NATIVE AMERICAN TRIBES AND ECONOMIC GROWTH:
HISTORICAL AND CONTINUING BARRIERS
By
Daraxa Mattice
A Project Presented to
The Faculty of Humboldt State University
In Partial Fulfillment of the Requirements for the Degree
Master of Business Administration
Committee Membership
Dr. Carol W. Telesky, Committee Chair
Dr. Sarita Ray Chaudhury, Committee Member
Dr. David Sleeth-Keppler, MBA Coordinator
July 2014
ABSTRACT
NATIVE AMERICAN TRIBES AND ECONOMIC GROWTH:
HISTORICAL AND CONTINUING BARRIERS
Daraxa Mattice
Tribal Nations throughout American history have had a complex existence while trying to
navigate through the US government’s definition of tribal sovereignty. There is a link
between history and continuing issues that are stagnating economic growth within Tribal
Nations. Diverse laws and their meanings have had a detrimental effect on tribal people
and their land base. This project is about the link between these complexities and the
current state of American Indian Nations economic growth. I will look at these laws in a
historical context and discuss what tribes are doing economically today.
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ACKNOWLEDGEMENTS
I would like to acknowledge two of my Professors that have helped me, supported me
and given me information that I will use for a lifetime. Dr. Joseph Giovannetti, you have
always given me support and encouragement. I thank you for that and am forever
grateful. I would like to thank Dr. Carol Telesky for giving me a chance and spending
numerous hours with me as an advisor. I am eternally grateful.
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TABLE OF CONTENTS
ABSTRACT ....................................................................................................................... ii
ACKNOWLEDGEMENTS ............................................................................................ iii
INTRODUCTION............................................................................................................. 1
RESEARCH QUESTION ............................................................................................ 1
SIGNIFICANCE ........................................................................................................... 2
OBJECTIVES ............................................................................................................... 2
METHOD .......................................................................................................................... 3
THE EARLY PERIOD..................................................................................................... 4
THE MIDDLE PERIOD ................................................................................................ 11
THE CURRENT PERIOD ............................................................................................. 14
MODELS THAT HAVE FAILED ............................................................................ 15
MODELS THAT ARE SUCCEEDING .................................................................... 18
FUTURE OPPORTUNITIES .................................................................................... 20
THE COMPLEXITIES OF SOVEREIGNTY ............................................................. 23
CONCLUSIONS AND RECOMMENDATIONS ........................................................ 31
REFERENCES ................................................................................................................ 33
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1
INTRODUCTION
It’s been widely demonstrated that economic growth on reservations is substantially
stagnated. When investigating why this is true it is important to take into consideration
the overall perspective of Native American tribal communities. The historical context
leading to the current status of Native tribes is an integral part to understanding the state
of economic development on tribal lands. Initially when settlers came to this continent
there was a mixture of economic participation from European settlers and Native people.
Investigating economic development models that worked and didn’t work can potentially
shed light on the current economic situations in Indian country today. Also important are
changing laws imposed on Native tribes by the federal government and how they have
added to the complexities of tribal economic growth. There are numerous laws that tribal
communities need to adhere to when considering a business venture on tribal land. A
final piece that I will consider when researching economic growth in tribal communities
is the Native American versus European cultural view on how to measure economic
growth and the development of the land.
RESEARCH QUESTION
What are the historical factors that have compromised economic development and what
kinds of policies and investments actually work?
2
SIGNIFICANCE
It is important to understand the link between historical colonialism and the current
situation on economic growth on Native American lands. It needs to be demonstrated
what specific elements are stagnating economic growth in Native American communities.
Understanding the impact of the complex laws pertaining to Native tribes is a primary
issue that needs to be addressed. There are substantial barriers that need to be brought to
light. Understanding these barriers and why they are continuing is an essential part of
navigating change within the tribal communities. Factors contributing to the success of
some development projects and the failure of others are integral to understanding future
development projects by learning from the past.
OBJECTIVES
I intend to demonstrate a relationship between governmental policies and the slowmoving economic growth within Native American tribes while taking into consideration
historical assimilation, cultural views, and the barriers to education within the North
American tribal communities. An understanding of the historical and continuing barriers
and why this is stagnating growth on reservations is needed. The research conducted was
acquired from selected articles and studies done in specific communities. Historical,
present and education barriers will be discussed.
3
METHOD
The method for studying the relationship between barriers to economic growth among
Native Americans and continuing conflicts in cultural views of private property, land
ownership, and labor relations consists of an in-depth literature review of key articles on
the topic. The keywords used were “economic growth on reservations”, “American
Indians and economic growth”, “history of economic issues with Native tribes”, “Native
American economic growth” and “American Indians and economic oppression”, to find
applicable and relevant information. Articles chosen were peer reviewed and from well
established, credible economic and business journals. Many of the authors have
numerous published works and are teaching at US Universities. The authors of these
articles are well established as well, and have published numerous pieces on various
topics related to economic growth and Native American people.
