Could Women Have Saved The World?

Indonesian Trade Minister Mari Pangestu was the first woman in Indonesia to get a economics doctorate. She and other prominent financial women were asked last weekend what would be different if women ran things.

According to the New York Times' Katrin Bennhold, Pangestu claimed, with less than empirical evidence on her side, that women are "more prudent and less corrupt," so the current financial crisis would not have been as bad. Muhammad Yunus, a microfinance pioneer in Bangladesh, agreed, saying, “Women are more cautious. They wouldn’t have taken the enormous types of risks that brought the system down." The EU's competition chief Neelie Kroes proclaimed herself convinced that testosterone was what did in the world economy, stating, "In general terms, females are a bit less ego-driven and a bit more responsible than men."

Although one male participant was unwilling to be quoted on the record as claiming, "women would never have come up with all those sophisticated tools …" Harvard economist Kenneth Rogoff disagrees saying that the lack of female voices was itself part of the problem, adding bluntly, "We need more gender diversity in the finance sector."

Bennhold elaborates:

Just how little diversity there is was brought home here in Davos in a private session of finance officials, regulators and bankers on Saturday morning. Among the 80 high-profile attendees, only 6 were women – including [Ana Botin at Santander], Ms. Kroes and French Finance Minister Christine Lagarde – and all of them were sitting all in one corner of the room.

Largarde more or less agreed with Rogoff's assessment of both the finance sector and the people that regulate it:

“It illustrated two shortcomings of the past years,” said Ms. Lagarde. “One, this is a world where there is too little diversity and two there is too much herding behavior.”

That does, however, flip the stereotypes of male and female behavior on their heads: Lagarde is basically saying that the men are all sheep and women (possibly by dint of the fact that they are already sticking out from the crowds of men) are more likely to act outside the common wisdom.

But at Davos, no one argued that women should take over the financial sector. In fact, they (like many of us) are just looking for a little more equality:

Ideally, women said in several interviews here, the finance system of the future will have just as many women as men to combine the more female tendency to be responsible and forward-looking with the male tendency to take risks.

Now if we could get that equality with a side of slightly less stereotyping, that would be a perfect world.

Talking Banks And Sex [New York Times]