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

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  • Terry L. Anderson
  • Dominic P. Parker

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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  • Terry L. Anderson & Dominic P. Parker, 2008. "Sovereignty, Credible Commitments, and Economic Prosperity on American Indian Reservations," Journal of Law and Economics, University of Chicago Press, vol. 51(4), pages 641-666, November.
    • Handle: RePEc:ucp:jlawec:v:51:y:2008:i:4:p:641-666
    DOI: 10.1086/590205
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    2. Brown, James R. & Cookson, J. Anthony & Heimer, Rawley Z., 2019. "Growing up without finance," Journal of Financial Economics, Elsevier, vol. 134(3), pages 591-616.
    3. Fernando M. Aragon, 2014. "Do better property rights improve local income?: Evidence from First Nations' treaties," Discussion Papers dp14-02, Department of Economics, Simon Fraser University.
    4. Bauer, Anahid & Feir, Donn. L. & Gregg, Matthew T., 2022. "The tribal digital divide: Extent and Explanations," Telecommunications Policy, Elsevier, vol. 46(9).
    5. 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.
    6. Christian Dippel & Dustin Frye & Bryan Leonard, 2020. "Property Rights without Transfer Rights: A Study of Indian Land Allotment," NBER Working Papers 27479, National Bureau of Economic Research, Inc.
    7. 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), pages 1-23.
    8. Krishna Pendakur & Ravi Pendakur, 2018. "The Effects of Modern Treaties and Opt-In Legislation on Household Incomes in Aboriginal Communities," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 137(1), pages 139-165, May.
    9. Dimitrova-Grajzl, Valentina & Grajzl, Peter & Guse, A. Joseph & Todd, Richard M., 2015. "Consumer credit on American Indian reservations," Economic Systems, Elsevier, vol. 39(3), pages 518-540.
    10. R. Warren Anderson, 2016. "Native American reservation constitutions," Constitutional Political Economy, Springer, vol. 27(4), pages 377-398, December.
    11. Aragón, Fernando M., 2015. "Do better property rights improve local income?: Evidence from First Nations' treaties," Journal of Development Economics, Elsevier, vol. 116(C), pages 43-56.
    12. Feir, Donn. L. & Jones, Maggie E. C. & Scoones, David, 2022. "When Do Nations Tax? The Adoption of Property Tax Codes by First Nations in Canada," IZA Discussion Papers 15820, Institute of Labor Economics (IZA).
    13. Donna Feir & Rob Gillezeau & Maggie E. C. Jones, 2019. "The Slaughter of the Bison and Reversal of Fortunes on the Great Plains," Center for Indian Country Development series 1-2019, Federal Reserve Bank of Minneapolis.
    14. Donn Feir & Rob Gillezeau & Maggie Jones, 2017. "The Slaughter of the North American Bison and Reversal of Fortunes on the Great Plains," Department Discussion Papers 1701, Department of Economics, University of Victoria.
    15. Bauer, Anahid & Feir, Donn. L. & Gregg, Matthew T., 2022. "The tribal digital divide: Extent and Explanations," Telecommunications Policy, Elsevier, vol. 46(9).
    16. Akee, Randall & Jorgensen, Miriam & Sunde, Uwe, 2015. "Critical junctures and economic development – Evidence from the adoption of constitutions among American Indian Nations," Journal of Comparative Economics, Elsevier, vol. 43(4), pages 844-861.
    17. Gregg, Matthew T., 2018. "The long-term effects of American Indian boarding schools," Journal of Development Economics, Elsevier, vol. 130(C), pages 17-32.
    18. Harris,Colin & Cai,Meina & Murtazashvili,Ilia & Murtazashvili,Jennifer Brick, 2020. "The Origins and Consequences of Property Rights," Cambridge Books, Cambridge University Press, number 9781108969055.
    19. Leonard, Bryan & Parker, Dominic P. & Anderson, Terry L., 2020. "Land quality, land rights, and indigenous poverty," Journal of Development Economics, Elsevier, vol. 143(C).
    20. Akee, Randall & Jorgensen, Miriam, 2014. "Property institutions and business investment on American Indian reservations," Regional Science and Urban Economics, Elsevier, vol. 46(C), pages 116-125.
    21. Laurel Wheeler, 2019. "Property Rights, Place-Based Policies, and Economic Development," Working Papers 19-16, Center for Economic Studies, U.S. Census Bureau.
    22. Ilia Murtazashvili & Jennifer Murtazashvili, 2019. "The political economy of legal titling," The Review of Austrian Economics, Springer;Society for the Development of Austrian Economics, vol. 32(3), pages 251-268, September.

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