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THE EARLY PERIOD
During the colonization of North America many different types of stories emerged. One
of the most popular was the one about the noble savage. Written historical
documentation discussing the participation of Native American tribal citizens in the
building of America is limited. It is popular belief that American Indians were and are
lazy, ignorant, anti-government and do not understand how to embrace concepts of
European economic development. This is a misconception that has been written into
history about Native people on this continent. In fact Native populations, directly after
contact, were participating in global trade. Both the North American Native people and
Europeans were purchasing each others’ products that were not in their consumption
baskets prior to contact. Both parties were participating in the trade and purchase of
these items. For example, beaver pelts were a popular item from North America and
were in great demand in Europe.
This is one story that illustrates exactly how Native people understood, adopted and
integrated the European ideal of economic growth into their societies. To date,
researchers are uncovering accounts about the Native population and their true
participation in the economic growth of this continent. Carlos and Lewis (2001)
contradict much that has been written about Native Americans as producers and
consumers.
During the 18th century Carlos and Lewis (2001) state that there was a change in
consumption patterns for the Native Americans and the European settlers due to the items
5
that were traded and adopted from each party. More items were owned from purchasing
than being inherited during this period, signifying greater wealth. There was an increase
in purchasing ornamental items such as books, clocks, and utensils versus the necessary
survival items. Europeans started incorporating a new diet in their daily lives. Examples
of these new staple food items were tea, molasses, and sugar. The consumption baskets
for European settlers and Native Americans were transitioning into something new
during this period. This new transition spilled into Europe with items provided from
North America. Native Americans provided beaver pelts and other furs for their main
trading product. They would go to Hudson Bay, located in Manitoba, Canada, and trade
for household goods such as knives, axes, awls, and cloth as well as other popular items.
The trading post would try to keep items stocked for their Native American customers.
The Hudson Bay trading post was the main source of providing furs to the European
market. Beaver pelts were in high demand and the Hudson Bay trading for furs was
managed from Europe. The Native people were the only providers of these pelts during
this time. They were participating in economic exchanges and answering to supply and
demand.
One of the things that had an effect on trading was the price offered for the furs. The
Native traders would bring in fewer pelts when prices of pelts were high and many times
they would only bring in enough pelts to trade for necessary items, excluding luxury
items. Carlos and Lewis (2001) infer that Native Americans were contributing members
of the economic growth of this country. They were main players during the fur trade
years. This economic participation of Native Nations is an example of a model that
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worked. This was a time that Native people were participating in the economic
development of this nation by their own means. They were making their own choices of
participation and had no laws governing them and restricting their activities. They were
free to choose how they were going to make their living. Key point: they were free to
choose based on their own competitive advantage and skill set.
This research suggests that one of the ways the Native American population was
participating in the economy during this time was to supply the European and British
economy with highly sought after furs from North America. Much of this economic
participation was not highlighted in American written history. Much of what was written
was about the savage and the drunken, scalping warrior. Native tribes however have a
very different account of American history; theirs was passed on in an oral tradition.
European accounts and written American historical accounts unfortunately leave out
much of the Native participation in the building of this country. Students of history are
left to decipher the ethnocentric biases of history and piece together information to try
and get an accurate view of what really happened in this country.
Prior to European contact in 1492 there were only three Indigenous groups that were
documented to have ideographic glyphs, the Olmecs, Mayas, and Zapotecs located in
Mexico and Central America (Cicarelli, 2012, p. 78). The additional tribes in North
America had an oral tradition where their societal norms and thoughts were passed on by
means of intergenerational communication. Because of this, much of the cultural
identities and histories are subject to interpretation and judgments by outsiders. As
pointed out by Cicarelli (2012), the observers’ interpretations of a society’s culture,
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institutions, and viewpoint are subject to ethnocentric bias and other interpreted
limitations. “A basic tenet of intellectual history is that an analysis of thought and the
processes producing it require an understanding of the thinkers’ cultural environment”
(Cicarelli, 2012, p. 77).
Cicarelli uses economic anthropology as the focus for his research. He describes two
different approaches to this, formalism and substantivism. Formalism is an approach that
is focused on mainstream economic thought based on scarcity, trade-offs and opportunity
costs. Substantivists are culturalists and do not agree with the formalist view.
“Substantivists maintain that each preliterate economy is an entity unto itself and needs to
be studied accordingly” (Cicarelli, 2012, p. 80). The author asks if economic behavior is
innate or acquired. He continues on to say, “Economic behavior is instinctive as all
persons or groups confront choices about resource allocation” (Cicarelli, 2012, p. 81).
Economics is the study of human behavior not a study of society’s beliefs. However,
Cicarelli (2012), notes the way choices are made about consumption, production and
distribution within the context of society essentially is learned or acquired. Amerindians,
a term the author uses for Native American tribes, are what he calls stateless societies.
