# Two Approaches to Economic Development on American Indian Reservations: One Works, the Other Doesn't

### Citation:

Stephen Cornell and Joseph P. Kalt. 2005. “Two Approaches to Economic Development on American Indian Reservations: One Works, the Other Doesn't.” Joint Occasional Papers on Native Affairs, 2005.

### Abstract:

A revolution is underway in Indian Country as American Indian nations increasingly take back control over their own affairs and take responsibility for reshaping their futures—efforts that are leading to unprecedented economic success and the alleviation of poverty. Significantly, this success does not appear to be tied directly to the Native nations' asset bases or market locations. Instead, it is tied to their invention of a new approach to economic development, which the authors term the “nation-building approach.” This paper compares the “standard approach,” long supported by the U.S. government and by some Indian nations, to the nation-building approach. The two approaches are very different, and they have led to dramatically different outcomes. The standard approach has four leading characteristics. It is short-term and non-strategic; it lets outsiders set the development agenda; it treats economic development as fundamentally an economic problem, ignoring its political dimensions; and it views indigenous cultures as an obstacle to development. Decades of effort using the standard approach have produced little change in indigenous socioeconomic conditions. In contrast, the nation-building approach puts genuine, decision-making power in indigenous hands; it backs up that power with capable institutions of self-governance; it matches those institutions to indigenous political culture; it has a strategic orientation toward long-term outcomes; and it is guided by public-spirited leadership. Over the last twenty-five years, this approach has begun to produce significant improvements in reservation socioeconomic conditions.