The annual ANZ Institutional International Women’s Day lunch. PIC: Jason Reed.
Data is important. But even properly representative data only takes you to a point. If we are ultimately looking to shift culture and behaviour, we must win the battle of ideas. People need to feel change is right. The data are the means to this end.
We have had the data on climate change since at least the 1970s yet the Quarterly Journal of Economics, which is currently the most-cited journal in the field of economics, has never published an article on climate change.
At the same time as the economic imperative is growing, the belief imperative is hardening. Australia, like the UK, US, Philippines, Thailand and other countries, is becoming more divided.
In the last election, 25 per cent of votes for the House of Representatives were for the minor parties. Australian elections are no longer a two-horse race.
Among voters aged 18 to 34, the Greens now command more support than the Liberal party. For those 55 and over, support for the Liberal Party is nearly five times greater than support for the Greens.
From a social perspective, the battle of ideas needs to be won beyond the numbers. But from an economic perspective, where the numbers are in, we need to make very different economic decisions now.
If the broad tools of macro policy are less powerful, the detail of economic policy will matter much more. Australia is not alone in this position.
Here is a crucial question: how are we going to get better micro policy outcomes across a range of countries when our decision-makers don’t reflect the diversity of the population?
The Global Leadership Project is a dataset of biographical information on 38,000 leaders from 145 economies. The data reveal globally 81 per cent of political decision makers are male, while 92 per cent of those in the top one or two positions in each jurisdiction are male.
Central bankers are also mostly still male. Annelise Riles, a Professor of Law and Anthroplogy, questions whether “central banks are acting in everyone’s interests”.
Ultimately if we win the battle of ideas, we might also begin to close the confidence gap between men and women. At ANZ, we measure consumer confidence on a weekly basis (with Roy Morgan).
In the last six years, women’s confidence has been lower than men’s 97 per cent of the time. You would think 50/50 would change economic outcomes for the better.
This doesn’t necessarily mean we should be trying to match women’s confidence to men’s. There is plenty of evidence it’s the over confidence of men that may be out of alignment.
When it comes to investment, for instance, men tend to invest more in risky assets, trade more frequently, and hang onto losses for longer. Female investors, as a consequence, report higher returns.
A 50/50 confidence split isn’t too much to ask. But its men who seem less clear about “knowing what they don’t know”.
That’s not just an issue for investment. It’s an issue for the whole economy, and for society.
Richard Yetsenga is Chief Economist at ANZ