IDEAS home Printed from https://ideas.repec.org/a/bla/ijurrs/v46y2022i6p911-932.html
   My bibliography  Save this article

EDUCATION REFORM AND FINANCIALIZATION: Making the Fiscal Crisis of the Schools

Author

Listed:
  • Stephanie Farmer
  • Rachel Weber

Abstract

Our fiscal analysis of Chicago Public Schools (CPS) from 1990 to 2018 contributes to a growing scholarship on the financialization of urban governance. We advance the concept of ‘recursive austerity’ to show how devolution and cuts at higher scales push local governments into the hands of both growth and debt machines. The use of short‐term and variable‐rate debt to pay for capital projects causes entrepreneurial and austerity strategies to chafe against their limitations and contradictions, which begets more austerity and structural dependence on credit markets. Faced with deficits, CPS undertook crippling austerity measures, such as staffing cuts, pension holidays and school closures, which disproportionately harmed Black students, households, teachers and neighborhoods. We explain how CPS moved from a voluntary high‐leverage strategy to finance capital projects to endemic debt dependency, characterized by habitual borrowing to refinance old loans and sustain operations. We argue that CPS's debt trap and recurring budget ‘crises’ are the outcomes of the fiscal management decisions it made with investment banks and the City of Chicago, and not only the result of secular trends such as declining enrollments.

Suggested Citation

  • Stephanie Farmer & Rachel Weber, 2022. "EDUCATION REFORM AND FINANCIALIZATION: Making the Fiscal Crisis of the Schools," International Journal of Urban and Regional Research, Wiley Blackwell, vol. 46(6), pages 911-932, November.
    • Handle: RePEc:bla:ijurrs:v:46:y:2022:i:6:p:911-932
    DOI: 10.1111/1468-2427.13137
    as

    Download full text from publisher

    File URL: https://doi.org/10.1111/1468-2427.13137
    Download Restriction: no
    File URL: https://libkey.io/10.1111/1468-2427.13137?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    References listed on IDEAS

