizens). Then all members, including the leader, simultaneously decided on their actual contribution to the group account.

We defined leaders as deceptive if their actual contribution towards the group account was less than what they themselves proposed. Since the proposed contribution by the leader was non-binding, akin to cheap talk, standard economic theory suggests that the proposal stage should have no impact on citizens' contribution decisions. Leaders also know that group members may not follow their proposal, and therefore have little incentive to follow it as well. Recent evidence however suggests that leaders' suggestions, even when non-binding, effectively result in higher contributions from citizens. Anticipating this, income maximising leaders contribute less than what they propose.

We found that women leaders contributed less than what they propose – deceiving in 56 per cent of cases compared to 43 per cent for men. Our experimental methodology ensures that these results are not driven by differences in characteristics or experiences.

So is this behaviour driven by the environment in which the field experiment was conducted? To investigate this, we examined the impact of perceptions or exposure to femalevillage headson behaviour in the experiment. Some of the villages where we conducted the experimental sessions had experience with a female village head in the last three village council elections while others had not. We found that women were deceptive more often in villages with a female headin the past but not otherwise. In other words, women who had experienced a female head showed a tendency to appropriate resources when acting as a leader in our experimental setting.

 One possible explanation for these findings is that female leaders expect to be treated poorly, which leads to a self-fulfilling prophecy where female leaders behave negatively

Department of Economics

Monash Business School

Our results suggest that simply mandating female leadership might not necessarily lead to better outcomes for villagers or women. But why?

One possible explanation for these findings is that female leaders expect to be treated poorly, which leads to a self-fulfilling prophecy where female leaders behave negatively. Another explanation is that women act myopically and make one-off decisions because they do not expect to be re-elected. Indeed, a Government of India survey in 2008 found that 89 per cent of female village heads did not contest a second election and those who did lost. The erstwhile village heads reported that while in the first instance, spouses and other influential people in the village encouraged them to contest the election, the same relatives and spouses later discouraged them from re-contesting. In contrast, men with greater experience of leadership may take a more long-term view, and seek to build and sustain a norm of good governance.

Improving the effectiveness of female leaders is paramount for economic growth. Placing women in leadership positions through gender quotas is, however, only the first step to ensuring that women are equally represented and have the opportunity to improve the quality of governance. These results might not be unique to the setting where the experiments were conducted. Indeed CEOs in private sector organizations in developed countries (including Australia) express skepticism about the effectiveness of gender based quotas. Some of the reasons they cite are that such quotas are ineffective and non-meritocratic. Similarly gender quotas on board member positions in Norway did not affect corporate decisions in general, with the exception of employment policies. Firms affected by the female board quota undertook fewer workforce reductions, leading to lower short-term profits. This policy is also associated with an exodus of firms listed on Norway's stock exchange, down from 563 firms in 2003 to 179 in 2008.

Our research suggests that mandated quotas may not be effective by itself. Social norms also need to change in a way that women need to expect that men will cooperate with them, and that their performance as leaders will lead to their acceptance as true leaders in their field.

Professor Lata Gangadharan works in the Department of Economics at Monash University.
Associate Professor Tarun Jain works at the Indian School of Business.
Professor Pushkar Maitra works in the Department of Economics at Monash University.
Joseph Vecci is a PhD student in the Department of Economics at Monash University.

A version of this article has appeared on Ideas of India.

By Lata Gangadharan, Tarun Jain, Pushkar Maitra, Joseph Vecci

  • lata-gangadharan-pr

    Professor Lata Gangadharan

    Department of Economics Monash Business School

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  • pushkar-maitra-dp

    Professor Pushkar Maitra

    Department of Economics Monash Business School

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