Banking the Unbankable: The Impact of Racialized Public Organizations on Public Service

Abstract

In organizational studies, organizations are largely considered race-neutral. This remains prevalent despite the assertion that individuals within organizations can be racialized. The core assumption that centers organizational goals, over emphasizes race at the individual level and fails to recognize race at the organizational level. The goal focused approach to organizations neglects the role of race within the structures of the wider institutional environment. In the United States (US), a white European colonial and settler history is the unmarked backdrop of what we consider ‘mainstream’ society and organizations. But along this landscape is also the subjugation of Native American and Black communities who share a history of racist treatment that has been legitimized throughout government policies and organizational practices, particularly in the name of colonization or capitalism. And although policy efforts attempt to reduce inequities, a number of discriminatory practices persist through organizational action. To examine these issues I use a theory of racialized organizations to investigate the history and extent through which these processes occur in the context of the banking and community development financial institutions industry. More specifically, I examine how the racialized public organization impacts public service. Lending practices within the U.S. provides broad insight into the extent to which organizational action prohibits the financial agency of communities of color. Community development financial institutions offer a remedy for providing access to capital to under resourced communities. Moreover, the remedy includes organizational action that targets distinct racial/ethnic populations as well as approaches that are assumed to include a more general population. Drawing on legislative documents, interviews, and survey data, I explore the impact of racialized public organizations on public service. More specifically, I test a theory of racialized organizations within the public sector. I empirically demonstrate how racially unmarked public organizations underserve communities of color and racially marked public organizations work to address the gap in public service. I begin with a legislative history of the 1994 Riegle Act and review the reasons why community development financial institutions need policy support and public funding. In chapter 3, I then contextualize these organizations with a case study of two CDFIs that balance their mission to provide access to capital for economically distressed among their target client base. In chapter 4, I present my theoretical argument that all public organizations are racialized. In chapter 5, using a theory of racialized organizations, I empirically examine the extent to which racially unmarked or marked organizations impact service to both white clients and communities of color. This final study advances the field by empirically testing a theory of racialized organizations in the public sector. Chapter 6, discusses the implications, limitations, and policy recommendations for this work. As a whole, this dissertation reveals how public organizations can fall short of or advance efforts to address inequities in public service and among target populations. It also examines the extent to which unmarked white organizations are biased towards the service of white clients.