For Native American economic freedom, unravel the ‘white tape’

New television and movie releases offer a chance to reflect on how and why Native Americans went from relative prosperity to poverty, particularly over the last two centuries. 

Ken Burns’s “The American Buffalo,” a two-part series on PBS, ostensibly is about the near extinction of buffalo at the end of hunters’ rifles. The greater tragedy, however, is the story of how the federal government broke treaties and used the buffalo carnage to force American Indians into near starvation and submission. 

Another tragic story is told in “Killers of the Flower Moon,” starring Leonardo DiCaprio. The three-hour epic depicts how murder and deception enabled white men to steal land and oil rights from the Osage Tribe in Oklahoma.

But the cause of Native American poverty goes far beyond these sad stories; it is embedded in Federal Indian Law by wrapping tribes in “white tape,” as the late Coushatta Tribal Chairman Ernest Sickey called their bureaucratic quagmire. In 1831, the U.S. Supreme Court declared Native Americans to be “wards” of the federal government, leading to aggressive suppression of cultural and religious practices that had important economic implications and were part of the heritage we should celebrate.

Unwrapping the white tape requires much more than bringing back the buffalo and righting the wrongs to the Osage. It requires removing the court’s antiquated assertion and undoing any notion that only the government can deem its so-called wards as “competent and capable,” words embedded in a law passed in 1906 that remain to this day.

Thanks to policies like these, tribal land and resources are held in trust by the Bureau of Indian Affairs and cannot be used without government permission. In one case, tribes in North Dakota missed out on millions of dollars from the fracking boom because trust lands required 49 regulatory steps before they could be leased, compared to four steps off reservations. Not surprisingly, 1 in 4 reservation Indians live in poverty and many survive on federal grants.

As our new survey of over 80 reservations confirms, the spirit of entrepreneurship survives on reservations but must be unwrapped from white tape.

Scoring these reservations on factors such as private land ownership, independent judiciaries, streamlined regulations and separation of powers, we found that residents who are afforded greater economic autonomy had substantially higher median household incomes. On average, those living with 10 percent more of these forms of autonomy earn over $2,500 more.

Reservations with relatively more say over their money and resources, such as Hoopa Valley in California and Mille Lacs in Minnesota, are among the most prosperous in terms of median household income. The opposite is true in reservations with less control over their own resources, which tend to be much poorer, such as the Ute Mountain Ute and Uintah and the Ouray in Utah. Across all reservations we surveyed, this dynamic was clear enough that it cannot be deemed a coincidence.

Policies allowing more individual indigenous control over these individuals’ own property — a worthwhile end unto itself — will incentivize productivity-enhancing investments and prosperity. Repealing antiquated laws that deny this, notably the 1934 Indian Reorganization Act, would be a start. When an impartial judiciary, armed with the right legal framework, protects property rights and supports the rule of law vital for commerce, local economic growth will follow. Reducing bureaucratic white tape will encourage on-reservation entrepreneurship by lowering costs for Native American businesses, generating more income.

Currently, far-off federal agencies administer health care, education, infrastructure and social services. With both their own resources and those directed to them, tribal self-governance holds the real promise of prosperity. Tribal authorities, accountable to their people, have the local knowledge of how and where to invest resources and generate future growth.

Further, supporting tribes in setting up their own impartial judicial systems will improve trust in local institutions, which is vital to incentivizing the investments needed to rise from poverty. Additionally, tribal judicial systems would be strengthened by more adequately funding native courts and law enforcement. The resulting impartial protection of property rights and corresponding support for the rule of law is as vital for commerce in the modern world as it was when our government initially failed in its promises to Native Americans.

The new documentary and movie are powerful reminders of how our government has treated American Indians. The time has come to right these wrongs by instead treating the continent’s first human inhabitants as competent, capable, sovereign people with the right to own their land and manage their lives.

Terry Anderson, the John and Jean De Nault Senior Fellow with the Hoover Institution, and Thomas Stratmann, a senior research fellow at the Mercatus Center and distinguished university professor of economics and law at George Mason University, are coauthors of “A Reservation Economic Freedom Index.”