Economic Democracy Explained: Community Control over Institutions through Co-Governance

We need an economy where marginalized communities have a sustained seat at the table and are empowered decision-makers on the matters that most impact their lives.

Our country has been deliberately structured in a way that systematically bars Black and brown communities and people with low incomes from fully participating in our economy and democracy. Where we’ve made meaningful and historic strides toward lowering these barriers, corporations and the wealthy have fought tooth and nail to restore them. Wealthy special interests have used their power to influence policymaking at the expense of our people and communities. Such influence has led to decades of government disinvestment in the resources we all need to thrive. Meanwhile, the gap between the rich and everyone else keeps growing at rates not seen for nearly a century. Decision-making power must shift away from the wealthy corporate class and instead to the people—particularly Black and brown communities.

We need an economy where marginalized communities have a sustained seat at the table and are empowered decision-makers on the matters that most impact their lives.

The concept of economic democracy has many interpretations, from scenarios in which communities decide how to manage their collective needs, like affordable housing and energy, to creating accessible channels that allow more people to participate in governing processes at all levels of government. According to the Center for Economic Democracy, an economic democracy brings more people to the decision-making table to “collectively decide how to use land, labor, and capital to serve the public good.” At Dēmos, we envision co-governance as a strategy to ensure everyone’s needs are met. Co-governance can enable robust and equitable investment in the public provisioning of goods and services and push back against the corporate stronghold over our government. This brief makes a case for directly empowering frontline communities to help govern public and private institutions that impact their lives. Properly structured, co-governance can serve as a facilitator toward building public power, a necessary counterbalance to concentrated corporate power. It also can ensure that government is accountable to the people and makes way for Black and brown communities to collectively advance a just, inclusive economy.

Co-governance aims to produce more equitable, democratic, and inclusive policy decisions about the economy, working and living conditions, and public spending

Co-governance aims to produce more equitable, democratic, and inclusive policy decisions about the economy, working and living conditions, and public spending. It can ensure that government, employers, and other decision-making bodies are more transparent and accountable, and leads to increased engagement in and trust in government by Black and brown people and communities.

Creating a just and equitable democracy and economy requires us to reimagine civic engagement to include governance. As a recent report by Partners for Dignity & Rights and Race Forward points out, we must be careful not to falsely equate democratization with simply maximizing participation. Participation not paired with rigorous attention to balancing power and protecting human rights carries significant risks. Such a shift demands that we—organizers, policymakers, advocates, academics, and more—think creatively and challenge norms surrounding decision-making and strategizing ways to democratize nearly all aspects of our economy and democracy, from the workplace to our schools as well as the goods and resources we rely on daily.

Opportunities Ahead: The Biden Administration’s federal investments and implementation

Trillions of dollars are beginning to flow to states and territories through the Inflation Reduction Act (IRA), the CHIPS and Science Act (CHIPS), the Infrastructure Investment and Jobs Act (IIJA), and continued implementation of the American Rescue Plan Act (ARPA), offering a critical opportunity to strengthen our economy and democracy. However, history tells us that government investment alone is no remedy for addressing inequality. As these investments go out across the country, it is critical that that voices and the needs of Black and brown people are front and center.

While these investments represent a more than $3 trillion downpayment [,] success hinges on execution.

While these investments represent a more than $3 trillion downpayment on addressing the climate crisis, building and rebuilding critical infrastructure from roads and bridges to semiconductors, and promoting good jobs for all, success hinges on execution. Significant barriers to the participation of grassroots organizations in funding decisions currently exist in part due to the process under which this funding was advanced in Congress. Also, our government was not structured to make space for community engagement.

Monies flow through myriad federal and state agencies and come with a host of different application and reporting requirements, creating barriers for communities seeking to identify opportunities for engagement. Entities equipped with more resources—such as ample staff or dedicated legal or lobbying arms—are less burdened in taking advantage of opportunities for outside engagement in the allocation process. To be sure, corporations are already lining up to leverage this funding to enrich themselves and their shareholders and will continue to engage in intense lobbying to that end throughout the lifecycle of this funding. In addition, funding largely either flows through established funding streams, or will be allocated via tax credits, which creates additional barriers to community engagement.