There were family groups that banded together to create small or large villages. The head
of the household was the go-to person or the decision maker. Generally there was a
higher population density where food sources were more prevalent and smaller societies
where food was scarce. Human capital and labor was based on the age and gender of the
individual villagers. Everyone in the village was expected to work and did so
communally. Most of the labor in Native societies was based on gender. Jobs were
8
divided based on these village gender roles. Economic success and growth pre contact
was based on human capital and the availability of resources. Trade and bartering were a
big part of tribal economics as well as hunting, farming and fishing. Economic
development and growth in agricultural societies was advanced with the creation of
irrigation canals and the plotting of land for farming. An additional use of land tenure
was the use of burning to manage and sustain the environment. Burning was another way
that they created a richer landscape of grasses and such to get more animals grazing in
their aboriginal hunting areas. Much of the economy was focused on sustainability.
There was a cultural focus on sustainability, no over fishing, no over harvesting trees, or
over hunting, etc. The author Cicarelli (2012) states that the Amerindians were practiced
in manipulating their environments and they had a Zen like approach to their
consumption patterns. It is noted by Cicarelli (2012) that Native tribes embraced the
Golden Rule. Villages that were flourishing during this period in their economic growth
and the cultural economy were part of the Iroquois Confederacy.
The Iroquois Confederacy included five different tribal entities or villages in the New
York area. They had an immensely effective agricultural economy with an egalitarian
cultural view. They had many women in leadership roles within the five confederated
tribes. They were mainly an agricultural society. Social status within the tribes was a
measure of wealth. The higher the leadership role within the confederacy the more
respected it was and the wealthier the individual. They used a type of shell called
wampum as currency for purchasing needed items. The early Euro American democratic
ideals were built from the Iroquois Confederacy. Specifically the Declaration of
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Independence and the Constitution are noted to come from the Iroquois Confederacy
ideals of democracy and diplomacy. This is an exemplary piece on how Native
Americans participated in the building of the American economy. This is a part of the
story that is often left out of the written history of America.
The Hudson Bay trading and the Iroquois Confederacy were both examples of how
Native people were prospering and developing viable plans for their communities. This
is evidence that they were functioning societies that had economic development playing a
huge part in the fabric of their communities. An additional note is they were doing this
by free will. They were choosing their path and making choices on their livelihoods
while incorporating tradition, culture and sustainability into their development models.
“People who do not fit into the liberal capitalist notion of individualism and economic
development simply vanish from the annals of history, though all American labor
histories should be complicated by the great ethnic and cultural diversity of the United
States” (Parham, 2012, p. 448). Parts that vanished and have been forgotten are the
positive pieces of the interactions between Native people and settlers such as the labor
provided to build this country. What is portrayed is the silent, ignorant savage which is
highly derogatory and is a negative historical portrayal. This is just one among the many
negative stereotypes. “Rarely have Native American histories been included in the
metanarrative of twentieth-century American economic history. It is rarer still for their
own economic histories to be examined individually for growth and change” (Parham,
2012, p. 449). To understand the Native American state of economics today on many
reservations we have to understand the piece that the historically negative representation
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of Natives has to play in the overall development. “Much of this has to do with the focus
on capitalism as the driving engine of historic economic development in the United
States, as well as the cant of conquest, which justified the taking of Native American
lands from poor unproductive Indians by superior productive Europeans” (Parham, 2012,
p. 449).
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THE MIDDLE PERIOD
Parham focuses her research on the Pacific Northwest tribal population and the human
labor they provided during the time when European settlers came. Her research
specifically covers the Pacific Northwest Native people and how they maintained their
cultural identity while also participating in the European economic culture.
The Hudson Bay Company that was participating on the East Coast beaver pelt
production and development also moved into the Northwest. They opened forts in Fort
Vancouver in 1824, Fort Langley in 1827 and by 1833 they opened Fort Nisqually, all
located in Washington State. Parham states that the Native people, particularly in the
Washington area, were active participants in economic growth and commerce. Chief
Seattle, a known leader, as well as other tribal people embraced the settlers and joined in
economic activities. Initially they were not idle participants who were forced onto
reservations but active community-building participants. “By the 1860’s working for
wages had become a regular part of the Indian economy” (Parham, 2012, p. 454). They
also incorporated their traditional commerce into the new Anglo commerce such as
selling baskets, wood, canoes, guided hunting trips, farming, etc. “In the 1850’s and
1860’s, as Anglo settlers arrived in greater numbers in Washington Territory, American
Indian communities worked to incorporate them into their kinship and economic
networks” (Parham, 2012, p. 455). During this time many of the European settlers
married into the tribes and became family members. They received large pieces of land
to develop after marrying into the families. Logging, mill work and fishing were some of
12
the main economic industries that Native people capitalized on and grew from. Native
Americans in the Pacific Northwest participated and thrived in the new economy.
“[They] found jobs and utilized wage labor in order to maintain their independence and to
make the best of a changing world” (Parham, 2012, p. 461). As time progressed however
things continued to change.
As more settlers came and wanted to inhabit the Seattle area they pressured the federal
government to eradicate the Native American threat in the area. The government forced
the Native people in the Pacific Northwest onto reservations and forced them into
behaving as domestic dependent nations. They began to lose working opportunities and
their independence as tribal people. “In 1865 an ordinance was passed which banned
Native Americans from Seattle” (Parham, 2012, p. 462). During this time period it was
difficult for Native tribes to foresee their economic futures. This is the beginning of the
complexities of the laws pertaining to Native people while they were being forced onto
reservations.
