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Raid or Trade? An Economic Model of Indian-White Relations
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... Occupation through squatting, and then early homesteading, established meaningful and feasible property rights to the frontier for the United States and therefore encouraged U.S. land sales and other development. However, by 1890, the west was secure; the Confederacy, the British, and others were gone; and there was no serious threat of violence from Native tribes who had been decimated through military conflict, dispossession, and loss of numbers (Anderson and Mc Chesney 1994;Spirling 2012). ...
... First, as noted, homesteading was more likely on marginal lands. Second, previous studies have found that the U.S. desire for lands were primarily driven by relative military capacity and politics (Anderson and Mc Chesney 1994;Spirling 2012), and not agricultural viability. Both suggest that "taken" territories were not selected on land characteristics. ...
U.S. homesteading has been linked to establishing federal sovereignty over western lands threatened by the Confederacy, foreign powers, and the Indian Wars in the last half of the nineteenth century. However, the bulk of homesteading actually took place in the early twentieth century, long after these threats to federal ownership ceased. We argue that this “late homesteading” was also an effort to enforce federal rights, but in response to a different threat—a legal one. Questionable federal land policies in the late nineteenth century dispossessed massive amounts of Indigenous lands, and exposed the federal government to legal, rather than violent, conflict. Late homesteading was used to make the dispossession permanent, even in cases where a legal defeat eventually occurred. Examining the qualitative evidence, and using data on the universe of individual homesteads and federal land cessions across the 16 western states, we find evidence consistent with this hypothesis.
... Previous research rooted in public choice and new institutional economics has shown that federal American Indian policy has often had determinantal effects for Native American people. This includes studies about federal policies leading to natural resource loss (e.g., Feir et al., 2023, Leonard et al., 2020, Akee, 2020, constraints on property rights to land and natural resources (Anderson & Lueck, 1992;Leonard & Parker, 2021;McChesney, 1990), settler choices to raid or trade with indigenous people (Anderson & McChesney, 1994;Candela & Geloso, 2020), forced assimilation and mismatches between formal and informal rules of governance (Cornell & Kalt, 2000;Dippel, 2014), and centralized oversight of legal and political institutions on reservations (Anderson & Parker, 2008, 2017Frye & Parker, 2021). ...
Historically and currently, federal policies governing American Indian country do not typically resemble policies that economists think would stimulate economic and cultural prosperity. This special issue employs Public Choice and New Institutional Economics to analyze the origins and consequences of these policies. This approach, which emphasizes rent seeking, government failure, and formal and informal institutions offers new insights into the understanding of persistent barriers to prosperity and sovereignty in Indian country and what changes might be necessary to break down the obstacles.
... The American government's relationship with Native Americans, especially the centuries of effort to eradicate or assimilate Indians into white culture and institutions, also fits within our theoretical framework. Even though Indians had governments, property, and much to trade (Anderson & McChesney, 1994), the US Constitution did not recognize these institutions, thus, institutionalizing a permanent conflict between de jure and de facto constitutions. Indian governance institutions, despite great odds, endured (Lear, 2006). ...
Analysis of revolutions typically focuses on de jure constitutions and how their elite- or mass-led character influences their consequences. De facto constitutions are political and economic rules that people use to govern themselves which may or may not be recognized in the evolving de jure constitution. We argue that the nature of change resulting from revolutions depends on whether the emergent constitutional order recognizes the autonomy of de facto constitutions. We theorize neglect, disregard, and hostility toward de facto constitutions contributes to cycles of constitutional instability. We use this theory to explain Afghanistan’s unending revolution. Neither elite-led nor mass-led revolutions in Afghanistan produced a lasting constitutional order because they share a disregard for the de facto constitution.
We consider the role of superstition as a governance institution in Native American cultures. We focus on the way medicine men contribute to self-governance. Medicine men contribute to welfare of American Indians in at least two ways: improving public health and facilitating self-governing collective action. One way that medicine men contribute to collective well-being is by establishing a shared mental model. Although these models may not align with contemporary scientific accuracy, they offer practical knowledge, foster unity, and enhance the ability of Native Nations to respond to crises in an environment in which federal and state governments are unreliable or hostile.
