Family Bargaining Research Paper

2. Neoclassical Economics And Household Decision-Making

Neoclassical economists tend to explain human behavior through abstract mathematical models and econometric approaches to data analysis. They therefore place considerable value on ‘parsimony,’ or the ability to explain complex phenomena through a very limited set of variables. This is evident in early models of household decision-making which assumed it to be the responsibility of the household head, acting as ‘benevolent dictator’: ‘benevolent’ because he was assumed to take account of the welfare of all members in his decisions and a ‘dictator’ because he was able to impose his decisions on them (such models implicitly assumed a male household head, an assumption which is often but not invariably appropriate). However, while this dual assumption considerably simplified attempts to model household decision-making, it ruled out the possibility that power and conflict might have any role to play in the process (Becker 1981)

Two bodies of empirical evidence challenged this representation of household decision-making. The first showed that access to resources by individual members influenced the allocation of intrahousehold resources, suggesting that household decision-making processes were susceptible to the economic leverage exercised by different members (Thomas 1993, Hoddinott and Haddad 1995). The second documented phenomena such as domestic violence as well as systematic inequalities in household welfare along age and gender lines (Momsen and Townsend 1987), further undermining the assumption of conflict-free, welfare-maximizing, decision-making. Bargaining models of household decision-making emerged in response to such evidence. Their starting premise was that individuals cooperated to form households because the resulting benefits exceeded those obtainable from living alone. Where members had conflicting views about certain decisions, they might seek to bargain over the final outcomes. However, not all members had equal bargaining power and bargaining models largely were concerned with establishing the determinants of differentials in bargaining power within the household. These were seen to depend on the kind of ‘threats’ that different members could make in order to influence the decision-making process. The ultimate threat available was the threat of ‘exit,’ which in the context of the household, implied withdrawal from its membership.

However, the credibility of such a threat depended on the kind of resources that members were able to command as individuals rather than as household members. Initially, the ‘threat’ position was equated with access to individual economic resources, for instance, labor market earnings. It was expanded subsequently to include aspects of the social context which were likely to impinge on the threat positions of individuals as social groups. For female members, for instance, individual threat positions might be influenced by sex ratios in the relevant marriage market, laws concerning alimony/child support settlements, women’s ability to return to their natal homes after marital breakdown, and the cultural acceptability of outside work.

Quantitative tests of bargaining models supported the assumption that individual economic characteristics, such as wages and incomes, as well as broader structural factors, such as legal provision relating to divorce settlements, did influence decision-making outcomes within the household (Hoddinott and Adam 1998, McElroy 1990, Schultz 1990, Jones 1986). They confirmed the feminist argument that, by and large, male household members exercised greater bargaining power than females, a reflection of their higher earning capacity as well as gender asymmetries in the legal structure. They also confirmed anthropological findings that men used their stronger bargaining position to claim a disproportionate share of household resources for their own consumption as well as more leisure (Dwyer and Bruce 1988). They pointed to the importance of women’s access to paid employment for helping to shift the balance of decision-making power within the household. However, the insights provided by economic models have been limited by their focus on the economic determinants of bargaining power and their failure to consider its social dimensions. Yet it could be argued that it is its social dimensions which most help to distinguish the process of bargaining within the family from bargaining in any other arena of social life.

3. Institutional Approaches And Family Bargaining

Institutional approaches to household bargaining refer to attempts by nonneoclassical economists, sociologists, and anthropologists to account for the specificities of the household as an institutional form. These see households as an institutional response to the human need for long-term stable environments in which to bear and bring up children, to care, and be cared for, through sickness, disability, and old age and to plan for the future in a world characterized by uncertainty. What gives the household its institutional advantage in achieving these goals is the close inter-twining of emotions and interests that characterize its relationships. Despite the different forms households take in different parts of the world, its relationships are generally familial. Its members are related by blood or marriage, they have lived together over considerable periods of time, they care for each other, and in any case, trust each other more than they trust strangers.

However, cooperative behavior within the household is not left entirely to the spontaneous impulse of members. It is also underwritten by a series of ‘implicit contracts’ that spell out the claims and obligations of different members to each other. Given the importance of the activities carried out within the family to the reproduction of social life in the wider society, these contracts typically embody social norms and beliefs about the meaning of the family in different cultural contexts. And given the importance of gender relationships in the key activities of the family, contracts between women and men within the family typically embody social norms and beliefs about gender differences in the wider society.

As long as household members have more to gain from their membership of the household than from going it alone, they have an incentive to abide by the terms of intrahousehold contracts, including its rules about decision-making. However, when these gains are less certain, how household members respond, whether or how they seek to achieve more favorable outcomes, will depend on what they are stand to gain from such action compared with what they stand to lose. Institutional approaches to cooperation and conflict within the household differ from neoclassical approaches in two important ways. First of all, they explain the rationale for cooperation within the family in affective and contractual terms rather than purely instrumentalist ones. Household members do not make decisions and seek to bargain as unrelated individuals, differentiated only by their resource endowments, but as members of families, with ascribed roles and responsibilities. Familial connections also mean that what individual members value about their membership of particular households, and hence what they stand to lose, cannot be captured by a materialist calculus alone. Nelson (1996), for instance, suggests that along with concerns with material well-being, household members will also seek to balance their need for ‘affiliation,’ the need to love and belong, with the value they attach to ‘agency,’ the capacity to define and act in their own interests. These different dimensions of well-being often involve trade-offs so that an individual may gain greater ‘agency’ by withdrawing from the household but have to sacrifice affectivity or material well-being.

