New economies for native nations.

• Author: Rolo, Mark Anthony

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During President Reagan's budget-slashing years in the 1980s, American Indian governments were especially hard hit, facing even greater cutbacks than the rest of the country in federal dollars for health, education, and business development. Tribes were forced into finding economic alternatives to address the deepening poverty brought on by Reaganomics.

There was little to build on in Indian Country. Trailer parks, jewelry and other craft stands for tourists, and humble bingo halls that only appealed to reservation community members could never form the foundation of a strong tribal economy.

Given the federal government's responsibility to tribes, based on treaties, Congress passed the Indian Gaming Regulatory Act of 1988, authorizing tribes to construct casinos. This was seen as the most promising solution to end federal government dependency by promoting economic self-sufficiency.

But nearly three decades later, most of the more than 500 federally recognized tribal nations have not seen the payoff of Vegas-style gaming. Today, the unemployment rate among American Indians is still nearly double that of the national average. One in four Indians continue to live in poverty.

The reality is that Indian gaming has not been a panacea. Only those few tribes located next to urban centers like Minneapolis, Los Angeles, Detroit, and San Diego have been able to rake in big revenue.

"What makes for a successful casino? Geography and population," says Joe Kalt, co-founder and co-director of the Harvard Project on American Indian Economic Development. "Since the vast majority of reservations are in much more rural areas, many tribes have small gaming operations. Some year-round truck drivers come through or summer tourists visit, but it really provides only a little cash flow for tribal government services."

Rural reservation life also suffers from other business development barriers. There is the absence of trade routes that carry consumer goods. There is the poor infrastructure (especially telecommunications). Banks are reluctant to lend to individuals or start-up businesses because they have next-to-no collateral. Reservation land is not owned by tribes or private citizens; it is trust land owned by the federal government.

Jacqueline Pata, executive director of the National Congress of American Indians, a legislative advocacy organization made up of more than 250 tribes, says federal policies are another huge hindrance.

"Tribes must wrestle with outdated and unfair laws and policies that put them at a competitive disadvantage and restrict their ability to fully grasp the reins of their economic futures," she says. "Federal law currently does not allow tribal governments the use of critical tools, such as surety bonds and tax exempt bonds that state and local...