Indian Reservations: Subsidies vs. Property Rights

The proposed Democratic spending plan would provide $20 billion more in subsidies for American Indian programs. Education, health care, and other services on reservations have been appallingly mismanaged for decades. New subsidies may help but they won’t get at the core problems resulting in reservations being among the poorest places in America.

The fundamental issue is the lack of individual property rights on reservations, which undermines incentives for investment and entrepreneurship. Other problems include excessive regulations and mismanagement by federal and tribal bureaucracies, as I examined in this study.

A new Wall Street Journal piece examines the lack of homeownership on Indian lands, and it reinforces these points on property rights and bureaucracy.

It usually takes a few months to write a mortgage. It once took Juel Burnette four years.

Mr. Burnette runs the Sioux Falls branch of 1st Tribal Lending, one of the few firms that specialize in making home loans on Native American reservations. The byzantine process winds through two federal agencies and tribal governments before it even reaches the banking system. Most lenders don’t even attempt it.