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

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 tr...

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Bibliographic Details
Published in:The Journal of law & economics 2008-11, Vol.51 (4), p.641-666
Main Authors: Anderson, Terry L., Parker, Dominic P.
Format: Article
Language:English
Subjects:
Contracts
Credible commitment
Criminals
Economic conditions
Economic growth
Government
Indigenous populations
Judicial process
Jurisdiction
Law enforcement
Legal consent
Native Americans
Native North Americans
Native reservations
North Amerindians
Population growth
Poverty
Regional economics
Sovereignty
Standard of living
Studies
Treaty lands
Tribal sovereignty
U.S.A
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Summary: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.
ISSN:0022-2186
1537-5285
DOI:10.1086/590205