Property institutions and business investment on American Indian reservations

Randall Akee and Miriam Jorgensen

Regional Science and Urban Economics, 2014, vol. 46, issue C, 116-125

Abstract: We test the hypothesis that property institutions are responsible for the persistent low levels of business and economic development on American Indian reservations. American Indian lands are held in trust by the US Federal government and may not be used as collateral. We exploit the uniform and equal distribution of land between the Agua Caliente tribe and non-Indians in Palm Springs, CA in our analysis. Due to the General Allotment Act of 1887, the land was divided in a checkerboard pattern with even-numbered parcels provided to Agua Caliente government or individual tribal members and odd-numbered parcels (held in fee-simple status) were sold to non-Indians. Because of this, we overcome the usual land quality selection problem between the two types of property institutions. We find that holding local amenities and other characteristics of the parcel constant, there is no difference in the level of business investment on trust and fee simple properties. These results indicate that the inability to use American Indian land as collateral does not drive the low levels of observed business investment; other mechanisms and institutions may be the culprit.

Keywords: Business investment; Land regulation; Property rights; Dawes Act (search for similar items in EconPapers)
JEL-codes: O12 P48 R14 R52 (search for similar items in EconPapers)
Date: 2014
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (8)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:regeco:v:46:y:2014:i:c:p:116-125

DOI: 10.1016/j.regsciurbeco.2014.04.001

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