Strategies for the Future

If the benefits from investing in girls and women are so great and can be quantified. why do households and employers underinvest in women? The main reason is that. as discussed above. markets fail to capture the full benefit to society of' investing in women and girls. Where the market fails or is absent. government must take the lead Public policy can contribute directly and indirectly. to reducing gender inequalities by, for example:

• Modifying the legal and regulatory framework to ensure a opportunities

• Ensuring macroeconomic stability and improving, microeconomic incentives

• Redirecting public policies and public expenditures to those investments with the highest social returns

• Adopting targeted interventions that correct for gender inequalities at the micro-level.

Modifying the law to eliminate gender discrimination and equalize opportunities for women and men is an important first step. However. legal reform by itself does not ensure equal treatment. Further public action is required to make sure that gender-neutral laws are enforced at the national and local levels.

Sound economic policies and well-functioning markets are essential for growth, employment generation, and the creation of an environment in which the returns to divesting in women and owls can he fully realized. Economic instability and price distortions can hinder the process. Consequently. sound macroeconomic management is critical. In general. two sets of policies are necessary: one emphasizing macroeconomic stability and the elimination of price distortions. the other focusing on labor-demanding growth and a reorientation in public spending toward basic services with high social returns- such as education. health care and water supply.

Gender inequalities in the distribution of the benefits of public spending frequently arise because of a bias within households that limits women's access to publicly provided services. In addition, the services provided by public spending often are of less benefit to women than to men. Public policy can help remedy this problem by rearranging expenditure priorities among sectors and within the social sectors. It can ensure support for those services and types of infrastructure that offer the highest social returns to public spending and that are most heavily used by women and children. such as water supply anti sanitation services and rural electrification.

Finally general policy interventions may not be enough. and programs that specifically target women and girls may be required. Targeting is justified. Governments can no longer afford not to invest in women gable on two grounds. First. because women are disproportionately represented among the poor. targeting women can be an effective strategy for reducing poverty (broadly defined to include limited access to services. re sources, and other capability-enhancing factors). Second. where gender differences are wide, targeting-for example. the provision of stipends so that girls can attend school-they be needed to capture social gains and increase internal efficiency