Jurisdiction and Development: the Impact of Public Law 280 in Indian Country

Abstract: Public Law 280, passed by Congress in 1953, transferred jurisdictional authority over criminal and civil matters from the federal to state governments in selected areas of Indian country. As such, the law's implementation provides a unique opportunity to study the impact of legal institutions and their change on socio-economic outcomes. However, while the law's controversial content has attracted interest from legal scholars, empirical studies of its impact are very scarce and do not address the law's endogenous nature. We empirically examine the law's impact on crime and economic development using cross-sectional and panel data on U.S. counties with significant American Indian reservation population. To address the non-random selection of areas subject to Public Law 280, our empirical strategy draws on the political and historical context surrounding the law's enactment. Relying on different estimation methods and instrumental variable approaches, we, consistent with legal scholars' descriptive accounts and theoretical conjectures, find that the application of Public Law 280 is associated with more crime and lower incomes. The adverse impact of Public Law 280 is robust and large in magnitude.