IE 11 is not supported. For an optimal experience visit our site on another browser.

Study: Tribes see dramatic financial gains

From Indian Country Today: A new survey by the Harvard American Indian Project found striking improvement in tribal income, education and housing.
/ Source: a href="" linktype="External" resizable="yes" status="yes" scrollbars="yes"><p>Indian Country Today</p></a

Basically, sovereignty works. That is the overall message of a major new survey from the Harvard American Indian Project, which compared data from the 1990 and 2000 Census and found striking improvement in tribal income, education and housing.

Furthermore, new gaming wealth accounts for less of the change than expected. In one surprising finding, housing improved more for non-gaming tribes than gaming tribes.

The conclusion, said Harvard Professor Joseph P. Kalt, a joint author of the study, is that the impressive success derives from federal support for tribal self-determination, formally inaugurated by President Richard Nixon. Tribal gaming, he added, is a subset of this policy.

Economic gap remains
''If you look at the policy of self determination,'' Kalt told Indian Country Today, ''you would conclude that it is the best policy in 100 or 200 years for solid progress in taking the tribes out of poverty.'' He has added in the past that it is the only federal Indian policy ever to have shown any success.

There was some concern, in fact, that the gains shown in the study would obscure the enormous economic gap that remains between Indian country and the dominant culture. Co-author Jonathan B. Taylor noted that although real per capita income grew at a much faster rate for Indians than for the U.S. as a whole, it was still less than half of the national average. ''At the rate of the past decade,'' he said, ''we calculate it would take another 55 years for Indians to catch up.''

Kalt is Ford Foundation Professor of International Political Economy at Harvard's John F. Kennedy School of Government. He is also co-director of the Harvard Project on American Indian Economic Development, which has produced hundreds of studies of tribal governance and sponsors an annual award for outstanding tribal programs. Taylor, a Research Fellow at the Harvard Project, has also written a number of contract studies on the economic impact of tribal gaming through a private consulting group.

In releasing the report, Harvard acknowledged financial support from the National Indian Gaming Association but emphasized university and Kennedy School policy denying outside funders any editorial control over its content.

One of the most telling categories in the report was personal income. For Indians living on reservations, real (adjusted for inflation) per capita income grew 33 percent in the '90s, compared to the U.S. growth rate of 11 percent. Yet in 2000 the U.S. per capita stood at $21,587, compared to the reservation Indian's $7,942.

Source of money
Furthermore, this wasn't the fastest growth in recent decades. During the 1970s, the reservation income grew by 49 percent. But the difference is the source of the money. The '70s growth came largely from government programs, and when these abruptly ended in the Reagan years, reservation income dropped off too. By the end of the 1980s it had fallen by 8 percent. The '90s growth came in a period of continued federal cutbacks.

The '90s coincided with the surge of tribal gaming, in the aftermath of the Supreme Court's 1987 Cabazon decision and the 1988 Indian Gaming Regulatory Act (IGRA). Tribal casinos boomed from a $400-million industry to $14 billion over the decade. But casinos were by no means the whole story of the Indian economy. Kalt and Taylor used a series of methods to break out what was really going on and found to their surprise that in one broad look income grew faster for non-gaming tribes than gaming tribes. Eliminating distorting factors, they arrived at a growth rate of 36 percent for gaming reservations, three times the national rate, compared to 21 percent for most non-gaming reservations, nearly twice the national rate. Yet the annual income for the average Indian on most non-gaming reservations was still $350 higher than for the gaming reservations, $8,816 to $8,466.

This result might confound the stereotypes of the mass media, but it fits the realities of Indian country. Some of the most populous ''gaming'' reservations, such as Pine Ridge in South Dakota and the St. Regis (Akwesasne) Mohawk Reservation in Upstate New York, make relatively little profit from their remote casinos and for years actually suffered losses under previous non-tribal management. Some of the analysis used by Kalt and Taylor corrected for the extreme wealth earned by tribes with small populations and so gave a truer picture.

On the other hand, the experience of non-gaming reservations was skewed by the massive Navajo presence. The population of the Navajo reservations, the Harvard scholars noted, is three times the combined populations of all the other non-gaming tribes. With Navajos left in, the income growth for gaming and non-gaming tribes was much closer, 36 to 30 percent, indicating that the Din← were doing very well, in spite of their cultural reluctance to set up casinos. The cause of the Navajo success, said the authors, was beyond the scope of their study.

(Another wild card was Oklahoma, which had dissolved most reservations. Instead the Census measured Oklahoma Tribal Statistical Areas (OTSAs), which the authors noted encompassed most of the state, including Tulsa. For final comparisons, Kalt and Taylor excluded both OTSAs and the Navajo.)

"Catching the dream"
Their corrected picture was a bit surprising, especially on the indicators for housing. In several categories (crowding and homes with complete plumbing) they found greater improvement in non-gaming tribes. The percent living in crowded homes fell from 11 percent to 9 percent on reservations without casinos but stayed constant at 10 percent on those with them. The findings direct attention to another set of initials. Along with IGRA, Indian country is showing the benefits of NAHASDA, the Native American Housing Assistance and Self Determination Act passed in 1996, which turned federal housing funds over to tribal control on the model of state block grants,

Although it's hard statistically to show cause and effect, Jacqueline Johnson, executive director of the National Congress of American Indians, remembers the enthusiasm when she traveled among the tribes in the '90s explaining NAHASDA. ''You could see them catching the dream,'' she said.

Johnson and the Harvard authors emphasize, however, that the story is still glass half filled or half empty. Although poverty rates fell significantly in the decade for both non-gaming and gaming tribes (seven and 12 percentage points, compared to a drop of only one point for the U.S.), they still remain more than three times the national rate of 9 percent. (Again, the adjusted non-gaming poverty rate of 30 percent is lower than the gaming tribe rate of 34 percent.)

Kalt cautioned against using these figures to say gaming did not make a difference. Some of the most populous gaming tribes turned to casinos out of desperation and found that gaming suffered from the same economic liabilities, such as regional low income and remote location. Many non-gaming tribes, on the other hand, were already succeeding at other endeavors, such as ''prefabricated home manufacture, mall development, cotton production, remote IT support, coal mining, defense contracting, hazardous waste clean up, supermarkets, water bottling and scores of other businesses.''

''These non-gaming activities benefit concretely from Indian self-determination policies as well,'' he wrote.

It is this policy, of which IGRA is a part, ''that is driving the socioeconomic changes evident across Indian America,'' concluded the report.

''Prior research repeatedly indicates that devolution of powers of self-rule to tribes can bring, and has brought, improvements in program efficiency, enterprise competency, and socioeconomic conditions.

''Self-rule brings decision making home, and local decision makers are held more accountable to local needs, conditions and cultures than outsiders.''