Women Policymakers Work Best for Financial Integrity

Source: Debbie Peterson/heyjasperai

March is Women's History Month, and World International Women's Day is March 8. It’s time again to consider whether the number of women in leadership roles in industry and government is edging any closer to the 50 percent mark.

Although the most important reason for evaluating gender statistics is to provide women with equal opportunity and treatment, other motivators studied by psychologists may fast-track gender equity. One such motivator is the reduction of corruption.

Research on women and corruption

The American Accounting Association (2012) reports that the presence of women on boards is twice as likely than other tried-and-true measures to increase financial integrity.

Social psychologist Gerard Hendrik Hofstede’s Power Distance Index was one of the control measures used to consider economic, cultural, and institutional dimensions from a global perspective in a comprehensive peer-reviewed study by Chandan Jha of Le Moyne College and Sudipta Sarangi of Virginia Tech, “Women & Corruption: What positions must they hold to make a difference?” (2018).

The authors examined information on the roles of women in parliamentary posts in 125 countries, as well as within the labor force, including clerical, managerial, and CEO positions. Their work shows a strong relationship between lower corruption and women in leadership roles. The relationship is strongest in countries where women enjoy greater equality of status and where a greater share of parliamentarians are women.

Corruption is lowered when the number of women in office increases, regardless of the percentage of women in office. This relationship held true in a regional analysis of 17 European countries. The authors say this indicates that the beneficial effect of women in leadership roles is unlikely to vanish as women gain more equal status with men.

Defining corruption as public power exercised for private gain, the researchers used the World Bank Control of Corruption Index (CCI) to capture the extent to which public power is exercised for private gain when the number of women in leadership positions increases. The study finds that in Europe, there is even a reduction in corruption at the local level when women are elected. The likelihood of having to bribe to get government service is lower in regions with a greater representation of women in local-level politics.

Overall, the researchers found strong evidence that women’s presence in government has a direct causal and negative impact on corruption but found no significant relationship between corruption levels and the role of women in the general labor force. This finding confirms earlier studies that found that it is policymaking through which women are able to impact corruption.

According to Sarangi, “This research underscores the importance of women's empowerment, their presence in leadership roles, and their representation in government. The research suggests that women can have an impact on corruption through policymaking roles.”