ANTI-PUBLIC FINANCE? The Democratic Effects of Municipal Bond Markets

Abstract

Municipal bonds are a financial instrument once largely limited to North America. Today, they are appearing in international development reports as a novel best-practice for closing the world’s infrastructure funding gap and for promoting democracy. Critics of financialization have argued that municipal bonds have had the opposite effect: they have deepened austerity, ceded control of democratic municipalities to the global financial industry, and depoliticized public decision-making. Yet in this article, I observe a relationship between democracy, politics and finance which contrasts with the now common uses of ‘financialization’ popularized by critical scholars in Euro-American universities. I argue that, elsewhere in the world, capital markets have come to be understood as an important element of democratization. To make this argument, I develop the concept of ‘financial publics’—a group of strangers participating in a reflexive and reciprocal style of address through which they negotiate their financial relationships with one another. Using this concept, I analyze data drawn from over two years of ethnographic research on one of the most noteworthy experiments in municipal finance in the global South: the City of Dakar’s failed attempt to issue the first ever municipal bond on the Regional Stock Exchange of West Africa.

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