This dynamic is particularly worrisome because it makes it harder to incorporate the voice and demands of community members and organizers who best know their communities and best know what areas and projects need investing or don’t. We saw this dynamic play out in 2022 when Texas Governor Greg Abbott shifted $1 billion in federal coronavirus aid to help pay for Operation Lonestar, a campaign to detain migrants at the U.S.-Mexico border. Some agencies have already moved forward with plans to cement meaningful community engagement into their processes. For example, the Department of Energy is requiring companies that are awarded DOE funding to engage in community benefits agreements to ensure that impacted communities have a say in how that funding is spent. It’s critical at this moment that we push back against closed-door decision making around federal dollars and ensure that information surrounding this funding is accessible to organizers and the broader public.

The Path Forward: Structural changes we can make to advance co-governance

Our vision rejects scarcity and privatization and embraces a vision of robust public provisioning that ensures human thriving.

Advocates must use all levers possible to enable grassroots movements to inform and influence government action through expanded models of co-governance. A just, inclusive, multiracial democracy and economy where the dēmos govern—where Black and brown people are free from oppressive systems obstructing their ability to fully participate and thrive—requires an alternative vision for our economy. Our vision rejects scarcity and privatization and embraces a vision of robust public provisioning that ensures human thriving. We must, therefore, build civic power by expanding co-governance models that generate genuine political and decision-making power for Black and brown communities. At the same time, we must push back against policies and initiatives that thwart opportunities for community members to weigh in.

We can start with:

• Developing and amplifying models of community-based oversight and enforcement over laws, working conditions and public spending. We know that directly impacted stakeholders often have the most on-the-ground knowledge and wield invaluable expertise that helps identify policy problems and create and imagine solutions.  Successful models must ensure that community members and directly impacted stakeholders are given an opportunity to weigh in at every stage of the policymaking process.  Such a model is exemplified in Brooklyn’s Safe Schools pilot program in which students could directly decide on their schools' spending decisions as well as policies to make their schools safer and more supportive. To ensure the program was responsive to students’ needs, they put impacted communities—in this case, the students—at the center. This requires that we go beyond merely the practice of increasing stakeholders, which alone cannot ensure equity outcomes in decision-making. Instead, we need to replicate and scale models, including those referenced below, that are abundant at the local level, those that center and directly engage and are accountable to impacted communities. At the federal level, there is an effort underway to modernize rulemaking processes to ensure that the federal regulatory process is more accessible to impacted communities, a step in the right direction. Other tools to advance community voice could include enacting community benefits agreements, engaging unions and other worker and community organizations like tenant unions, setting up community boards as detailed below and enacting and enforcing performance metrics that consider community engagement. Doing so will help ensure equitable outcomes and push back against the corporate, white, elite capture of our democracy and economy that has plagued our country since its inception.
• Invest in long-term organizing infrastructure. Grassroots organizers across the country have been and continue to embed co-governing processes in their organizing, as is outlined in more depth below. Unfortunately, those organizing efforts are consistently underfunded and lack the long-term investments they’ve demanded for decades. It’s critical that we listen to what people are demanding and prioritize and invest in long-term support for movement-building organizations—support that transcends two- and four-year electoral cycles. Philanthropic institutions, media entities, grasstop organizations and others must acknowledge the necessity of strengthening the broader grassroots movement infrastructure as a prerequisite for achieving economic, political, and civic power.

Current decision-making configurations strip Black and brown communities of their power and cement inequities into the very fabric of our economy and democracy.

Concentrated corporate power and influence over lawmakers and other public officials, coupled with a lack of accountability and transparency, has led to the erosion of civic health and life in the United States, a self-reinforcing cycle that fuels distrust in government. Corporations have an unprecedented influence on our political process, as is demonstrated by a revolving door politic and their massive corporate campaigns. Worse yet, these entities use this influence to subvert the public will, including through concerted efforts to prevent Black and brown people from the right to vote-- a tactic used to maintain anti-democratic decision-making systems. This enables policymakers to block the popular will of the people and enact policies that create material harm and extract wealth and autonomy from all of us. This is especially true for Black and brown people and others historically deprived of wealth and opportunities to build economic power, including historical and ongoing discrimination and systematic racism embedded in our financial and housing systems. Additionally, this lack of willingness and/or ability to address structural economic inequities through robust government action makes it even harder for the most vulnerable in our society to participate in the democratic process.

