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

How does financialization impact the governance of natural resources and what does it mean for environmental stewardship? The expansion of largescale water infrastructure beginning in the early 1900's enabled explosive population growth and development in the arid Los Angeles basin and surrounding areas. Water supply organizations control assets worth billions of dollars, have taxing authority, are democratically elected, make far-reaching environmental and economic decisions, and, also, I argue, engage heavily in a variety of financial endeavors. On one hand water agencies invest surplus moneys on financial markets, and on the other they issue debt through municipal bond instruments. Analysis of archival documents of the largest municipal water wholesaler in California suggests that financial investment activities, even if yielding dwindling returns over time, are deployed to obtain favorable credit ratings and interest rates on their bonds. However, the pursuit of financial objectives potentially undermines democratic accountability and sustainable resource governance. Overall, this article identifies financialized public governance as a challenge to environmental sustainability, underscores how quantification influences public policy and social life, and suggests reforms for more sustainable management of natural resources. [ABSTRACT FROM AUTHOR]