From the Rebuilding Native Nations Course Series: "Rules are More Important than Resources to Enterprise Success"

Native Nations Institute

Professor Joseph Kalt discusses the importance of sound laws, codes, policies and other rules to the building of diversified, sustainable economies in Indian Country and everywhere else around the world.

Native Nations

Kalt, Joseph P. "Nation-Owned Enterprises: Building and Sustaining Success." Native Nations Institute for Leadership, Management, and Policy, University of Arizona. Tucson, Arizona. 2011. Lecture.

"When we work with tribes, we get in these conversations all the time with tribal councils [who ask,] 'What are the ingredients? What are the building blocks that we need to get one of those productive economies going?' In some ways, of course, it's a very complicated process -- you need everything. You need money, you need a skilled workforce, you might still try to get some federal grants, you'd like to have some natural resources. It's a whole panoply of things that you need, if you will, to really get successful tribal enterprises going. But when we look across Indian Country, among the building blocks -- capital, education, access to markets -- what we find is, at a foundational level, we've not success in the building of tribal economies, productive economies, without a set of, essentially, good rules of operation in place. The tribes that are succeeding in building these productive economies, start by building the kind of legal and organizational infrastructure upon which any business -- whether it is a citizen-owned small business or a large tribal enterprise. The kinds of rules of the game or procedures, everything from personnel policies to corporate governance [are important]. What we're seeing is that the tribes that are succeeding in building productive economies are putting in place this kind of legal and organizational infrastructure.

That's actually not very surprising. We know all around the world, we have examples now of places that build strong productive economies, where just a couple decades ago, or two decades ago, you wouldn't think it could happen. One of my favorites is Taiwan -- off the coast of China, out in the middle of the Pacific Ocean. Right after World War II, Taiwan was basically an almost empty rock in the middle of the Pacific Ocean in the poorest part of the world -- not close to any markets, no natural resources to speak of, a population that was very, very poor with almost no formal education. And today, some people talk about Taiwan as one of the 'Asian Tigers.'

And the reason for that is, it turns out every human society has at least one productive resource –- it's a society, it's got human beings. And we human beings are amazingly productive when you give us a system in which we channel our energies into productive activities. And there's a lot of focus on the ground -- in federal policy, sometimes in the tribal councils -- 'the way to get a business going is to get to the next grant, or to hire a good manager.' All of that is sort of true, but you can't hold on to the good manager unless there's a system that allows for people to be productive and be, essentially, productive in these economic activities."

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