No branch of the federal government is immune to the influence of corporations and the wealthy. The disease, however, isn’t limited to Washington. Chronic underfunding and disinvestment in what should be universal goods and services has meant that our country has an exceptionally hollowed-out safety net. Lacking access to childcare, a living wage that enables one to put food on the table, or public transportation makes it much harder for an individual to run for office or participate in local decision-making bodies such as boards or commissions. These entities are often structured in ways that make it difficult for poor people, immigrants, and Black and brown people—those most acutely burdened by a lack of government investment--to participate. For example, meetings are held during working hours, no childcare or stipends are offered, and there is no translation for non-English speakers or accommodation for people with disabilities. Each of these burdens was a policy or administrative choice, and each of these choices serves to reinforce existing disparities of power and access.

The need to create additional points of leverage and influence in the policymaking process for Black and brown communities couldn’t be more urgent. Where those in positions of power have failed to ensure affected communities are directly empowered and have leverage over the policy decisions that deeply affect their lives and futures, they must now be pushed to build additional mechanisms for co-governance and civic power. Such processes that help organize the disempowered can push back against the outsized influence corporations have on decision-makers, facilitate that elected officials are accountable to the communities they pledge to serve, and equip Black and brown communities with more material and political power. With these elements of equitable recovery in place, we can build a more just economy going forward.

Mobilizing to push back against privatization: Lessons from grassroots organizers

The decades-long push to maintain decision-making power in the hands of the white corporate elite—at the expense of communities—has not gone unnoticed. Black- and brown-led grassroots movements have again filled a gap that neither the private sector nor our government has been able or willing to fill. Organizers and community members have acted in the interest in the common good, promoting democratic, collective decision-making and principles of justice and equity against enormous odds. Activists across the country are taking seats at tables, confronting private corporations, challenging policy decisions that stand to further entrench inequities in decision-making and promoting civic governance.

• Texas Organizing Project: Organizing for an equitable distribution of relief funds in the wake of Hurricane Harvey
  • After Hurricane Harvey, which caused 68 deaths and $125 billion (about $380 per person in the US) in damages, Black and Latino residents of Houston were the hardest hit yet the least likely to receive Federal Emergency Management Agency assistance. Immediately after the storm, community organizers from began door-knocking in Harris County to support community members with food, water, and financial assistance. To accomplish this, they implemented a 3-part strategy: establish a leadership development program, a campaign to elect a county judge who shared their values and conduct co-governance work with bureaucrats to develop an “equity framework” for funding. Following the organization’s recommendations, Harris County adopted a new framework that considers factors related to a community’s ability to prepare for, respond to, and recover from a disaster, like the percentage of residents who are elderly, have limited English proficiency, and live in households without a vehicle. Government officials in Harris County have recently employed the equitable distribution of CARES Act and ARPA funds.
• Pittsburgh United: Mobilizing a diverse coalition to keep water public in Pittsburgh
  • Following the city of Pittsburgh’s failed partnership with Veolia, a private for-profit water management firm, organizers from Pittsburgh United, a coalition of community, labor, faith, and environmental organizations, developed the Our Water campaign, an effort to mobilize public pressure to prevent future water privatization. From 2017 to 2019, the coalition canvassed impacted communities, organized community members to attend Pittsburgh Water and Sewer Authority (PWSA) board meetings, gave public comments about residents’ needs, and demanded that PWSA be kept public. After months of community organizing from members of the Campaign and the public, the City Council and Mayor Peduto signed the Our Water, Our Rivers pledge to keep PWSA public into the future. They pushed PWSA to implement a co-governance structure by creating community advisory committees so that customers could advise the authority on various issues, a critical change in the city’s decision-making infrastructure, helping to ensure that water remain in the hands of the public for years to come. PWSA also promised to provide flexible payment plans on water bills, total replacement of lead water lines, and a moratorium on water shutoffs during the winter. In the end, Pittsburgh United successfully won the fight to keep water public and ensured the government stayed accountable to Pittsburgh residents—not corporations.
     

Conclusion

Dēmos envisions economic democracy as a framework to understand how to dismantle corporate concentration, racial capitalism, and white supremacy by shifting power to Black and brown communities. A critical piece of this puzzle is expanding community control over institutions, both public and private, through co-governance. To create a truly just multiracial democracy and economy, we must push for structural change at all levels of government while supporting and expanding grassroots organizations’ efforts to fight against concentrated corporate power and make government accountable to the communities they are charged to serve.

At Dēmos, we recognize that expanding co-governance models alone isn’t sufficient to build power for Black and brown communities. To build economic democracy, we also need to combat outsized and consolidated economic and political power wielded by corporate elites. We must strengthen co-governance strategies so that people and public agencies can collectively decide about the economy.