Institutions and Economic Development

INSTITUTIONS AND ECONOMIC DEVELOPMENT Ezra Rosser* Introduction Though forty years have passed since the American Indian Law Review published Economic Development in Indian Country: What Are the Questions? by Professor Frank Pommersheim, many of the same challenges and questions about economic development remain. This brief Essay looks back at Pommersheim’s work, surveys the state of scholarship on economic development today, and offers a few ideas about the future of such work. To this day, economic development remains a backwater among law professors compared to sexier topics like criminal jurisdiction, civil authority over nonIndians, and whatever is the most recent opinion from the U.S. Supreme Court. But that does not mean that economic development does not matter— Pommersheim described development as the “paramount” issue in the world and in Indian Country—only that it fits awkwardly with the skill set and preoccupations of legal scholars.1 The facts on the ground can be sobering. Twenty-five percent of American Indians and Alaska Natives were below the poverty line in 2022, a rate significantly higher than any other group, and more than double the country’s overall rate of 11.5 percent.2 Relatedly, according to one expert, “the average reservation unemployment rate has been 50 percent for decades.”3 The Department of Housing and Urban Development’s most recent assessment of the housing needs of American Indians and Alaska Natives found that ten percent of such “households had plumbing and/or kitchen deficiencies” and * Visiting Professor of Law, Georgetown University Law Center, Spring 2024; Professor of Law, American University Washington College of Law. Thanks to Adam Crepelle and Frank Pommersheim for helpful feedback. The author is a non-Indigenous academic. 1. Frank Pommersheim, Economic Development in Indian Country: What Are the Questions?, 12 AM. INDIAN L. REV. 195, 217 (1987). 2. EMILY A. SHRIDER & JOHN CREAMER, U.S. CENSUS BUREAU, POVERTY IN THE UNITED STATES: 2022, at 4 fig.2 (2023), https://www.census.gov/content/dam/Census/library/ publications/2023/demo/p60-280.pdf. 3. Adam Crepelle, Federal Policies Trap Tribes in Poverty, 48 A.B.A. HUM. RTS. MAG., no. 2, 2023, at 8, 8, 48 HUMRT 8 (Westlaw), https://www.americanbar.org/groups/crsj/ publications/human_rights_magazine_home/wealth-disparities-in-civil-rights/federalpolicies-trap-tribes-in-poverty/. 1 Published by University of Oklahoma College of Law Digital Commons, 2025 2 AMERICAN INDIAN LAW REVIEW [Vol. 49 an additional eleven percent of such households were overcrowded.4 Focusing on just one tribe, the per capita income on the Navajo reservation is persistently roughly a quarter to a fifth of the average income in the United States,5 and thirty percent of residents do not have running water.6 More than half the people in Oglala Lakota County, South Dakota, located entirely within the Pine Ridge Reservation, live below the poverty line, unemployment is “in the 80% range,” and the high school dropout rate is “over 60%.”7 Far too many tribal members suffer from the often debilitating effects of widespread poverty, lack of economic opportunity, and poor housing conditions on their reservations.8 In the four decades since Pommersheim’s article was published, there of course have been changes in the economic fortunes of some tribes. Indian gaming took off, giving quite a few tribes located near non-Indian population centers a sudden infusion of cash. Other tribes found success through government contracting or by empowering dynamic entrepreneurs who were 4. U.S. DEP’T OF HOUS. & URB. DEV., HOUSING NEEDS OF AMERICAN INDIANS AND ALASKA NATIVES IN TRIBAL AREAS, at xix (2017), https://www.huduser.gov/portal/sites/ default/files/pdf/HNAIHousingNeeds.pdf. 5. See Navajo Tribal Utility Auth., Light Up Navajo IV & Mutual Aid Training, at slide 4 (Aug. 7, 2023) (PowerPoint presentation), https://www.nmlegis.gov/handouts/WNR%200 80723%20Item%202%20NTUA%20Light%20Up%20Navajo%20and%20Mutual%20Aid. pdf. 6. Brief of DigDeep Right to Water Project and Utah Tribal Relief Foundation as Amici Curiae in Support of Respondents at 3, Arizona v. Navajo Nation, 599 U.S. 555 (2023) (No. 21-1484), https://www.supremecourt.gov/DocketPDF/21/21-1484/254361/20230208163233 914_DigDeep%20UTRF%20Amicus%20Brief%20-%20final.pdf. 7. Written Testimony of Julian Bear Runner, President of the Oglala Sioux Tribe, to the Subcommittee for Indigenous Peoples of the United States, House Natural Resources Committee, During the Hearing on Tribal Infrastructure: Roads, Bridges, and Buildings, at 1 (July 11, 2019), https://www.congress.gov/116/meeting/house/109756/documents/HHRG116-II24-20190711-SD004.pdf. 8. It is beyond the scope of this Essay to fully present all the ways poverty impacts children and adults but the downstream consequences of poverty in terms of development, health, and outlook are significant. See Emily R.D. Murphy, Brains Without Money: Poverty as Disabling, 54 CONN. L. REV. 699, 719-36 (2022) (discussing the impacts of poverty on child development); STEVEN H. WOOLF ET AL., URB. INST., HOW ARE INCOME AND WEALTH LINKED TO HEALTH AND LONGEVITY? 1-4 (2015), https://www.urban.org/sites/default/files/ publication/49116/2000178-How-are-Income-and-Wealth-Linked-to-Health-and-Longevity. pdf (exploring the impact of poverty on health outcomes); Sari Horwitz, The Hard Lives — and High Suicide Rate — of Native American Children on Reservations, WASH. POST (Mar. 9, 2014), https://www.washingtonpost.com/world/national-security/the-hard-lives--and-highsuicide-rate--of-native-american-children/2014/03/09/6e0ad9b2-9f03-11e3-b8d8-94577ff66 b28_story.html (highlighting the problem of suicide among Native youth). https://digitalcommons.law.ou.edu/ailr/vol49/iss1/2 No. 1] INSTITUTIONS & ECONOMIC DEVELOPMENT 3 able to create engines of growth across diversified sectors of the economy. But as the statistics above demonstrate, economic growth has proven elusive for many tribes even as the scholarship surrounding what leads to tribal economic development has continued to expand. The core lesson from Pommersheim’s article is that the best approach to development for each tribe will depend on its history and community expectations—something summarized by Professor Douglass North as the notion that “institutions matter”—rather than on broad theoretical pronouncements divorced from the realities of reservation life.9 This Essay proceeds in three parts. Part I: Past gives an overview the main takeaways from Pommersheim’s 1984 article. Part II: Present provides a bird’s eye view of the work done by legal scholars on tribal economic development from 1984 until today. And Part III: Future offers a few ideas about scholarship about tribal economic development work going forward. I. Past Though Pommersheim framed his article as an exploration of the questions related to economic development in Indian Country, the article rejects the imposition of (...truncated)