    as
    1. Katherine B. Hankins & Deborah G. Martin, 2006. "Charter Schools and Urban Regimes in Neoliberal Context: Making Workers and New Spaces in Metropolitan Atlanta," International Journal of Urban and Regional Research, Wiley Blackwell, vol. 30(3), pages 528-547, September.
    2. Jenkins, Destin, 2021. "The Bonds of Inequality," University of Chicago Press Economics Books, University of Chicago Press, edition 1, number 9780226721545, April.
    3. L. Owen Kirkpatrick & Michael Peter Smith, 2011. "The Infrastructural Limits to Growth: Rethinking the Urban Growth Machine in Times of Fiscal Crisis," International Journal of Urban and Regional Research, Wiley Blackwell, vol. 35(3), pages 477-503, May.
    4. Jamie Peck & Heather Whiteside, 2016. "Financializing Detroit," Economic Geography, Taylor & Francis Journals, vol. 92(3), pages 235-268, July.
    5. Ashlyn Aiko Nelson & Beth Gazley, 2014. "The Rise of School-Supporting Nonprofits," Education Finance and Policy, MIT Press, vol. 9(4), pages 541-566, October.
    6. Blyth, Mark, 2013. "Austerity: The History of a Dangerous Idea," OUP Catalogue, Oxford University Press, number 9780199828302.
    7. Elvin Wyly & Markus Moos & Daniel Hammel & Emanuel Kabahizi, 2009. "Cartographies of Race and Class: Mapping the Class‐Monopoly Rents of American Subprime Mortgage Capital," International Journal of Urban and Regional Research, Wiley Blackwell, vol. 33(2), pages 332-354, June.
    8. Robert L. Green & Bradley R. Carl, 2000. "A Reform for Troubled Times: Takeovers of Urban Schools," The ANNALS of the American Academy of Political and Social Science, , vol. 569(1), pages 56-70, May.
    9. Andy Pike & Peter O’Brien & Tom Strickland & Graham Thrower & John Tomaney, 2019. "Financialising City Statecraft and Infrastructure," Books, Edward Elgar Publishing, number 18319.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Melissa Heil, 2022. "Debtor spaces: Austerity, space, and dispossession in Michigan’s emergency management system," Environment and Planning A, , vol. 54(5), pages 966-983, August.
    2. Zhenfa Li & Fulong Wu & Fangzhu Zhang, 2023. "State de-financialisation through incorporating local government bonds in the budgetary process in China," Journal of Economic Geography, Oxford University Press, vol. 23(5), pages 1169-1190.
    3. Laura Deruytter & David Bassens, 2021. "The Extended Local State under Financialized Capitalism: Institutional Bricolage and the Use of Intermunicipal Companies to Manage Financial Pressure," International Journal of Urban and Regional Research, Wiley Blackwell, vol. 45(2), pages 232-248, March.
    4. Luan, Xiaofan & Li, Zhigang, 2022. "Financialization in the making of the new Wuhan," Land Use Policy, Elsevier, vol. 112(C).
    5. Dimitar Anguelov, 2024. "State‐owned Enterprises and the Politics of Financializing Infrastructure Development in Indonesia: De‐risking at the Limit?," Development and Change, International Institute of Social Studies, vol. 55(3), pages 493-529, May.
    6. Stephanie Farmer & Chris D Poulos, 2019. "The financialising local growth machine in Chicago," Urban Studies, Urban Studies Journal Limited, vol. 56(7), pages 1404-1425, May.
    7. Rachel Weber, 2021. "Embedding futurity in urban governance: Redevelopment schemes and the time value of money," Environment and Planning A, , vol. 53(3), pages 503-524, May.
    8. Peter O’Brien & Phil O’Neill & Andy Pike, 2019. "Funding, financing and governing urban infrastructures," Urban Studies, Urban Studies Journal Limited, vol. 56(7), pages 1291-1303, May.
    9. Phil McManus & Graham Haughton, 2021. "Fighting to undo a deal: Identifying and resisting the financialization of the WestConnex motorway, Sydney, Australia," Environment and Planning A, , vol. 53(1), pages 131-149, February.
    10. Lisa Berglund, 2020. "The Shrinking City as a Growth Machine: Detroit's Reinvention of Growth through Triage, Foundation Work and Talent Attraction," International Journal of Urban and Regional Research, Wiley Blackwell, vol. 44(2), pages 219-247, March.
    11. Zhenfa Li & Fulong Wu & Fangzhu Zhang, 2023. "Adaptable state-controlled market actors: Underwriters and investors in the market of local government bonds in China," Environment and Planning A, , vol. 55(8), pages 2088-2107, November.
    12. Yi Feng & Fulong Wu & Fangzhu Zhang, 2024. "Building state centrality through state selective financialization: Reconfiguring the land reserve system in China," Environment and Planning A, , vol. 56(3), pages 766-783, May.
    13. Mikael Omstedt, 2020. "Reading risk: The practices, limits and politics of municipal bond rating," Environment and Planning A, , vol. 52(3), pages 611-631, May.
    14. Félix Adisson & Francesca Artioli, 2020. "Four types of urban austerity: Public land privatisations in French and Italian cities," Urban Studies, Urban Studies Journal Limited, vol. 57(1), pages 75-92, January.
    15. Pauline McGuirk & Robyn Dowling & Pratichi Chatterjee, 2021. "Municipal Statecraft For The Smart City: Retooling The Smart Entrepreneurial City?," Environment and Planning A, , vol. 53(7), pages 1730-1748, October.
    16. Feng, Yi & Wu, Fulong & Zhang, Fangzhu, 2022. "The development of local government financial vehicles in China: A case study of Jiaxing Chengtou," Land Use Policy, Elsevier, vol. 112(C).
    17. Zhang, Fangzhu & Wu, Fulong, 2022. "Financialised urban development: Chinese and (South-)East Asian observations," Land Use Policy, Elsevier, vol. 112(C).
    18. Jamie Peck, 2017. "Transatlantic city, part 1: Conjunctural urbanism," Urban Studies, Urban Studies Journal Limited, vol. 54(1), pages 4-30, January.
    19. N/A, 2020. "Book symposium: Pike et al.’s Financialising City Statecraft and Infrastructure," Environment and Planning A, , vol. 52(4), pages 790-813, June.
    20. Grete Gansauer & Julia H Haggerty & Kristin K Smith & Mark N Haggerty & Kelli F Roemer, 2024. "Can infrastructure help ‘left behind’ places ‘catch up?’ Theorizing the role of built infrastructure in regional development," Cambridge Journal of Regions, Economy and Society, Cambridge Political Economy Society, vol. 17(2), pages 393-406.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:bla:ijurrs:v:46:y:2022:i:6:p:911-932. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Wiley Content Delivery (email available below). General contact details of provider: http://www.blackwellpublishing.com/journal.asp?ref=0309-1317 .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.