Refinancing The American Dream: The Consequences Of Targeted Financial Policy For Political And Racial Inequality In The United States

This dissertation explores how economic institutions, particularly those from the fringe economy, such as payday loans and pawn shops, influence the political attitudes and participation of racial and ethnic minorities. American financial policy has resulted in a seemingly separate financial services industry, such as pawnshops and payday loans, for those who are poor or who have credit problems. This dissertation demonstrates that state policy shapes access to these institutions and promotes geographic concentration, and that people connect these private institutions with their evaluations of government. The dissertation is presented in three parts. The first section of the dissertation presents a theory to explain how inconsistent policies can affect political behavior in paradoxical ways – that is, the offset of the positive effect of a policy is countered by the negative effects of that policy. Second, it lays the groundwork by providing a historical analysis of how history and state policy converge to provide some financial access to these long-excluded groups while also precluding improvement in long-term financial health. Knowing that political participation of marginalized groups and the necessity to ensure the representation of their interests is shaped by their access to resources and their experiences with policies, leads to the final section where the dissertation examines the relationship between race, the fringe economy, political participation, and political learning. This encompassing dissertation, which includes novel geographic data, survey data with an original question, and interview data from Chicago, IL and Philadelphia, PA illustrates how the fringe economy shapes the political behavior of racial and ethnic minorities. Citizens exposed to these institutions come to understand that governments allow these institutions to operate in their neighborhoods and not wealthier areas, which shapes their attitudes and evaluation of government, as well as their participation. This research highlights how this leads these unstudied institutions to affect peoples’ political behavior and their political attitudes. Financial institutions, akin to other public policies and institutions, can shape the distance of citizens from government with profound implications for democratic governance and inequality in America