The economics of 'dowry' payments

From a welfare and policy perspective, dowry is a social evil and Bangladesh, like many other countries, has enacted laws prohibiting the payment of dowry during marriage (e.g. Dowry Prohibition Act 1980 and Women and Children Repression Prevention Act 2000). But, still dowry payments remain widespread in Bangladesh in some form or other. Traditionally, the payment of dowry at the time of marriage often becomes a significant burden especially for low-income households. It puts them in a state of perpetual indebtedness and poverty. In many cases, dowry is linked to domestic violence and death among women due to the inability of the bride's parents to pay dowry to the groom's family. For the bride's family, dowry payments are usually treated as a substitute for investments in female human capital (e.g. education) which hampers women's development and social equity and emerges as a significant barrier to promoting human rights.

In many societies, payments between families are prevalent at the time of marriage since ancient times. Such marital transfers come in various forms and amounts which fall under two broad categories: (i) payments from bride's family to groom's family, commonly known as 'dowry'; and (ii) payments from the groom's family to bride's family, known as "bride price." In Bangladesh, as mentioned above, dowry payments remain common, creating significant adverse social and economic consequences, especially among low-income households.

The amount of dowry varies substantially, mostly depending on socioeconomic stratifications and is negotiated on an individual basis. The amount of dowry claimed by the groom's family generally rises not only with the wealth of the bride's father but also with the groom's education and future earnings prospects. During negotiations, the most important quality of a bride is usually her good appearance, while for the groom it is his ability to earn a good living. It may be mentioned here that the payment of dowry is different from the payment of mohorana (dower) in the traditional Islamic marriage contract, under which the husband promises to pay the wife a sum of money (or gold and other valuables) upon marriage (usually consisting of a prompt and a deferred proportion).

The economics of dowry payments may be explained in terms of economic models of the marriage market. In these models, the behaviour of women and men is stipulated on the basis of different qualities (e.g. income earning capabilities). Marriage is treated as a joint venture (e.g. in terms of potential family earnings) and each individual chooses his/her partner that maximises their utilities. Optimal partnership requires that no bride or groom can be made better off by marrying somebody else or not marrying at all. An efficient marriage market pairs a 'high-quality bride' with a 'high-quality groom' and a 'low-quality bride' with a 'low-quality groom'. However, if the marriage market is imperfect so that outcomes can be influenced by other means, compensatory transfers (such as dowry) may be used to influence the outcome. For example, if the bride's share of family income is above her 'shadow price' in the marriage market, a dowry may be paid by the bride's family to the groom's family. However, the division of surplus between wife and husband is unlikely to take place in practice due to social norms, legal restrictions, and inequity in power relations between wife and husband within the household. The economic prediction of such models is that dowry payment should be common in real world situations. Therefore, dowry payments are more likely to take place when men's contribution to household income is likely to be relatively high and there exists greater competition for 'high-quality' grooms from the brides.

The marriage market models imply that the differentials between females and males in terms of their potential income earning abilities determine the nature and size of dowry payments. In turn, the relative distribution of female and male human capital is the key determinant of respective earning capabilities. In Bangladesh, the past development process has opened up new and better income-earning opportunities mostly for men, while women have been restricted to home-based or informal sector activities. This has resulted in the creation of a relatively 'homogenous' group of women with low 'economic' value relative to differentiated groups of men with a wide range of earning capabilities. Thus, dowry payments emerge as men remain the primary recipients of the benefits of development while women reap only marginal benefits.

So what are the policy implications of all this? In Bangladesh, there are many cases of families becoming poorer after paying dowry for their daughter's marriage. This results in unmarried daughters being perceived as economic liabilities. Many women and young girls face torture and even death when dowry demands are not met. Despite the enactment of laws that declare dowry payment a punishable offence, the practice of dowry remains unabated in the country.  

When female earning opportunities increase, investing in female human capital will emerge as the preferred option of investing in girl children rather than paying dowries during marriage. For abolishing dowries, the policies therefore need to focus on creating more equal economic opportunities for women. In addition, along with strengthening the reach of the legal system, there is a need to adopt more effective programmes and campaigns against the practice of dowry violence against women. There should also be more efforts towards raising awareness on gender discrimination and improving female access to justice through the legal system. However, since dowry payments evolve in response to economic forces, policies should encourage parents to invest more in their daughters' human capital along with creating equal income earning opportunities for women.

The writer is former Director General, BIDS.

Email: mujeri48@gmail.com