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Culture and Native American economic development

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  • Jordan Karl Lofthouse

Abstract

Purpose - The purpose of this paper is to explore how culture affects economic development on Native American reservations by examining how culture directs the attention of entrepreneurs and interacts with formal governance institutions. Design/methodology/approach - This paper combines theoretical insights from economic sociology, market process economics and institutional economics as a basis to evaluate entrepreneurship and economic development on Native American reservations. Culture, as a web of social meanings, shapes what opportunities entrepreneurs are alert to, influences how they perceive transaction costs and determines whether institutions achieve their intended ends. Historical and contemporary case studies are used to build analytical narratives to corroborate the theoretical approach. Findings - The federal government has imposed many formal institutions on reservations, which have disrupted traditional governance and property rights structures. If formal institutions do not comport with the underlying culture, those institutions do not facilitate positive entrepreneurship and economic growth. Despite the barriers, entrepreneurs across several reservations have leveraged their cultural and social ties to create robust informal economies. In some cases, imposed institutions have fostered rent-seeking and have given rise to a culture of rent-seeking. Research limitations/implications - This paper looks at Native American entrepreneurship and institutions in the broadest sense. However, there is a large amount of diversity within the cultural and governance structures of Native American communities. Future research could examine specific tribes or reservations in more detail. Practical implications - This paper elucidates cultural and institutional barriers to productive entrepreneurship on Native American lands. Policymakers must understand these root causes if they are to facilitate economic growth. Originality/value - This paper’s combination of theoretical perspectives helps explain the widespread economic development issues on Native American lands.

Suggested Citation

  • Jordan Karl Lofthouse, 2019. "Culture and Native American economic development," Journal of Entrepreneurship and Public Policy, Emerald Group Publishing Limited, vol. 9(1), pages 21-39, November.
    • Handle: RePEc:eme:jepppp:jepp-06-2019-0050
    DOI: 10.1108/JEPP-06-2019-0050
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    References listed on IDEAS

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    1. Leeson, Peter T., 2005. "Endogenizing fractionalization," Journal of Institutional Economics, Cambridge University Press, vol. 1(1), pages 75-98, June.
    2. Peter J. Boettke & Christopher J. Coyne & Peter T. Leeson, 2015. "Institutional stickiness and the New Development Economics," Chapters, in: Laura E. Grube & Virgil Henry Storr (ed.), Culture and Economic Action, chapter 6, pages 123-146, Edward Elgar Publishing.
    3. McChesney, Fred S, 1990. "Government as Definer of Property Rights: Indian Lands, Ethnic Externalities, and Bureaucratic Budgets," The Journal of Legal Studies, University of Chicago Press, vol. 19(2), pages 297-335, June.
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