At the same time, there may be situations where members may feel strongly enough about a decision to seek to influence its outcome. Because such action can, in certain cases, lead to open conflict, the likelihood of it happening will be determined partly by the extent to which the member, or members, in question feel able to jeopardize their membership of the household, in other words, on the strength of their fall-back positions. The second important difference between institutional and neoclassical approaches to bargaining relates to how they conceptualize differences in fall-back positions. While the primary focus of neoclassical approaches has been on differences in individual economic resources, institutional analysis emphasizes the much wider range of constraints and possibilities which reflect the household as a specific institutional form and create social differentials among individual members, or categories of members. These points have been articulated most clearly in the literature dealing with the gender dynamics of household decision-making and will be elaborated by drawing from this literature.

4. Gender And The Structure Of Constraint

Neoclassical approaches to household economics tend to treat differences in resource endowments as the product of individual efforts or as ‘given’ by genetic features like the sex of individuals. Institutional approaches, by contrast, suggest that these differences are influenced significantly by social rules and norms which prescribe the distribution of resources, the division of labor and responsibility for decision-making within the household. While it is largely men who are favored by these rules and norms, gender inequalities vary considerably across societies, leading to wide variations in whether, and how, women have influence in household decision-making. For instance, most inheritance laws and customs favor male members of family but vary considerably in how they treat women. In some societies, women can own land and property in their own right. In others, they have rights of access or use, but only as members of particular households. In yet others, they are effectively propertyless. Similarly, social norms tend to assign primary responsibility for domestic work to women in most societies, but vary considerably in whether they permit women to engage in economic activities as well. In societies that practice female seclusion, for instance, women are proscribed culturally from undertaking public forms of employment. They are consequently likely to be far more dependent on male members of the household, and their capacity to influence household decision-making processes correspondingly curtailed, compared with societies where women have a socially-sanctioned role in production.

Finally, there are also cross-cultural variations in the access that women enjoy to extra household social networks which will also influence the extent to which they are dependent on their immediate household members for provision and security. For example, in the Indian context, the ability of women to retain contacts with their natal families after marriage has been found to be an important factor in determining the degree of agency they are able to exercise within marriage.

These variations in the contractual relations of the family create very different sets of gender interests in different social contexts and very different possibilities for women, as the subordinate category, to pursue their own interests. In contexts where women have recognized access to resources and economic opportunities, as in parts of sub-Saharan Africa, the relationship between spouses is often characterized by an overt bargaining element. Attempts to infringe on women’s economic autonomy can result in open conflict, often ending with women leaving their husbands to set up their own households. By contrast, in many parts of South Asia, where women are denied access to critical productive resource or the ability to engage in economic activities, there is less scope for overt bargaining with more powerful male members. Conflicts are likely to be suppressed and dissent expressed covertly through what have been described as the ‘weapons of the weak’: deception, manipulation, and subversion.

5. Gender And The Structure Of Preferences

Neoclassical approaches to household decision-making do not pay a great deal of attention on what motivates people in their behavior. It is assumed that each member will have their individual preferences, depending on what gives them ‘utility’ or satisfaction. Because these are subjectively determined, they will be idiosyncratic to individuals and distributed randomly across the membership. However, evidence that women tend to behave in systematically different ways from men within the household, that they are more likely to put the collective interests before their own and to allocate resources under their jurisdiction to collective, rather than individual forms of consumption, has been given different explanations.

One set of explanations focus on differences in interests and fallback positions. Thus, although women often appear to give value to the collective well-being over their own as a result of prevailing ideologies of maternal altruism, Whitehead’s (1981) work in Ghana leads her to suggest that such altruism often contained a dimension of self-interest. Women’s fortunes are bound up with the fortunes of the household collectivity to a larger extent than those of men and their longer-term self-interests better served through altruistic forms of behavior which helped to preserve household solidarity. According to Agarwal (1997), evidence from South Asia that women tend to subordinate their own well-being to the well-being of others reflected their awareness of the weakness of their fall-back positions and a resulting caution in acting overtly in their own self-interest. An alternative set of explanations suggest that these differences in behavior reflect actual differences in the values and priorities, differences which in turn reflect social definitions of gender identity. Social norms and beliefs do not simply determine gender differences in resource endowments; they also justify and legitimate these differentials by ascribing very different aptitudes and dispositions to men and women, differences which are internalized by them as aspects of their gender identities.