During the time that tribal people were being forced onto a government-selected piece of
land that was usually barren and isolated they were also passing Acts that were deemed to
help Native Americans. In 1887 the Dawes Act was passed. This was a law that gave
Native families individual parcels on reservation land and were given private ownership.
Conditions of this law state if Native land owners gave up their cultural identities they
would be granted US citizenship; in effect they would become American citizens. Tribal
people received a certain amount of acreage on the small plot of selected trust land. After
all the allotments were given out the ‘left over’ land was available to European settlers to
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purchase. During the forced movement onto reservations and the Dawes Act there was
also the Homestead Act during this period. This was the great land run that was open to
European settlers looking to find a plot of land to call their own. The Dawes Act and the
Homestead Act did not benefit Native Americans, who overall lost about 90 million acres
of reservation land. This history of top-down, externally imposed, and managed efforts
to assimilate Native Americans on reservations has continued to be problematic for
economic development efforts.
In looking into the future to research how federal and state policy has affected Native
tribes a useful starting point is to examine present-day issues. Hand in hand with
economic prosperity is the level of education attained by the participants and the
historically negative force that education has played among Native Americans. The
cultural view of educational institutions among Native tribes is usually one of distrust and
suspicion.
“Historically, educational attainment has often been associated with a decline in a tribe’s
cultural commitment” (Vinje, 1996, p. 437). This is historically and currently a belief
about education in Indian country. Education was forced onto Native Americans and the
motto was, ‘kill the Indian, save the man’. Children were taken from their homes and
usually placed thousands of miles away in an Indian boarding school with deplorable
living conditions. Native children were punished and disciplined if they spoke their
language or participated in any of their cultural traditions. A popular punishment was to
chain children to a tree all night in the graveyard. All Indian boarding schools had
graveyards filled with children who died while attending the Western school.
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THE CURRENT PERIOD
While many Native Americans still hold the belief that education is the destructor of
culture, some are trying to educate their tribes. Vinje (1996) has done research on
education and its connection to Native American poverty. His research, using census
data, covered twenty-three reservations for three decades, (1970, 1980, and 1990).
According to Vinje (1996), “Education, as an indirect approach to economic
development, appears to consistently be one of the more important priorities that tribal
leaders can stress in their attempts to reduce family poverty rates” (p. 427). Vinje (1996)
proposed that development programs work to improve living standards on reservations.
Also Vinje (1996) states the objective of a Basic Needs development program is
to improve the living standard of reservation’s population. An important aspect to
the Basic Needs approach is that of education. Increasing the population’s
educational attainment level will aid directly in improved living standards through
better health and nutrition, and indirectly through the creation of a labor force
better able to meet the job requirements of economic development projects. (p.
436)
For example Vinje (1996) did regression analysis on a percentage of the Native
population on the twenty three reservations, that were 25 years or older and have
completed high school. He used high school completion as the independent variable: in
1970 education explained 48 percent variation of reservation poverty levels and in 1980 it
explained approximately 50 percent of variation, in 1990 it was 52 percent. “Clearly,
15
educational attainment, as measured by this variable, is the single most important
explanation for the pattern of poverty rates found on the twenty-three reservations
covered here” (Vinje, 1996, p. 437). In this research education is a factor that plays into
poverty on reservations. There are tribal programs that do work on getting their tribal
members interested in higher education. There are government programs as well, but
again there are issues with government programs and Native tribes.
MODELS THAT HAVE FAILED
Top-down external managers and programs have only sought to increase their own
utility. There aren’t many instances where the top-down management model has worked
in Indian country. The element of Native culture is usually overlooked and disregarded,
reducing the ability to effect strong economic models in Native tribal communities. As
well as the issue of culture there are additional top-down management issues.
Rachel L. Mathers (2012) states two main problems from top-down state-led economic
development pertaining to Native tribes: an inability to forecast economic outcomes and
an issue of political allocation of resources. She discusses how tribes and states are too
distant and the misunderstanding between them is immense. The US government doesn’t
understand how to bridge this gap and achieve desired outcomes. Mathers (2012) states
“property rights, along with sovereignty, are the key to successful economic development
on American Indian reservations” (p. 67). Programs that are implemented on
reservations are implemented in ways that do not take the tribal cultural view into
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consideration. The government tries to conduct economic development projects that fail
to meet the needs of tribal communities. For example “economic development on
reservations, [should be] an approach that emphasizes tribal sovereignty and institution
building as opposed to the standard approach, which is often short term and under the
control of individuals outside the reservation” (Mathers, 2012, p. 67). This is a strategy
that is set up to fail from the beginning.
