The potential of public banks to fund local quality public services

Geneva, Switzerland - Virtual event

Sep 14 - Sep 14

15:30 - 17:00 CEST

The launch of the PSI Policy Brief “The potential of public banks to fund local quality public services: A policy brief for workers and trade unions” by Thomas Marois, Professor in Political Science, McMaster University, Canada, will be held online on 

Thursday 14 September 2023 9.30-11am EST //11.30-13am GMT-3// 3.30-5pm CEST.

Interpretation will be available in English, French and Spanish.

Register here

Draft Agenda

  • Opening remarks: Daria Cibrario, Local and Regional Government Officer, PSI (10’)

  • Presenter: Thomas Marois, Professor of Political Economy, Department of Political Science, McMaster University, Canada (20’)

  • Respondents:  

  • Q&A session with online participants (30’)

  • Closing remarks (10’)

  • Next steps (10’) 

The potential of public banks to fund local quality public services: A policy brief for workers and trade unions

PSI is has published a new policy brief for workers and trade unions  about “The potential of public banks to fund local quality public services for all”.

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The Covid pandemic has shown the inestimable, life-saving value of public services. 

At the forefront of public service provision and emergency responses, local and regional governments (LRGs) and their workers are essential to save lives, protect communities and the environment, and implement local, national and global public policy frameworks on the ground. However, Covid has also exposed another deadly pandemic: the global investment deficit and understaffing in local public services, epitomized by the ‘service deserts’ affecting many territories and communities, especially rural ones. Decades of systematic de-funding, austerity, public sector cuts, tax avoidance, privatisation, LRG ‘reform’ and digital-only service delivery have caused scarring damage and deepened inequalities.

Accessing a regular stream of public resources remains a major challenge for most LRGs worldwide. Covid has sharpened this LRG funding crisis. Within this context, the temptation for LRGs to resort to quick patches and short-sighted solutions to attract private capital is strong. PPPs, municipal bonds, blended finance, as well as city-based credit-rating benchmarking on the stock exchange and intermunicipal tax competition are often presented as magic solutions to LRGs by market advocates. PSI has consistently advocated for tax justice for local governments and communities as well as for stronger, progressive municipal fiscal systems. The junction of multiple crises – pandemic, climate, social, economic, displacement, and war - calls on LRG workers and their unions to review existing public funding options and explore new opportunities available to collectively strengthen public funding to boost the equitable provision of quality local public service for all.

A 2020 estimate counts 910 public banks worldwide with total combined assets of 48.71 USD trillion.

Public banks are among the policy levers that PSI has identified to explore to strengthen subnational financing systems to fund local quality public services and jobs. A 2020 estimate by the author of this paper counts 910 public banks worldwide with total combined assets of 48.71 USD trillion. This is an incredible amount of public resources that could be put to good use to work towards common goals, including boosting local public service provision, de-carbonisation, active employment policies, and inclusive socio-economic development. This is why public banks - and their democratisation - should be a key concern for trade unions globally. This policy brief can be used by PSI trade unions to build an understanding of what public banks are, how they operate (or should operate), where they can be found in their local communities, what good governance could look like (including workers and community participation), and how they can be mobilised in the public interest. 

What must the March 2023 bank failures of Silicon Valley Bank, California, Signature Bank, New York, and Credit Suisse, Switzerland remind us of as we struggle to confront the intertwined global challenges of energy transitions and structural inequality? When banks are run for and governed by profit rather than by green and just policy priorities, the government, society, and environment ultimately pay the price. Not only is progress on climate and equality stalled, but it is also reversed. Time and resources instead flow into bailing out an already failed model of financialised economic growth and corporate governance. What's needed is a democratic public banking alternative that is by and for society, that is governed accountably and transparently, and that is mandated to deliver on green and just transitions in the public interest.

Public financing for local quality public services emerged as a top policy priority for the PSI Global LRG Unions Network during its participatory membership consultations ‘LRGNext2021’. This priority is reflected in the PSI LRG Global Network Action Plan 2022-27. Indeed, ensuring that LRGs have sufficient, secure public resources and the building of PSI affiliate capacity in this field are of primary importance. Regular, adequate and appropriate funding for LRGs goes hand in hand with LRG workers’ employment and decent working conditions, as well as with equitable access to quality local public services in communities and territories.

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