Native American incomes increased much faster than have incomes nationwide since the 1990s. The reason isn't gaming but self-determination, according to two researchers.
Beginning late in the last century, the economies of Indian nations in the United States began recording a remarkable turnaround.
Since the early 1990s, per capita income on Native American reservations has grown three times faster than have incomes in the nation as a whole.
American Indians are still poor — the poorest of any ethnic group in the nation, with 39% of the population living in poverty in 2000 and incomes less than half the U.S. average.
But the gains made among the 1.2 million people living in Indian Country have been dramatic. Something has been working in many Indian nations, according to two professors who have studied tribal development.
And their hope is that the key to such rapid progress won’t be changed by a new Congress.
Stephen Cornell of the University of Arizona and Joseph Kalt of Harvard University gathered their findings in a new paper, American Indian Self-Determination: The Political Economy of a Policy that Works. You can download the full paper here.
Cornell and Kalt find that the source of Native American progress over the last few decades is self-government.
Rising incomes can’t be attributed simply to casinos, greater federal spending or cultural assimilation, Cornell and Kalt show. Rapid increases in income took place only after powers retained by the federal government were given over to the tribes, beginning in the 1970s.
Yes, there has been a lot of publicity of casinos built on Indian land, but “gaming incomes have been concentrated in a relatively small number of tribes near major metropolitan patron populations,” the authors write.
The increase in Native American per capita incomes, meanwhile, has been found across Indian Country.
Per capita income increased 36% between 1990 and 2000 on reservations with casinos, compared to 11% in the United States.
But individual income increased 30% on reservations without gaming — less than on reservations with casinos but still nearly three times the national average.
In the 1990s, in fact, real Indian household income on reservations without gaming grew faster than household income on reservations with casinos.
Nor is the rapid increase in per capita income a consequence of increased federal spending. Federal spending on Indian affairs peaked in the mid-‘70s, according to Cornell and Kalt.
“By the early 2000s, the U.S. Commission on Civil Rights labeled the spending levels in Indian Country a ‘quiet crisis.’ The Commission reported that while American Indians were marked by the most severe poverty in America and had suffered treaty violations and other forms of deprivation over the centuries at the hand of the federal government, governmental spending in Indian America was dramatically and disproportionately below levels of funding provided to other groups in the United States and the general U.S. population.”
Finally, the authors find that the rapid economic progress in Indian Country isn’t a product of cultural assimilation. Cornell and Kalt find that increasing incomes is positively correlated with a “lack of cultural assimilation.”
Incomes aren’t increasing where there are large declines in the proportion of people speaking Native languages, for example. In fact, the opposite was true.
Cornell and Kalt mark the Indian Country turnaround to the passage of the 1975 Indian Self-Determination and Education Assistance Act.
Tribes began the chore of self-government haltingly, the authors write, but by the second half of the ‘80s, “self-determination had become a widespread and systematic restructuring of tribal governments and their relations with the federal government. This restructuring has acquired a name as the ‘nation building’ movement. It is being manifested by wholesale changes in tribal institutions and policies as the Indian nations themselves rewrite their constitutions, generate increasing shares of their revenues through their own taxes and business enterprises, establish their own courts and law enforcement systems, remake school curricula, and so on, across the panoply of functions commonly associated in the United States with state governments.”
Cornell and Kalt list the ways self-governing tribes have been more efficient, effective and innovative than when the federal government controlled life on the reservations.
The Potawatomi Nation in Oklahoma has reformed its courts to such an extent that surrounding non-Indian people are opting into the system. Many tribes have changed their schools so that childhood use of Native language is now higher than among adults.
The Winnebagos have businesses that produce $100 million a year in revenues in a conglomerate of businesses ranging from construction to financial services. The Tulalip Tribe has made heavy investments in municipal services in Quil Ceda Village and is now the second largest employer in the county.
“In the late 1970s, the material assets of the Citizen Potawatomi Nation consisted of 2½ acres of trust land, $550 in the bank, and an old trailer that served as the tribal headquarters,” Cornell and Kalt write. “Today, CPN’s assets include a bank, a golf course, a recently-opened casino, restaurants, a large discount food retail store, a tribal farm, a radio station, and more than 4,000 acres purchased by the Nation. CPN eschews per capita payments and, instead, channels its resources into services for citizens – from health care to educational and child development support, from a pharmacy to an award-winning small business development program.”
The old federal Bureau of Indian Affairs was a disaster. When tribes were given control of their own affairs, performance improved. Where tribes have taken control of local health care, waiting times have dropped, more new programs have started and payments from third parties have increased. Tribal citizens report greater satisfaction when policing is controlled locally.
Cornell and Kalt attribute these improvements largely to self-government.
“Many prior decades of federal management of virtually all tribal affairs found American Indians on reservations to be the most distressed populations in the United States,” they write. “Under self-determination, these conditions are, overall, being abated, sometimes at astoundingly high rates. Sustained economic growth has taken hold and is closing income gaps between Native Americans and the rest of U.S. society. Although still distressing, health, housing and education are generally on the upswing. Culturally and politically, self-determination has clearly empowered the Indian nations to assert themselves, and has enabled Native communities and their governments to begin to break long-standing patterns of dependency and second-class status.”
Cornell and Kalt write that Congress has supported tribal self-government because it fits the ideology of both Democrats and Republicans. “From a liberal perspective, self-determination clearly contains an element of support for human rights and decolonization for Indigenous people,” they write. “From a conservative perspective, self-determination is manifested in self-sufficiency, reduced dependency on the U.S. federal government, and devolution of formerly federal authorities to local governmental units.”
Over the years, Democrats have been willing to give social assistance. Republicans, meanwhile, have been supportive of devolving federal powers to local governments. Together, this has produced a successful policy in Indian Country that has lasted for decades.
Cornell and Kalt wonder, however, if changes in the Republican Party might end this unlikely bi-partisanship.
“(T)he oft-noted evolution of the Republican Party away from its libertarian strains and toward more aggressive support for social policymaking aimed at promoting particular conservative social norms and structures is suggesting a trend away from the Indian self-government movement,” Cornell and Kalt conclude. “We might well predict that the next change to Republican control of the U.S. Congress will signal an end to policies of self-determination.”