Institutional Stability and Gender Inequality in Developing Countries: A Dynamic Panel Analysis

Abstract: This paper investigates the relationship between institutional stability and gender inequality in developing countries. While the existing literature largely focuses on governance quality or isolated institutional dimensions such as democracy or corruption, this study emphasizes institutional stability as a distinct and underexplored determinant of gender outcomes. Institutional stability shapes policy predictability, enforcement capacity, and the continuity of public action, all of which are critical for addressing structural gender disparities. Using an unbalanced panel of developing countries over the period 1995–2019, gender inequality is measured by the Gender Inequality Index (GII) from the United Nations Development Programme, while institutional stability is captured through composite and disaggregated indicators of political, economic, and financial stability from the International Country Risk Guide. To account for the strong persistence of gender inequality and potential endogeneity between institutions and gender outcomes, the analysis employs a dynamic panel framework estimated using the System Generalized Method of Moments (System-GMM). The results show a robust and statistically significant negative relationship between institutional stability and gender inequality. Improvements in overall country stability are systematically associated with lower GII values, even after controlling for economic development, female education, demographic structure, technological diffusion, and cultural and historical factors. The findings further reveal substantial heterogeneity across income groups and across the distribution of gender inequality, indicating that institutional stability operates as a conditional enabling factor rather than a universal remedy. From a policy perspective, the results suggest that efforts to reduce gender inequality are more likely to be effective when embedded in stable political, economic, and financial environments. Institutional stability enhances the sustainability and effectiveness of gender-related reforms but must be complemented by targeted policies addressing education, labor markets, and social norms. Overall, the paper highlights institutional stability as a foundational component of inclusive development strategies in developing countries.