The other resource curse: Oil and women’s rights

Why has the Middle East lagged behind the rest of the world in women’s rights and political participation? The strictures of Islam receive a fair share of the blame. Michael Ross of UCLA tells us otherwise. The real reason, he argues, is oil.

Michael spoke today at Yale about a new paper of his in the American Political Science Review. He argues that women’s participation in the formal labor force is a driving force in the development of women’s rights and participation. Oil production tends to crowd out local manufacturing, and so oil crowds out job opportunities for women. That is, the discovery of oil in a less developed country, he argues, sideswipes the development of women’s rights. The discovery of oil might even set back previous gains.

It gets more interesting. If you ignore oil, Islam tends to be associated (statistically) with poor women’s rights. After accounting for oil, that Islam-women’s rights correlation goes away. Variation in oil production seems to explain much of the variation in women’s rights within the Middle East, as well as between the Middle East and the rest of the world.

A number of cases inside and outside the Middle East support Michael’s hypothesis—he documents, for instance, how manufacturing and women’s participation in Nigeria waned as oil wealth grew. He has a nice contrast of oil-rich Algeria to Morocco and Tunisia.

I don’t think Michael’s analysis is ironclad (nor, I think, does Michael). One must always be cautious with cross-country statistical correlations, and case evidence does not always yield systematic patterns that are true outside the case. But Michael’s logic resonates, and the combination of statistical and case evidence is persuasive.

I think a next step would be to investigate his claim further using within-country sector-level data on output and employment, to see if growth in the formal sector is really associated with the growth in women’s employment, and in turn to women’s rights and participation. It would be ideal if we could identify exogenous changes in employment opportunities for women, and the consequent changes in women’s status in those areas. Perhaps variation in the reach of the Africa Growth and Opportunity Act (AGOA) can provide such variation?

It could also be important to get experimental evidence on the link between women’s employment and their rights and collective action (as I am attempting, with some colleagues, in northern Uganda). The Nike Foundation is also embarking on a number of women’s formal sector employment initiatives. That would be an interesting exercise to assess.

If Michael is right, programs to promote women’s employment, especially in the formal manufacturing sector, might be the key to improving their rights. Put crudely: sweatshops may be empowering.

This is a controversial but plausible finding. I often feel that those who decry low-wage manufacturing have a rosy view of the alternatives available to the average developing country woman. Of course, economists often have a rosy view of life in a factory (and possibly overestimate the negative consequences of improving workers rights).

These are questions awaiting some hard evidence.

Short story: programs seeking to increase worker wages and rights in the developing world (an important cause) may have need to strike a careful balance between rights and wages for a few now, versus rights and wages for many later. This is yet another example of the conundrums that makes the process of development so complex, difficult, and ethically vexing.