Financialization of Municipal Water: A Case Study in The Arid American West

• In Event: 4255 - Section on Economic Sociology Roundtables (1 hour)
  In Refereed Roundtable 60min: 2. Environmental Concerns

Abstract

The expansion of large-scale water infrastructure—primarily dams, aqueducts, and pipelines—beginning in the early 1900’s, enabled explosive population growth and the extensive development of the arid Los Angeles basin and surrounding areas. Not only do the public institutions overseeing this hydrological infrastructure control material assets worth tens of billions of dollars, but in the modern day they also maintain investment portfolios worth additional billions. This paper seeks to understand how these public agencies came to be large players in global financial markets. The financial story has two sides: On one hand water agencies invest surplus moneys on financial markets, and on the other they issue debt through municipal bond instruments. With this in mind, I consider how these financial engagements affect the broader mission of stewarding the water supply. Using archival research methods, focusing on a case study of major municipal water wholesaler in Southern California, this paper tracks the rise of financialization in public water municipalities since the mid 20th century and analyzes the implementation of market logics in the realm of public institutions. This study contributes to sociological perspectives on the financialization of the economy, the social embeddedness of economic actions, and the management of essential natural resources.

Author

• Christopher Gibson, UC Irvine