Dominic P. Parker

Sovereignty, Credible Commitments, and Economic Prosperity on American Indian Reservations

American Indian reservations are islands of poverty in a sea of wealth. Because this poverty cannot be explained solely by natural resource, physical, and human capital constraints, institutions are likely to be part of the explanation. One of the institutional variables is the sovereign power of tribes, which allows tribal governments to act opportunistically. The potential for such opportunistic behavior can thwart economic development if tribes are unable to make credible commitments to stable contract enforcement. One avenue for credible commitments is Public Law 280, which required some tribes to turn judicial jurisdiction over civil disputes to the states in which they reside. Using data for 1969–99, we find that per capita income for American Indians on reservations subject to state jurisdiction grew significantly more than it did for Indians who were not.

Economic development lessons from and for North American Indian economies

This paper reviews the literature on economic development as it relates to indigenous people in the United States and Canada, and focuses on how institutions affect economic development of reservation and reserve economies. Evidence shows that strong property rights to reservation and reserve land and natural resources, whether communal or individual, are and always have been important determinants of productivity. Political and legal institutions that are perceived as stable and predictable to tribal members and to non-Natives also improve economic opportunities for indigenous people living on reservations and reserves. Research reviewed here also shows that culture and acculturation are important in the development process. Although our emphasis is on North America, the findings are applicable to indigenous people in other parts of the world and shed light on growth questions that loom large for developing countries around the world.

Reforming Fisheries: Lessons from a Self-Selected Cooperative

We analyze a policy experiment in an Alaskan commercial fishery that assigned a portion of an overall catch quota to a voluntary co-op, with the remainder exploited competitively by those choosing to fish independently. Unlike the individual quota system advocated by many economists, the policy encouraged coordinated fishing and did not require a detailed assignment of rights. We model the decision to join and behavior under cooperative and independent fishing. The data confirm our key predictions: the co-op attracted the least skilled fishermen, consolidated and coordinated effort among its most efficient members, and provided shared infrastructure. We estimate that resulting gains in rent were at least 33 percent. Some independents were disadvantaged by the co-op’s formation, however, which prompted them to oppose it in court. We analyze the source of their disadvantage and provide guidance for designing fishery reform that leads to Pareto improvements, enabling reform without losers.

Encumbering harvest rights to protect marine environments: a model of marine conservation easements *

We adapt the concept of a conservation easement to a marine environment and explore its use to achieve conservation goals. Although marine environments generally are not owned, those who use them for commercial fishing often are regulated. These regulations grant harvesters rights to use marine environments in specified ways, and the possibility of encumbering these rights to achieve conservation goals creates a potential role for marine easements. We examine this potential under alternative fishery management regimes and find, generally, that marine easements tend to be most effective when harvest rights are delineated most fully. Our analysis suggests ways the marine easements can have flexibility and transactions cost advantages over other approaches to achieving marine conservation goals. We also propose ways in which the design of laws allowing marine easements should follow, or depart from the design of laws authorizing conservation easements on land.

Lessons in fiscal federalism from American Indian nations

Since Native Americans were relegated to reservations in the nineteenth century, their governance structures have been dictated largely from Washington, leaving little room for an optimal mix of tribal, federal, and state control to evolve. This chapter explores the optimal mix with respect to law enforcement and natural resource management. The key advantages of decentralized tribal control lie with its conformity to local norms of legitimacy, and with its better incentives for maximizing returns from local resources. The key advantage of the larger nodes of government lies with scale economies in resource management and in the provision of a uniform rule of law. Based on these tradeoffs, we argue that some responsibilities are ill-suited for non-local control (e.g., jurisdiction over reservation crime) whereas others are well-suited (e.g., jurisdiction over commercial contracts involving non-Indians). We explain why local jurisdiction over contracts, and top-down control of natural resources by the federal government, can stunt economic development on reservations. We evaluate these arguments by reviewing empirical studies, and by analyzing a novel reservation-level panel data set spanning 1915–2010. The evidence from both sources suggests the current mix of governance authority – which has largely been imposed on tribes rather than chosen by them – has slowed income growth. We conclude that tribes should be free to choose a different system of federalism and we identify some potential barriers to a freer choice.

Unintended Consequences of Sanctions for Human Rights: Conflict Minerals and Infant Mortality

Are victims of human rights abuses better off with or without economic sanctions targeted at their perpetrators? We study this question in the context of a US human rights policy, the conflict-minerals section of the 2010 Dodd-Frank Act. By discouraging companies from sourcing tin, tungsten, and tantalum from the eastern Democratic Republic of the Congo, the policy has acted as a de facto boycott on mineral purchases that may finance warlords and armed militias. We estimate the policy’s impact on the mortality of children born before 2013 and find that it increased the probability of infant deaths in villages near the policy-targeted mines by at least 143 percent. We find suggestive evidence that the legislation-induced boycott did so by reducing mothers’ consumption of infant health care goods and services.