For instance, studies in the US and Europe suggest that the processes of socialization through which men and women acquire their gender identities tend to stress agency and ‘separative’ notions of selfhood for men, and affiliation and ‘connected’ notions of selfhood for women (Chodorow 1978). In the South Asian context, it has been argued that gender identities are linked to differentiated notions of individual self-worth (Sen 1990). Women are seen to accept the lesser status accorded to them by a society and to define their own sense of well-being in terms of the well-being of other family members.

If men and women within the family have different values and preferences, bargaining can take the form of trade-offs between different dimensions of individual well-being noted earlier. Thus, a wife may agree to love, honor, and obey her husband in exchange for his promise to love, honor, and protect her: both value affiliation but the wife trades some amount of agency in return for material security. Alternatively, a husband may accept greater agency for his wife (and perhaps less for himself) by agreeing to her paid employment but only on condition that she does not neglect the housework and hence his material comforts. However, these negotiations and trade-offs will not be conducted on equal terms because the gender differentials in values and priorities do not have symmetrical implications for the bargaining process. If women do indeed attach greater value to affiliation or less value to their own self-worth, it is likely to work to men’s advantage in situations of conflict. First of all, women will be less willing to disrupt household solidarity by open expression of dissent. Second, even if they do decide to engage in explicit bargaining, they will find it harder to hold out for their own self-interest or to threaten to use the exit option, if things do not go their own way.

6. Conclusion

Institutional approaches to family bargaining differ from neoclassical bargaining approaches because they focus on households as sets of social relationships, rather than a collection of individuals, on the structural determinants of bargaining power rather than the individual, and on the role of norms and values in shaping preferences rather than taking preferences as given. They consequently offer important insights into the specificities of households as social institutions and into what makes bargaining within the family different from bargaining in other arenas of life. Because families are constructed around relations of unequal, but intimate, interdependence, power within the family is rarely exercised in a naked form. Violence, and the threat of violence, exist, but more often, men are able to resort to the authority vested in them in their capacity as household heads or as primary breadwinners to protect their own interests. The association of authority with male roles within the family explains why decision-making roles are not reversed automatically in households with unemployed husbands and employed wives or where women earn more than their husbands.

Equally, however, despite their stronger fall-back position, men within the family do not always get their own way. Bargaining processes within the family encompass forms of ‘threats’ as well as ‘persuasions’ that cannot be reduced to the economics of fall-back positions. They reflect the fact that the family is an intensely personal arena of life and that family relationships are suffused with feelings and emotions to a much greater extent than any other institution in society. Because families are based on ideologies of affectivity and shared interests, bargaining within the family rarely takes the form of open self-interest. Instead, it is conducted as negotiations over meanings and interpretations of, for instance, what constitutes the collective interests of family members, what their proper roles and responsibilities should be, and the basis of claims on collective household resources.

This means that, despite their subordinate position, women have a valuable resource on which they can draw in devising their bargaining strategies: their intimate knowledge of other family members, of their feelings and emotions, as well as their values and priorities. This knowledge can be translated into various forms of ‘threats,’ including persistent complaining, ridicule, withdrawal into silence, and withholding sex from husbands. Alternatively, they may employ more persuasive tactics. These may be discursive in form, for instance, appeals to shared interests in children’s welfare as the justification for pursuing some preferred course of action. Or they may be more practical, involving strategies of ‘wielding and yielding,’ trading concessions in some areas in some areas to win concessions in others.

However, the fact that, despite the weakness of their fall-back positions, women are able to engage in a variety of bargaining maneuvers to achieve their priorities, should not be taken to negate the importance of improvements in their fall-back positions. Such improvements can bring about qualitative transformation in the asymmetries of the bargaining process. They can, for instance, lead to more open forms of bargaining between equals in place of the covert tactics that make up the ‘weapons of the weak.’ They can also open up for negotiation and contestation of aspects of household inequality that were previously considered nonnegotiable, for instance, in the domestic division of labor.

Research is needed to establish which are the most critical opportunities and constraints which make up women’s fall-back position in different societies, how changes in these opportunities and constraints come about, and what role can be played by policy and public action to facilitate the right kind of changes. Women’s paid activities has been found to be one of the most consistent predictors of their capacity to exercise agency within the household, both in advanced industrialized countries as well as in poorer ones. However, their ability to take advantage of employment opportunities is itself a matter for bargaining and negotiation, particularly in societies which practice female seclusion. The fact that women have, nevertheless, been able to do so suggests that other factors also came into play in negotiating these opportunities. Economic resources are important, but they may require changes of the kind brought about by enabling policies and social movements before their transformatory potential can be realized.

In addition, research is needed on the pathways by which changes in the wider structures of constraints and opportunities transform the unequal interdependencies of the family. It is possible that they will vary considerably according to local beliefs and values. In cultures that are strongly individualist in their outlook, women may use improvements in their fall-back position to seek greater independence, perhaps exercising their exit options. On the other hand, in cultures that emphasize collective values, they may prefer to bargain for greater equality in decision-making, the democratization of household structures. Attempts to evaluate the transformatory potential of different kinds of change in women’s fall-back position will ‘misread’ the nature of the process if they are premised on an inappropriate set of values.

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