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Sovereignty, Credible Commitments, and Economic Prosperity on American Indian Reservations

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  • Terry L. Anderson
  • Dominic P. Parker
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    Abstract

    American Indian reservations are islands of poverty in a sea of wealth. Because this poverty cannot be explained solely by natural resource, physical, and human capital constraints, institutions are likely to be part of the explanation. One of the institutional variables is the sovereign power of tribes, which allows tribal governments to act opportunistically. The potential for such opportunistic behavior can thwart economic development if tribes are unable to make credible commitments to stable contract enforcement. One avenue for credible commitments is Public Law 280, which required some tribes to turn judicial jurisdiction over civil disputes to the states in which they reside. Using data for 1969-99, we find that per capita income for American Indians on reservations subject to state jurisdiction grew significantly more than it did for Indians who were not. (c) 2008 by The University of Chicago. All rights reserved..

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    Bibliographic Info

    Article provided by University of Chicago Press in its journal The Journal of Law and Economics.

    Volume (Year): 51 (2008)
    Issue (Month): 4 (November)
    Pages: 641-666

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    Handle: RePEc:ucp:jlawec:v:51:y:2008:i:4:p:641-666

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    Web page: http://www.journals.uchicago.edu/JLE/

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    Cited by:
    1. Anderson, Terry L. & Parker, Dominic P., 2009. "Economic development lessons from and for North American Indian economies," Australian Journal of Agricultural and Resource Economics, Australian Agricultural and Resource Economics Society, vol. 53(1), March.

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