Key to Indian Development: Self-Government

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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.



The Tulalip Tribe in Washington State has made heavy investment in municipal services and has become the largest employer in the county. Here is the tribe’s new administration building.

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.”