“Myriad examples illustrate the state’s inability to engage in rational economic
calculation when selecting and implementing economic development projects on
American Indian reservations” (Mathers, 2012, p. 71). The US government is unable to
meet demand and they are unable to acquire profit and loss accounting when they fund
projects to Native tribes. The documentation of spending and outcomes is an absent area
and because of this the government is unable to perform economic calculations. There is
no hard data that assess ongoing questions and/or issues. There is a lack of specific
government requirements for tribes when reporting on economic development or
forecasting. After the initial granting of funds there is no direct follow up. For example,
according to Mathers (2012) the Economic Development Administration (EDA), a
government entity, directed to work for tribes, funded a $1.3 million dollar investment to
build a cultural center that was virtually empty three years later only housing a smattering
of offices and a yearly arts and craft faire. However the EDA official report states the
venture was a success. Millions of dollars have been poured into Native tribes for
building infrastructure but there are no follow-up development plans after this. The tribes
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and the EDA lose money and this is because of not conducting profit and loss accounting,
according to the article. There is no initial strategic planning and no follow up.
“The economics of bureaucracy sheds light on some pitfalls in economic development
planning outside the market. This body of analysis assumes that bureaucrats behave like
other self-interested individuals. They are not able to ignore their self-interest for the
sake of the greater good” (Mathers, 2012, p. 74). This is an interesting statement and it is
important. It appears the bureaucracy of the government is not primarily motivated to
lend tribes a helping hand but rather to invest with an expected return. This conflict of
interest is a perpetual problem in Indian country where the government or other thirdparty bureaucrats become involved in development projects without existing ties to the
community and with a lack of accountability for failed development. Since the inception
of government intervention on tribal lands in the name of economic development,
corruption seems to have followed suit.
When the EDA reports on outcomes, overstating agency achievements seems to be the
norm as stated by Mathers (2012). When they overstate achievements it makes the EDA
more eligible for additional funding. “Thus, by maximizing the agency’s budget, a
bureaucrat simultaneously maximizes his own utility” (Mathers, 2012, p. 74).
Furthermore, “This system of bureaucracy, budget enlargement, and rent seeking has
contributed to the lack of economic development on many American Indian reservations”
(Mathers, 2012, p. 77).
Mathers suggests the corruption and ‘perverse’ granting agencies cause American Indians
to remain dependent on the federal government. Economic conditions for Native
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Americans haven’t changed for the past five decades and American Indians are still the
most poverty-stricken in the country. “Increases in resources committed to these goals
have not corresponded to increases in economic well-being for American Indians”
(Mathers, 2012, p. 77). It is shown “that throwing more money at the problem without
changing the rules of the game will not have the desired effect and, in fact, may have the
opposite effect” (Mathers, 2012, p. 77). Additionally, evaluating economic success is
relative and it depends on the view of the evaluator. Issues to take into consideration
from the evaluator are political position, theoretical frame, values, cultural orientation
and mind-set as pointed out by Kusel and Middleton (2007).
MODELS THAT ARE SUCCEEDING
A comprehensive evaluation of economic development in Native tribal communities
requires an understanding of why certain projects work and why others don’t. Kusel and
Middleton (2007) note that projects that are culturally-fitting, community-based and meet
tribal goals have proven to be successful; the North Economic Adjustment Initiative
(NEAI) is one example. President Clinton set aside $1.2 billion dollars in 1993 for an
economic development plan that the NEAI was to carry out. The NEAI funded six tribal
communities in the Pacific Northwest: the Makah, Skokomish, Omak, Warm Springs,
Hoopa and Happy Camp. NEAI goals were to reach out to these communities and help
timber workers on transitioning, diversify in the timber sector communities, and provide
support on rebuilding those communities.
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NEAI used a capital framework to analyze the community’s abilities. When responding
to external and internal stressors they focused on six elements: physical capital, financial
capital, natural capital, human capital, cultural capital and social capital. This framework
was used to “understand the process of capacity building, [which] is, determining a
community’s needs and strengths and developing ways of using the strengths to meet the
needs” (Kusel, Middleton, 2007, p. 167).
NEAI’s granting process is worth noting because it was tribal specific. They took into
consideration the cultural context of tribes applying for resources. For example, “An
effective tribal governance structure is marked by (a)institutions that are reflective of and
congruent with cultural norms; (b) the formal separation of powers, including an
independent judicial system and effective conflict resolution systems; (c) tribal control
and sovereignty; and (d) institutions with power and teeth to enforce agreed on rules”
(Kusel, Middleton, 2007, p. 168). In order for these objectives (a-d) to work tribes
needed to look within and evaluate their own traditions and incorporate them into this
framework to potentially have a positive outcome. The NEAI invested in six different
types of economic development projects with the tribes:
1.
Natural resource enterprises: mills, marina, nurseries, non-timber forest
products;
2.
Restoration projects: training for displaced timber workers and ecological
restoration;
3.
Macro infrastructure: laying the groundwork for future developments;
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4.
Business support services: industrial recruitment, fostering local firms,
overcoming limitation in scale and scope;
5.
Loan programs: loaning from a re-granting institution, providing secondary
loans to community members;
6.
Cultural programs: strengthening tribal culture, building local cultural and
social capital.
