In Restoring Indian Reservation Status: An Empirical Analysis, Michael Velchik, and Jeffery Zhang provide some of the most rigorous empirical evidence to date on the economic impact of reservation status. Although I discuss limitations to their data below, the article provides a welcome counterpoint to repeated arguments—to the Supreme Court, Congress, and elsewhere—that affirming reservation boundaries will destroy existing economies.
These assertions gained nationwide attention when the Supreme Court decided McGirt v. Oklahoma. The Court held that Congress had not erased the treaty boundaries of the Muscogee (Creek) Reservation. Lower courts soon applied the decision to hold that the reservations of the Cherokee, Chickasaw, Choctaw, and Seminole Reservations—which occupy the rest of eastern Oklahoma—remained as well. In briefing and oral argument, Oklahoma and its amici insisted that affirming reservation status would be terrible for the safety and economy of the area. I have worked on several reservation boundary cases now, and these kinds of arguments—what Velchik and Zhang call the Falling Sky thesis–are trotted out every time. And for good reason: the Supreme Court allowed current demographics to distort its interpretation of congressional intent in South Dakota v. Yankton Sioux Tribe, and Hagen v. Utah and created an entirely new rule to maintain state jurisdiction over tribal lands within the undiminished Oneida Indian Reservation. (Sherrill v. Oneida Indian Nation of New York.)
The McGirt majority, however, refused to let these “sadly familiar arguments” persuade it to “cast a blind eye” to the injustice of undermining treaty-promised reservations. It also cited the brief I helped write for the National Congress of American Indians, arguing that other non-Indian communities do just fine within reservation boundaries. But, four other Justices were worried that the sky really would fall. In a dissent authored by Chief Justice Roberts, they chided the majority for having “profoundly destabilized the governance of eastern Oklahoma” and creating “significant uncertainty for the State’s continuing authority” over areas “ranging from zoning and taxation to family and environmental law.” Since then, Oklahoma has tried to play on those fears (and on Justice Ginsburg’s replacement by Justice Barrett), filing over 40 certiorari petitions seeking to overturn McGirt.
Velchik and Zhang try to bring facts to bear on the stories litigants and judges tell. They characterize these stories as falling into four camps. First, the aforementioned Falling Sky model argues that reservation status is just bad for local economies. Second, the Economic Stimulus model responds that reservation status may actually benefit local economies. Third, the Uncertainty Shock model (which they somewhat charitably ascribe to the McGirt dissent) asserts that the uncertainty caused by the change will undermine local economies. Finally, what they call the Game Theory model posits that governments will recognize the benefits of cooperation and adjust to protect the economy regardless of formal authority.
Velchik and Zhang use a clever natural experiment to test these models. Looking at Oklahoma and five other areas where reservation status was litigated, they compare trends in GDP and employment in counties affected by the decisions with those in neighboring counties. (The other areas are the Omaha Reservation, whose boundaries were affirmed by Nebraska v. Parker, the Saginaw Chippewa Reservation, whose boundaries were settled by Saginaw Chippewa Indian Tribe v. Granholm, the Puyallup Reservation, whose boundaries were settled by Pub. L. No. 101-41 (1989), the Oneida Indian Reservation, a somewhat more complicated case where Sherrill v. Oneida Indian Nation of New York, undermined the impact of reservation status, and the Yankton Sioux Reservation, whose boundaries were diminished by South Dakota v. Yankton Sioux Tribe ) Although many factors may contribute to economic trends, by comparing both trends before and after the decisions and between the affected county and neighboring counties, they can significantly isolate the impact of the decisions themselves.
This is the headline: their data show no negative economic impact of reservation status. In some instances, employment trends even improved compared to neighboring counties, but the results were not statistically significant. As they say, the results are powerful evidence against the Uncertainty Shock model and tantalizing (but far from conclusive) evidence of the Economic Stimulus model.
Beyond undermining the Uncertainty Shock model, however, their analysis has significant limitations. One involves the time periods it covers. In each case, their analysis stops two years after the final decision regarding reservation status. This means that the data do not necessarily reflect the effect of reservation status itself but rather the effect of the sudden change in perceived status. This is a powerful counter to the Uncertainty Shock thesis, which is based on change alone. It is also some evidence against the extreme forms of the Falling Sky thesis: skies don’t usually take two years to fall.
Without a longer stretch of time, however, it is only weak evidence regarding the general economic effects of reservation status. The first two years after a change in reservation status may reflect expectations and uncertainty by economic actors, but the impact of legal changes caused by reservation status itself might well take longer to appear. The initial period after a decision may also be characterized by heightened efforts by all parties to avoid rocking the bus, providing unwarranted support for the Game Theory thesis. Measuring changes over a longer period, however, might introduce more differences other than the change in reservation status, limiting the value of the authors’ difference-in-difference analysis.
There also are some difficulties in how the authors treat decisions that certain lands lack reservation status. All of the decisions they consider involve cases in which states and local governments acted as though reservations did not exist. Therefore, a formal decision against reservation status—like that in South Dakota v. Yankton Sioux Tribe—is not a significant change in the status quo. Similarly, when the Saginaw Chippewa and Puyallup Tribes entered into settlements affirming parts of their historic reservations and ceding claims to other parts, the impact is generally to increase the area with de facto reservation status, even though earlier decisions suggested a larger area was in play.
Altogether, however, Velchik and Zhang shed important light on the heat of unsupported assertions of reservation status. Federal Indian law litigation far too often turns on such unsupported parades of horribles. May their work be followed by similarly creative and rigorous responses.
