The Gender Credibility Gap: All-Male Boards and Substantive Gender Representation in Central Banking

Why do some countries appoint women to central bank boards and others not? Women held only 11% of seats on global central bank boards between 2000 and 2015, with much smaller representation in years prior and even lagging behind the meager 16 % world-wide average percent of women in national cabinets. We argue that the dearth of female central bankers stems from gender’s impact on central bankers’ ability to signal commitments to price stability. Governments that are concerned with inflation often seek central bankers that exude anti-inflationary bona fides. We argue that this trait is often heuristically informed by gender, such that women are especially under-represented where the need for individual bankers to project monetary conservatism is large. We hypothesize that the need is greatest and female central bankers scarcest in countries with histories of inflation, and with independent central banks and flexible exchange rates, both of which highlight central banker’s personal reputation for monetary stability. We test our theories using a new dataset on the gender composition of central bank boards in 114 countries for years 1998-2015 and find support for our theory. Notably, that support is strongest in the context of long-term trends rather than year-to-year changes. That is consistent with work on the long run political effects of memories of inflation and hyperinflation.