The impact of NEAI’s efforts when working with the tribes was positive and successful
according to Kusel and Middleton (2007). The authors also state, “A combination of the
capitals’ approach and the governance approach offers a useful framework to evaluate
projects by assessing the project in terms of the six capitals to determine, what, if any,
community capacity is being developed and paying particular attention to the
development and function of sovereign tribal governments” (Kusel, Middleton, 2007, p.
176).
FUTURE OPPORTUNITIES
President Obama also made a commitment to Native Americans through the American
Recovery and Reinvestment Act of 2009, which earmarks $40 billion dollars for Native
tribes. His administration is, as well as tribes, focused on economic development and
sustainable projects. Dreveskracht (2013) states Indian lands have significant potential
for energy management and development. He also notes that American Indian land is the
most economically impoverished and underdeveloped land in the country. He proposes
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solar power initiative projects for reservation communities. Potentially this could be an
excellent venture for tribal governments.
Dreveskracht (2013) discusses the term practical sovereignty, or putting the development
decisions into tribal hands, and that self governance equals accountability. Tribes have
more to lose and gain when they manage their own development ventures. Also it is
important to note the tribes have and can build capable institutions and can demonstrate
successful economic development especially when the tribal administration is supported
by the tribal community. Dreveskracht (2013) as well as other researchers suggest that
tribes need to regain their cultural identities by embracing sovereignty and self
determination.
As presented in the previous discussion on historical economics and Native tribes
Dreveskracht (2013) points out that economic growth and culture are not in opposition.
There needs to be a realization that the two can work together. According to
Dreveskracht (2013), tribes would have an economic advantage by creating an extension
on the tribe, such as a Section 17 corporation or a tribal chartered entity. This would
enable them to generate revenues while exercising their tribal sovereignty. He states that
because of the way the law is written and tribes are sovereign nations the Federal Energy
Regulatory Commission and the state cannot block solar projects on tribal lands. Tribal
solar projects can virtually override the complexities of navigating a system that is set up
for failure, by removing third party grantors running programs from the outside.
“Obama also has a clear intention to implement the Buy Indian Act whenever applicable”
(Dreveskracht, 2013, p. 131). The Act regulations are currently being finalized by the
22
Department of the Interior which oversees Indian tribal affairs. The Act will provide the
Indian Affairs (IA) office authority to put money aside for Native-owned and controlled
businesses. The Act will direct the Secretary of the Interior to employ Native American
labor providers when possible. The BIA has been consulting with tribes and this Act may
well get passed into law. An implication for tribes is that the Federal government will be
required to use Indian labor when pertaining to solar projects and will purchase Indian
generated solar power wherever the rule is implemented. The Obama administration also
has implemented the change of administrative position where borrowing start up dollars
will be subjected to federal regulation and control. The Obama administration has
created conditions for tribes to be able to use tax-exempt bonds for development projects
that relate to Tribal governmental functions according to Dreveskracht (2013). Tribes
will be able to use these bonds to subsidize solar projects on their land by their own
means.
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THE COMPLEXITIES OF SOVEREIGNTY
“Evidence shows that strong property rights to reservation and reserve land and natural
resources, whether communal or individual, are and always have been important
determinants of productivity” (Anderson & Parker, 2009, p. 105). Reservation land
tenure was imposed by the federal government onto Native tribes. There are various laws
governing any economic development on Native lands. The law that is supposed to rule
over Native tribes is the law of sovereignty. The federal government deemed tribes
sovereign. Sovereignty is the overall rule or rights to self govern; it is complete rule over
a territory. However this is far from the reality when looking at the complex laws and
rules pertaining to Native tribes.
PL 280 is a law that directly complicates the idea of sovereignty. “Public Law 280 (PL
280), which was passed in 1953 and implemented in the 1950’s and 1960s, forced some
reservations to turn over their judicial systems to the states in which they reside while
other reservations retained their judicial sovereignty” (Anderson & Parker, 2008, p. 642).
According to Anderson and Parker (2008) under PL 280 there are states that are
considered mandatory PL 280 states such as Alaska, California, Minnesota, Nebraska,
Oregon, and Wisconsin. Congress initiated this jurisdiction without tribal consent, which
has caused political turmoil with many of the tribes in these states. According to the
authors, PL 280 is important to economic growth and is what they refer to as the
sovereign paradox (Anderson & Parker, 2008, p. 647). Either tribes want to maintain
their sovereignty or they want to depend on the state to manage their institutional affairs.
24
Anderson and Parker (2008) state that there are two ways in which a tribe may
succumb to the dilemma of using its sovereign power to redistribute rents. First, a
tribe can change the terms of a contract ex post and avoid suit in an outside court
by claiming sovereign immunity. Tribes can attempt to avoid this dilemma and
create credibility by waiving sovereign immunity and allowing disputes to be
adjudicated by an outside court, but this option is limited and fraught with legal
uncertainties. (p. 647)
Pl 280 is one example of the complexities surrounding tribes. Either they are sovereign
or their sovereign rights get waived and are subject to state-led procedures which have
proven disruptive in the past. An additional law that also complicates sovereignty is the
Indian Gaming Regulatory Act (IGRA), passed in 1988.