This paper examines the responses of Indigenous nations and European companies to new trading opportunities: the Cree nations with the Hudson's Bay Company (HBC) and the Khoe nations with the Dutch East India Company [Verenigde Oostindische Compagnie (VOC)]. This case study is important because of the disparate outcomes. Within a few decades the Cree standard of living had increased, while Khoe nations had lost cattle and land. Standard histories begin with the establishment of trading posts, but this elides the decades of prior intermittent contact which played an important role in the disparate outcomes in these two regions. The paper emphasizes the significance of Indigenous agency in trade.
US military sources document more than 1800 conflicts of varying intensity between the United States and tribes from 1830 to 1897. Negative binomial and Tobit regressions both show that hostilities follow political and economic cycles. Politically, conflicts increased in recessionary election years, however, conflicts in non‐election recessionary years lack significant changes. The second major trend is the influence of three economic factors. After western states began to mine gold conflicts drastically increased. Conflicts likewise increased with the expansion of the railroad and with buffalo extinctions at the state level. While nineteenth century Americans had perpetual anti‐Indigenous sentiment, tribal persecution followed political and economic rationales.
Property rights are secure, and violence over land can be attenuated when the treatment and delineation of the property are consistent, stable, and interpreted similarly by each party. In the absence of a mutual understanding of property rights, land-use stability becomes strained as the area of contested land between two rival parties expands—when one party (or group) is perceived as asymmetrically and rapidly accumulating land at another’s expense. While relations between Algonquian tribes and English settlers were generally peaceful in the first half of the 17th century, subsequent colonial growth accelerated and lead to violent conflict. The latter half of the 17th century experienced some of the most devastating conflicts during early colonial American development—beginning with Pequot’s War, peaking during King Philip’s War, and ending with a European proxy war in North America during King William’s War. Using probate data for 72 settlements in New England to measure the growth of farmers as a proxy for colonial territorial growth, I find a general pattern that English settlements with higher rates of population and territorial growth experienced more violent conflict during King Philip’s War. The same relationship between territorial growth and violent conflict was not as strong for wars that preceded and succeeded King Philip’s War.
This paper analyzes the impact of FORIS contracts on litigation and settlement decisions using a simple divergent-expectations model. A FORIS contract introduces contingent fee arrangements under the British legal cost allocation rule: the plaintiff pays a percentage of his settlement or trial returns to FORIS and obtains coverage for trial costs in case he loses in court; the plaintiff?s attorney receives the standard fee. We take into account the sequential nature of the settlement and trial decisions. Without FORIS contracts, only cases with positive expected value provide credible threats for the plaintiff and thereby motivate the defendant to agree to a settlement. A FORIS contract has two important effects: cases with negative expected value are turned into credible threats, hence a settlement is triggered. Even in positive expected value cases, the settlement result for the plaintiff is increased. According to our results, FORIS should prohibit settlement negotiations before a contract with the plaintiff has been made. The paper argues that FORIS should abolish the non-disclosure clause which prohibits the plaintiff to reveal the existence of the FORIS contract to a third party. -- Das Paper analysiert die Wirkung eines FORIS-Vertrages auf die Bereitschaft zu klagen und zum au�ergerichtlichen Vergleich. Dabei wird ein einfaches Optimismus-Modell angewendet. Der FORIS-Vetrag erlaubt es dem Kl�ger, trotz Geltung der Europ�ischen Proze�kostenregel (Velierer zahlt) mit den (in Amerika �blichen) "contingent fees" kalkulieren zu k�nnen: Der Kl�ger zahlt einen Teil seiner Ertr�ge aus Proze� oder Vergleich an FORIS; diese Firma wiederum zahlt die gesetzlichen Geb�hren an den Anwalt des Kl�gers und tr�gt die Proze�kosten, wenn der Kunde unterliegt. Das Modell zieht die sequentielle Struktur von Vergleichs- und Proze�entscheidungen in Betracht. Ohne FORIS-Vertrag w�re eine Klagedrohung nur dann glaubw�rdig, wenn der Proze� dem Kl�ger einen p