This is an essay I recently wrote up for the Wilma Mankiller Fellowship, in its first draft. Enjoy!

Most unique advantages and disadvantages regarding tribal economic development stem directly from either the federal government, the surrounding state government, or from the ability of tribal nations to create wholly owned governmental corporations. Regulations surrounding tribal minerals and lands have largely inhibited tribes from considered development of mineral resources, and confuse the understanding of tribal environmental regulatory powers. State governments alternatively compete and partner with tribal nations, which makes state involvement a mixed bag. States have no authority over tribally owned businesses, and tribally owned businesses generally operate with legal protections similar to those of the tribe itself. Perhaps the most profoundly negative of these factors is the federal government.

The Federal Government’s regulatory role on Indian reservations has largely been toxic. The federal government has largely proved a very poor trustee, as shown via the relatively recent Cobell settlement case, which hinged on proving the criminal neglect and occasional malice in the modern trustee relationship. Aside from mismanagement via trustee status, the Federal Government must also approve the extraction of minerals, which creates a bureaucratic quicksand for energy companies attempting to operate on tribal lands. Tribal Governments often operate in parallel with state governments on these issues, as resources are often spread beyond the boundaries of the tribal land base. Energy companies often give much better deals outside of reservations, no doubt because they are dealing with tribal citizens, but also because of the additional bureaucratic friction that operating requires. Businesses owned by the tribe don’t have the same problems but protectionist states can band together to create federal laws which manipulate or regulate businesses in Indian Country.

The example of gaming comes immediately to mind because it exemplifies the reaction of states to competing, successful tribal businesses. Fear on the part of state governments manifested itself through IGRA, which now acts on the federal level to regulate tribal gaming operations. Individual states actually have very little power to no power to manipulate businesses on reservations, as the states do not have jurisdiction over tribal land.

The federal government acts as trustee on all transactions which involve the use of tribal lands and minerals. State governments can create partnerships or compete which can be an advantage when attempting to build a relationship to a state. Tribes may, and often do, choose to create government owned corporations, whose profits belong to the tribal government.

These tribally owned corporations can run businesses like casinos, which are highly regulated in many states, but are unregulated on the federal level. This is really where tribes can create an advantage, as they can use state regulations surrounding certain businesses to create a clientele among those in the surrounding state. Often, prices will be lower on goods which the state places taxes on as well, which gives the tribes the ability to setup competing businesses that will have built-in tax breaks. Further, these businesses can still take advantage of federal tax breaks to out-compete state businesses.