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Harvard study shows dramatic gains

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Gaming just part of self-rule revival

CAMBRIDGE, Mass. - 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

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.

"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

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

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.

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 Dine 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.)

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

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

"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."