Donor agencies and policy makers tend to agree that increased access of women to education, health, credit, formal legal rights and employment opportunities, in conjunction with economic growth, will substantially improve the socio-economic role of women in developing countries. This paper challenges that view. It argues that these measures might not be sufficient if the institutional framework within a country constrains women from participating in economic activities. It finds that social institutions — laws, norms, traditions and codes of conduct — constitute the most important single factor determining women’s freedom of choice in economic activities. They have not only a direct impact on the economic role of women but also an indirect one through women’s access to resources like education and health care. The findings suggest that an institutional framework that disadvantages half of the adult population hinders development. To address gender inequalities effectively, policy ...