the areas that matter most to inclusive growth in general and the broader economic reform agenda. The employability analysis in the IG framework looks at factors important for investments in education and health, cultural and social norm, and other barriers, including discriminatory business environment.<sup>15</sup> It also allows for the integration of multi-dimensional objectives – those of lifting bottlenecks to productive employment of different lagging groups (e.g. the poor and vulnerable), but also importantly women—as a socially desirable and economically efficient way to dealing with economic exclusion.<sup>16</sup> Women in different segments of the population may face different obstacles. Poor women, for instance, may face mostly employability issues because of lack of education, poor health or no access to safe transport to work. A leadership deficit may be the real impediment to economic participation of the more educated and skilled female economic participants. As in HRV (2006) the business analysis of binding constraints to economic growth in the IG framework can be traced to government or market failures and distortions in credit markets. The IG framework’s strength is that it allows us to consider both supply-side and demand-side constraints to productive employment in the near term and in the longer run. However, since it has explicit focus on identifying the binding constraints to informal and small and medium sized enterprises, it is unclear whether the removal of these distortions will be as welfare enhancing as those that focus on the whole enterprise sector in an economy. This will be the case only if the distortions affecting SMEs and micro firms are the most-binding constraints to growth in general.

Our gender-enhanced approach examines the gender gaps within the framework of prioritized constraints to economic growth. The gaps analysis tells us what the state of play is with respect to genderrelated distortions, τG, while the binding constraints-to-growth analysis gives us the distortions with the largest λY and how important that finding is with respect to raising national welfare. So far we have argued that a unitary reliance on either of these two very valid approaches will yield weaker results than a combined strategy. If closing the largest gender gap τG is not crucial to lifting a major constraint to growth (with large λY), governments would pay little attention to closing this gap. A focus on addressing the most binding constraints to growth will be welfare-enhancing on average for both men and women, but large genderrelated distortions will reduce or in some cases reverse the direct benefits of the growth interventions.

We are therefore interested in the binding constraint to growth (constraints with the largest λY) that when removed will also reduce the gender-based impediments (i.e. d[μGs (τ) −μGp(τ)]/dτY > 0 so they have positive secondary interaction terms). In other words, we are concerned with gender-related distortions τG that are not necessarily the largest but are binding constraints to growth and therefore are associated with large multipliers, λG (in this case G≡Y). We are also interested in gender-related distortions that may not be

> 15 Social and cultural norms play an important role in some parts of the world, as shown in a recent report for the case of Jordan (World Bank, forthcoming).

> 16  This is very much in the spirit of the path-breaking study by Lewis and Lockheed (2007) that showed that three-quarters of women and girls not in school came from minority or disenfranchised groups.

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