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Indigenous Capital, Growth, and Property Rights: The Legacy of Colonialism

  • Hoover Institution at Stanford University (map)

An Academic Research Workshop
Co-directed by
Terry L. Anderson, Hoover Institution Senior Fellow
Dominic Parker, University of Wisconsin Associate Professor.

Capital investment and property rights are generally considered Western concepts exported in the era of European empire building, but pre-colonial evidence from Africa and the Americas suggest that capital investment and property rights are part of the human experience. Europeans assumed the societies they encountered in the Americas lacked the institutions and intellect necessary to fuel economic growth. Careful examination of pre-colonial and colonial societies, however, offer a different perspective—a perspective that sheds light on how indigenous people around the world can renew their economies from the ground up, rather than answering the “siren call of federal handouts, as Alvin “A.J.” Not-Afraid, Chairman of the Crow Tribe, puts it.

In launching “new institutional economics,” Douglass North (1960, 53) emphasized that the “major role of institutions in a society is to reduce uncertainty by establishing a stable structure to human interaction.” That formula seems simple, but the fact that many countries remain poor today suggests that stimulating the necessary capital investments is not so easy.

For this reason and by North’s definition of institutions, there can be no question that American Indians had both informal and formal rules that promoted capital investment and productivity prior to European contact. At the individual level, Indians used varying degrees of private ownership or control of assets for everything from household goods, to horses, to hunting and trapping territories, to land. They marked territories with stones and trees, their horses with paint, their arrows with coloring, all designed to say this is mine and not yours.

Given the rich institutional history of Native Americans, why has capital investment lagged on reservations and what will it take to rejuvenate capital investment today? Put another way, what were the property rights structures in pre-contact American Indian societies, what happened to the rule of law that secures property rights that encouraged capital investment, and what will it take to rekindle the rule of law and property rights among Indian tribes?

The workshop will have three components:

1) Capital investment and economic growth in “old indigenous economies”;
2) capital investment in “colonial indigenous economies”; and
3) revitalization of capital investment for “renewing indigenous economies.”

For each of the categories, the project will commission scholarly papers from various disciplines including economics, political science, law, and anthropology. Sessions will include papers focusing on:

  • Examples of pre-colonial capital investment and the institutions that encouraged investment and growth, emphasizing that American Indians invested in natural resources to improve productivity—e.g. clam gardens on the Pacific Northwest coast, fishing wheels and weirs on salmon streams, rock walls to channel bison over cliffs or into surrounds, and cultivated fields to grow crops, to mention a few.

  • Analysis of how colonial institutions, especially trusteeship retaining title to resources by the federal government, prevent tribes from holding the important stick allowing transferability of title, thwart capital investment today.

  • Case studies illuminating how tribes can and have overcome the constraints on capital investment and improved reservation economies by expanding their jurisdiction, Examples include gaming compacts, internet business transactions, and foregoing sovereign immunity.

For more information, please email