Tribes that are not under PL 280, and tribes who are, still have to reach an agreement
with their states to implement a casino economic development plan. The Cabazon Band
of Mission Indians in the 1980s had a bingo parlor and card playing club on the
reservation in Coachella, CA. The state wanted to shut down their operation and the tribe
filed a lawsuit stating that it is illegal for California to shut them down due to the
sovereign rights of Native tribes. However, according to the state operating the gambling
site was punishable under the PL 280 law. This case ultimately went to the Supreme
Court. The Supreme Court ruled that the California laws were regulatory not prohibitory
and the sovereign rights of reservation tribes were recognized. It was also noted that
gambling was not illegal in California because by all accounts the lottery was considered
a form of gambling. This was a landmark case that claimed gambling could not be
25
regulated by the state and it began the economic development pattern of casinos for tribes
in the US.
Tribal institutional and economic growth is important, Anderson and Parker (2009) state,
“institutions and economic growth jointly cause each other” (p. 107). They suggest that
reservation institutions have to operate in a broader legal setting. Local, state, federal and
tribal governments all have to be on the same page in order to operate a productive
economic plan (Anderson & Parker, 2009, p. 107). This can deter many Native tribes
that don’t have the means and or knowledge on how to function within a bureaucracy.
This is why it is critically important for tribes to have a strong, functional institution.
Tribal entities need to build their tribal governments in a way that can easily manage and
navigate these bureaucratic complexities. “Our review of recent empirical studies
indicates that institutions are at the heart of a robust explanation for why some of these
economies prosper while others stagnate” (Anderson & Parker, 2009, p. 108).
The need to build institutions while navigating the complexities of the laws imposed on
them has affected Native tribes for years. Conceiving of and implementing a viable
development plan within the context of rules and regulations imposed on sovereign
nations is a difficult and a lengthy process. A current example of a viable economic
growth model is tribal casinos. When the federal government imposed the Indian
Gaming Regulatory Act of 1988 tribes and states had to work together and agree on a
‘compact’ in order to build casinos on sovereign land. Paradoxically, in order for tribes
to operate these economic development plans on sovereign land the residents of the state
of California had to vote on it. Tribes that do operate casinos pay millions of dollars to
26
the state every year, significantly undermining sovereignty in practice. Given the impact
of sovereignty laws and additional laws pertaining to tribes it is worth taking a quick look
at the development of these laws.
The John Marshall Trilogy consists of three landmark Supreme Court cases that
established the doctrine of sovereignty and Native tribes. Chief Justice John Marshall
was known as “the greatest judicial advocate of Indian sovereignty” according to Ciers
(2005, p. 20). These cases established the legal and political standings of Native
American federally recognized tribes.
An interesting part of the complexity with Native American status is federal recognition.
In the United States, a person is not legally considered an Indian unless they belong to a
tribe that is recognized by the federal government. This means that if someone lacks a
roll number they cannot receive any type of assistance the government provides to Native
people such as health care and educational scholarships. Ciers (2005) states, “[there are]
556 federally recognized tribes in the United States. There are another 300 Indian
nations that are not recognized by the federal government” (p. 17). Federally recognized
tribes are the only tribal entities who can have federal land and casinos. Not all federally
recognized tribes have a land base. While some have lost it, some never reacquired their
rights to their indigenous territory.
Tribes that maintained their land rights and tenure struggled for years through the various
law changes and constant shuffling from the bureaucracy and Euro-American
communities. In 1934 the Indian Reorganization Act passed into law. “The Act gave
Indians more power to manage their internal affairs and established a fund for land
27
purchases and educational assistance” (Ciers, 2005, p. 25). “In 1970, President Richard
Nixon outlined a policy of Indian self-determination” (Ciers, 2005, p. 24). Nixon
believed that American Indians would be better off if they managed their own programs
and responsibilities.
According to Ciers (2005) as of 2002, 221 tribes are managing 328 gaming facilities.
The Indian Gaming Regulatory Act of 1988 has had a huge impact on the self sufficiency
of tribes. Congress enacted this law for the purposes of helping Native tribes manage
their economic developments. This act requires tribes and states to negotiate compacts
together. There are three types of classes that tribal casinos fall in: class I is bingo; class
II is lottery, pull tabs, games of chance; class III is all types of gaming which includes
class I, II and slot machines, cards, and casino games (Ciers, 2005, p.31). The economic
impact of casinos for Indian tribes is varied. It is positive in some cases and
disheartening in other cases. Although tribes now have casinos according to Ciers
(2005), “Employment is scarce, and the unemployment rate is six times as high as the
national average” (p. 35). Somehow, the tribes need to develop an overall plan that will
not only take economic development into consideration but their cultural identities as
well. Development of an economic model of that will incorporate Native American
culture as well as sovereignty has proven somewhat difficult. There are various problems
and issues that cause development and stagnation.
