Pathways from Poverty: Economic Development and Institution-Building on American Indian Reservations

INTRODUCTION Contemporary American Indian reservations are notable for, among other things, extreme poverty, a host of related social problems, and economies founded largely on transfer payments and governmental services. These signs of low standards of well-being-both economic and social-are enigmatic. Despite decades of professed federal and public concern and a seemingly endless flow of federal and private dollars, there is as yet relatively little sign of meaningful improvement on most reservations, or of the emergence of sustainable productive activity. American Indian tribes have significant sovereign powers, yet tribal governments are frequently ineffective. Most Indians apparently desire to maintain and build upon distinctive tribal identities and communities, yet social pathologies undermine many Indian societies with disheartening results. These problems are indicative of more than a lack of economic development. American Indian societies face problems of economic, social, and political underdevelopment. Some of the reasons for this state of affairs are readily apparent: the systematic expropriation of many Indian resources, for example, coupled with decades of paternalistic non-Indian controls over reservation affairs. But even aside from these daunting obstacles to economic progress, development remains a complex problem, and in the Indian case a particularly difficult one to get a handle on. The questions it raises go, in the deepest sense, to the sources of wealth and societal well-being of nations: What are the ingredients that are necessary for a society to improve its economic standard of living with social and political consequences that the members of that society find acceptable? How does a society accomplish a substantive economic transformation without losing control of its own desired character and direction