Tribal Economic Development and the Constitution

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Contact between non-Indians and Native American tribal nations largely destroyed the traditional economies of tribal nations, which included agriculture, hunting and fishing, and associated trade networks. Fish and game were slaughtered or depleted, tribal land bases and water resources were lost or placed under federal control, populations declined, and traditional sociopolitical organizations that structured economic activity were disrupted and replaced with an oppressive federal bureaucracy. Today, despite the presence of significant mineral, water, timber, and other assets on some reservations, most of the 554 Indian nations recognized by the United States experience severe poverty and related social consequences. Unemployment rates as high as 50 percent are common, with some tribes suffering 90 percent unemployment or higher.

The Constitution played a supporting role in the devastation of traditional tribal economies and the impoverishment of reservations. Although the Constitution makes few and cryptic references to tribes, the constitutional plan of federal supremacy over Indian affairs has emboldened the Supreme Court to develop a body of constitutional common law in this area. The grant of federal power over "commerce … with the Indian Tribes" in Article I, section 8, for example, has been embellished with notions of a federal guardianship over tribes to allow Congress nearly unlimited authority over internal tribal matters. Since the last decades of the nineteenth century, Congress has invoked this authority, also known as "plenary power," to support legislation abrogating treaty promises that set aside lands for the "perpetual" use of the tribes. For example, Congress constructed dams that flooded tribal lands, divided or allotted tribal lands for individual tribal members, and opened tribal lands for homesteading by non-Indians. Congress also used its broad power to impose bureaucratic restraints on tribal resource use, to open tribal timber and mineral resources for exploitation by non-Indians without market-rate compensation, and to dictate tribal constitutions that organize tribal governing institutions as well as the ordinances that tribal governments enact. Experts on tribal economic development, such as Joseph Kalt of Harvard's Kennedy School of Government, have shown that without tribal control over the management of tribal affairs and the use of tribal resources, sustained economic development does not occur on reservations.

Constitutional constraints on congressional action, such as the due process and just compensation clauses of the Fifth Amendment, have not provided substantial protection for tribal resources and rights of self-government against federal interference. A partial explanation for this failure is the fact that tribes do not fit comfortably into the philosophy of individual rights reflected in the Constitution. Tribes' important rights and resources are held communally, and social groups such as clans or religious societies, rather than individuals, are viewed as the constituent social and political units. In constitutional decisions of the Supreme Court, these differences have meant, for example, that aboriginal tribal lands are not viewed as " property " subject to just compensation in the event of expropriation unless Congress has "recognized" the tribal property claims by treaty or statute. Furthermore, federal conversion of tribal lands into allotted, individually owned lands has not been treated as a taking of those lands or a deprivation of due process or equal protection. Federal laws that single out tribes for restrictions on economic activities or that regulate tribal members directly do not fall under the weight of federal constitutional protections for racial or ethnic minorities because tribes are treated as political entities rather than racial or ethnic groups. At most, the Court has provided theoretical protection for tribes by fashioning a federal trust responsibility that is supposed to ground and color federal plenary power, and by insisting that Congress be explicit when it curtails tribal property and self-government rights.

Since the 1970s, the federal government has proclaimed policies encouraging tribal self-determination and economic development. Two doctrines within the constitutional common law of Indian affairs have helped advance this policy agenda. Both of these doctrines affirm and support tribal sovereignty. First, federal constitutional supremacy has precluded states from imposing many of their taxes and regulations within tribal territories unless Congress consents. The lucrative gaming enterprises found on some reservations stem from this limitation on state regulation. However, tribes are not wholly protected against state restrictions. Responding to states' concerns, Congress has chosen to exercise its plenary power with respect to gaming, and has afforded states authority to preclude or negotiate over certain forms of tribal gaming. Furthermore, the Court has said that states may tax reservation-based retail sales to nonmembers where products are merely imported onto the reservation to take advantage of tax exemptions. Second, tribes are recognized as governments that enjoy sovereign immunity, subject to congressional or tribal waiver. According to the chair of the Mississippi Choctaw Tribe, which has one of the most thriving economies of any Indian nation in the United States, tribal sovereign immunity has been essential in fostering economic development because it nourishes institutions of self-government and protects the tribe against costly litigation and potential bankruptcy. Thus contemporary tribal economic development is partly a legal artifact, born of constitutionally based doctrines reflecting the special status of tribes as governments engaged in business enterprises. These doctrines have created economic opportunities for tribes by conferring monopoly status in states where certain activities, such as waste disposal or gaming, are outlawed or heavily regulated. The new economic possibilities must be understood, however, in relation to a long history of economic devastation.

Carole Goldberg

(see also: American Indians and the Constitution.)


Clinton, Robert N. 1993 Redressing the Legacy of Conquest: A Vision Quest for A Decolonized Federal Indian Law. Arkansas Law Review 46:77–159.

Cornell, Stephen and Kalt, Joseph, eds. 1992 What Can Tribes Do? Strategies and Institutions in American Indian Economic Development. Los Angeles: UCLA American Indian Studies Center.

Deloria, Vine, Jr. 1974 Behind the Trail of Broken Treaties: An Indian Declaration of Independence. Austin: University of Texas Press.

Gould, Scott L. 1996 The Consent Paradigm: Tribal Sovereignty at the Millenium. Columbia Law Review 97:809–902.

Mohawk, John C. 1991 Indian Economic Development: An Evolving Concept of Sovereignty. Buffalo Law Review 39:495–503.

Worthen, Kevin J. and Farnsworth, Wayne R. 1996 Who Will Control the Future of Indian Gaming? "A Few Pages of History Are Worth a Volume of Logic." Brigham Young University Law Review 1996:407–448.

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Tribal Economic Development and the Constitution

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