Duffy and Stubben (1998) state, we recognize the deficiency of the economic
development theories; we believe other important attitudinal and structural
reasons retard economic development on Indian lands:
28
1.
The dependent-paternalistic relationship between the U.S. government and
the tribes encourages a passive posture and role in development;
2.
Inconsistent investment policies of the U.S. government over the years
make it difficult to attract capital;
3.
Cultural barriers foster fear – or at least hesitancy – among potential
private investors;
4.
At least some Indians are reluctant to adopt “foreign” concepts
incongruous with their traditional value systems. (p. 58)
Most of the land that Native American acquired was ‘given’ to them from the US
government and most times it is lacking in resources and is remote. However Duffy and
Stubben state (1998) that this isn’t entirely a reason for slow economic development as
some tribes who are rich in resources are still slow on economic development. Duffy and
Stubben (1998) believe there are much deeper structural and cultural problems
underlying issues of economic development on Native lands. They believe that the
constantly changing laws create confusion, foster distrust and undermine economic
planning. In addition, economic development is a constraint that is defined by the
dominant culture and causes a paradigm shift and the identity, culture and development
do not happen unless the idea of sovereignty is addressed. See Table 1 for some of the
laws that are causing this complexity.
Argued by Duffy and Stubben (1998), the view on economic development traditionally
has been viewed differently by Native tribes. For the European society there is emphasis
on “individuality, the profit motive, and material accumulation” and for Native people the
29
Table 1 Overview of Laws
Year & Title
Description of Law
1787
The Northwest
Ordinance
1830-1850
Indian Removal
Act
1832
Sovereignty
Worcester v.
Georgia
This ordinance stated Indians were to be treated with the ‘utmost
good faith’ and their land and property will never be taken from
them without their consent.
This act authorized the President to negotiate treaties and remove
almost all of the remaining eastern tribes and move them to lands
west of the Mississippi.
Ruling that Indian tribes are distinct political entities and their
rights are never disputed, they are the owners of their land from
‘time immemorial’, tribal authority is exclusive and they have all
rights to their lands, this is acknowledged by the US and it is
guaranteed.
Natives were forced onto government appointed land bases.
1850-1887
Reservation Period
1879-1960s
Boarding School
Era
1887-1934
The Dawes Act
1934
Indian
Reorganization
Act
1934-1970
Termination and
Assimilation
1953-present
Public Law 280
1975-present
Self Determination
Act
1988
Indian Gaming Act
Forced participation in Westernized boarding schools.
Government selected reservation allotments that were given to
tribal people.
Ended land allotments (Dawes Act) and returned unsold lands to
Native Americans.
Congress ended special relationship between tribes and the federal
government. They believed that Native Americans would be better
off assimilated individually into mainstream American society.
Federal law where States may assume jurisdiction over tribal lands.
Enabled government agencies to enter into select contracts with,
and make grants directly to, federally recognized Indian tribes. The
tribes would have authority for how they administered certain
funds.
Provides legislation for the operation and regulation of Indian
gaming, protecting gaming as a means of generating revenue for the
tribes, encouraging economic development of these tribes, and
protecting the enterprises from negative influences.
30
view is “oriented toward the collective and while the individual was important, he or she
was socialized to think in terms of the collective good” (p. 62).
“The Indian Gaming Act (1988) acknowledges sovereign right for economic
development purposes, but requires approval of state governments” (Duffy, Stubben,
1998, p. 65). However under the federal government tribes are deemed sovereign
entities. The concept of sovereignty is confusing and signifies the complexity of laws
and interpretation. What Native tribe after everything historically that they been through
wants to fight with the State for permission to develop project on their land. It’s
degrading and demeaning. As stated by Duffy and Stubben (1998), “Indians need to have
laws passed to give them permission to govern themselves” (p. 65).
31
CONCLUSIONS AND RECOMMENDATIONS
The core conflicts with economic development and Native tribes are the complex nature
of the laws that govern tribal entities. There are models that seem to work and models
that do not. When the tribes are self reliant and manage their affairs internally they seem
to fare better within economic development and growth. Tribes who are managed by
external entities seem to resist and not do as well. Sovereignty and education are main
barriers that cause economic stagnation. Both of these factors play a part in why tribal
growth models are much slower. There are serious complexities for any tribe wanting to
participate in economic growth on tribal lands. There is conflicting information on
institution building and development activities. Building strong internal institutions that
take cultural and traditional values into account seem to prosper. Whereas externally
imposed programs from top-down US government interaction does not. During the early
years tribes were strong and had their cultural strength and wanted to participate. Over
the years the colonization and government to government issues has caused the tribes to
stagnate in their economic growth. Often, they do not have the means to navigate
bureaucracy and laws in order to build economic development projects on their land.
Focusing on the history and how to change the future is imperative for tribal leaders to
understand. Many of the laws surrounding tribes need to be understood and deciphered.
There are many different points of view on the future of Native people and the discourse
is in the gray area. It is necessary that new policies are implemented and the government
to government relationship is respected as well as understood. In addition there should
32
be further research into development models that are working for tribes and how to
spread them across Indian country.
33
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