Embedding Racism: City Government Credit Ratings and the Institutionalization of Race in Markets.

The article examines how racism and racial inequality are institutionalized in contemporary markets through ratings and scores, focusing on city government credit ratings as a case study. It argues that while ratings appear objective, their inputs often reflect historical racial disadvantages, producing racial disparities that evade recognition—a concept termed an "epistemology of racial ignorance." Using an original dataset approximating Moody's credit rating criteria for 109 large U.S. cities (2002–2009), the study finds that cities with larger Black populations receive lower credit ratings, a disparity that persists after controlling for non-racialized factors but disappears when median family income—a racialized input linked to historical economic inequality—is included. This demonstrates how racialized inputs embed racism in market mechanisms, allowing racial inequality to persist covertly and challenging traditional empirical methods to identify such disparities. The findings highlight the need for critical scrutiny of rating criteria and their role in perpetuating racial inequality in financial markets and beyond.