From Gaming to Justice? A Note on the Effect of American Indian Casinos on Tribal Judicial Systems

AN EFFICIENT AND IMPARTIAL JUDICIAL SYSTEM is essential to economic development. The judiciary plays a central role in upholding property rights and promoting commerce in large-scale anonymous markets where reputation-based relational contracting loses its efficacy (see, e.g., Dixit 2003; Stephenson 2007). An effective judiciary has been shown to foster investment, entrepreneurship, industrial activity, and credit (see, e.g., Chemin 2009a, 2009b, 2012; Jappelli, Pagano, and Bianco 2005; Visaria 2009). In the context of Indian Country in particular, recent empirical evidence suggests that differences in legislative frameworks that structure the functioning of judicial institutions are an important driver of disparities in socioeconomic outcomes (see, e.g., Goldberg and Champagne 2007; Anderson and Parker 2008; Dimitrova- Grajzl, Grajzl, and Guse 2014; Dimitrova-Grajzl, Guse, and Todd 2015; Wellhausen 2017). This raises the question of what factors impact and facilitate the development of an effective judiciary in Native communities.

In Indian Country, access to an effective judiciary has been limited as a consequence of a long history of federal encroachment on tribal sovereignty, inadequate government funding, and a maze of jurisdictional overlaps and limits. To fill the resulting institutional vacuum, tribal communities have striven to expand and enhance their own tribal judicial systems. Given that "tribal justice systems have been underfunded for decades" (US Commission on Civil Rights 2003, 77), financial constraints have been the main obstacle in this regard.

In such an environment, characterized by severe resource scarcity, the American Indian gaming industry has emerged as a mechanism capable of relaxing tribal financial constraints (Akee, Spilde, and Taylor 2015). Indeed, a key goal of the 1988 Indian Gaming Regulatory Act (IGRA) was to promote "tribal economic development, self-sufficiency, and strong tribal governments" (Indian Gaming Regulatory Act 1988). The implementing regulations explicitly recognized tribal government spending to enhance the judicial system as "allowable expenditures of gaming revenues" (National Indian Gaming Commission 2005). In addition, gaming conceivably creates additional demand for tribal judicial services.

The socioeconomic impact of gaming in Indian Country has been explored by a handful of previous studies (see, e.g., Evans and Topoleski 2002; Reagan and Gitter 2007; Anderson 2013). However, to date, no contribution has empirically examined the link between gaming and tribal institution building, in particular, the development of tribal judicial systems. We evaluate how the presence of the American Indian gaming industry has impacted one basic yet salient dimension of tribal judicial systems: their extensiveness. Our analysis thereby fills an important gap in the emerging empirical literature that examines the causes and consequences of institutional development in Indigenous communities (see, e.g., Cornell and Kalt 2000; Dippel 2014; Akee and Jorgensen 2014; Akee, Jorgensen, and Sunde 2015; Aragón 2015).

Data

The source of our data on tribal justice systems is the 2002 Census of Tribal Justice Agencies in American Indian and Alaska Native Jurisdiction. We measure the size of a tribal justice system with the sum of all part-time and fulltime personnel working within the tribal justice system (Tribal Justice System Staff). Personnel is the key input in the administration of justice (see, e.g., Beenstock and Haitovsky 2004; Dimitrova-Grajzl et al. 2012; Dimitrova-Grajzl, Grajzl, and Zajc 2014; Dimitrova-Grajzl et al. 2016; Grajzl and Silwal 2017) and, therefore, an appropriate measure of the extensiveness of a tribal justice system. We concentrate our analysis on reservations with a population of at least five hundred in year 2000. Our dataset covers 106 reservations from twenty-three states; 97 of these 106 reservations have a tribal justice system.

Our focal explanatory variable, Gaming, is Conner and Taggart's (2013) and Taylor and Kalt's (2005) dummy equal to 1 if the tribe associated with a specific reservation in year 2000 operates a class II (e.g., bingo facility) or class III (Las Vegas–style casino) gaming facility. Our 1990 reservation-level controls come from Akee and Taylor (2014) and include total population, percent of adults with a college degree, percent unemployed, median household income, and percent...