Quarterly Journal of Political Science > Vol 12 > Issue 4

Sovereignty, Law, and Finance: Evidence from American Indian Reservations

Rachel L. Wellhausen, University of Texas at Austin, USA, rwellhausen@utexas.edu
 
Suggested Citation
Rachel L. Wellhausen (2017), "Sovereignty, Law, and Finance: Evidence from American Indian Reservations", Quarterly Journal of Political Science: Vol. 12: No. 4, pp 405-436. http://dx.doi.org/10.1561/100.00016131

Published: 07 Dec 2017
© 2017 R. L. Wellhausen
 
Subjects
Econometric models:Identification,  Financial markets,  Law and Economics,  Legislatures:Lawmaking,  American political development,  Comparative political economy,  Intergovernmental relations,  Law,  Rule of law
 
Keywords
American IndianRule of lawHousingSovereigntyPolitical economyNatural experiment
 

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In this article:
Law and Finance
Public Law 280 as a Quasi-Natural Experiment
Effects of Variation in Civil Law: American-Indian Housing
Conclusion
References

Abstract

In 1953, Congress supplanted the tribal civil law on some American-Indian reservations with the civil law of the US state in which they are located. In the vein of cross-national literature on law and finance, I demonstrate that Congress's action reduced external financial actors' uncertainty over the enforcement of contracts on some reservations. Using novel data on 20,000 home loans to tribal members guaranteed by a US Housing and Urban Development program (1996–2013), I find a causal effect at the individual level: mortgage holders governed by US state civil law pay consistently lower interest rates. Thus, externally imposed law generates long-term benefits for tribal members. Nonetheless, qualitative extensions suggest that neither the presence nor the magnitude of the effect offsets many tribes' prioritization of their sovereignty, rather than the individual-level economic benefits that can result from compromising it.

DOI:10.1561/100.00016131

Online Appendix | 100.00016131_app.pdf

This is the article's accompanying appendix.

DOI: 10.1561/100.00016131_app

Replication Data | 100.00016131_supp.zip (ZIP).

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DOI: 10.1561/100.00016131_supp