First Nations Special Economic Zones
Main Idea: The US congress should pass legislation that allows the First Nations, aka American Indian Tribes, to create Special Economic Zones on their lands. Tribal governments should be able to overrule any federal or state regulations, and to change tax laws. As part of this legislation, all federal involvement with tribal lands should cease, and the tribes should be given full alienable property rights to all land on the reservation.
Discussion: Special Economic Zones (SEZs) are a proven way to increase economic development and bring wealth to a region. The most famous example is Shenzhen, which was transformed by a SEZ from an undeveloped fishing village to a highly developed urban manufacturing center.
In the USA, tribal lands are the ones in most need of economic development. Poverty is a serious problem. We should be considering any tools available to help these regions. And, for reasons of historical justice, it is very hard to argue against ‘giving’ them more sovereignty over their lands.
This should be a bottom-up process: the US government passes enabling legislation that gives tribal governments broad powers to alter the regulatory environment on their lands, and the tribal governments may then choose to set up rules that meet the needs of their people.
The ‘worst case outcome’ of this is that there is little actual economic development, that tribal lands become like offshore tax havens, and that only a few people in a corrupt local government reap most of the benefits from this tax arbitrage. But I would still consider this an improvement over the status quo, as long as tribal governments are chosen with anything resembling a democratic process. The need to get re-elected would force people in government to share at least some of the benefits with their voting bloc. Turning e.g. the Navajo Reservation into something that resembles the Cayman Islands would be a huge policy win.
Another plausible failure mode is pollution. Tribal governments might allow industries to do things that harm people outside the borders. To counter this, the enabling legislation could include a provision to fine the tribal government if net pollution is bad enough. Using satellites and other sensors, the US government would monitor pollution that leaves tribal lands, and convert it to a DALY-based measure of harm. Using similar methods, we estimate the harm to the tribe of the pollution that enters tribal lands from outside, both currently and throughout history. If pollution leaving a tribe’s lands is ever found to cause more harm to outsiders than the harm that the tribe has suffered from all the pollution that has ever entered the tribal land throughout the history of the USA, they can then be fined for the marginal net harm.
However, the most likely outcome is the typical thing that happens with a SEZ: tribal governments attract industries by improving the regulatory environment. There will be more jobs, and the value of their real estate will increase. Some of this economic activity will simply be ‘stolen’ from nearby areas, but most of it will lead to an increase in overall wealth. The part that is ‘just’ a transfer should be considered a feature and not a bug: a relatively easy and efficient way to do reparations.
Ideally, these SEZs would make it easier to do R&D, leading to faster technology growth and faster economic growth. It could also lead to an improvement in the overall US regulatory environment. If medical tourism becomes a big source of revenue for the First Nations, because you can get good treatments there that have not been approved by the FDA, then this might lead to an improvement in the approval process.
Politically, it should be easy to build a coalition for this. It is a combination of social justice and business-friendly deregulation. Emphasizing the increased sovereignty of the First Nations should get Democrats on board, and emphasizing the deregulation should get Republicans on board. There will of course be a political fight to take power away from the bureaucracy that is currently micromanaging tribal lands, but in this case, the current situation is so bad that it should be relatively easy to summon the energy and the coalition to push through change.
Interesting. Have you heard of the Catawba Digital Economic Zone? It’s basically this specifically for crypto projects.
Are you familiar with the charter cities movement?
Yes to both questions. This is what I see as the most politically feasible way to make a charter city with actual regulatory independence happen in the USA.
Based mostly on reading Matt Levine, I suspect that in practice, if the SEC wanted to go after a business registered in the CDEZ, they would.
Tribal-based SEZs could be the perfect place for people to sell normally Rx-based drugs OTC.
On reservation land, there is already massive distrust of the “process of modern medicine” (including doctors), which prevents many people from getting the care they need. Diabetes rates (and “addiction rates”) on reservations are ultra-high (one Oglala reservation featured by Peter Santenello [he showcases the differences between Indian reservations on his YouTube videos] had dialysis centers). If diabetes medication [eg empagliflozin, sotagliflozin, metformin, rapamycin, semaglutide]+statins+[potentially revolutionary treatments to addiction, which could include some native-based psychedelic plants] could be made OTC (OTC means trusting the customer, it means being pro-choice), it could do a lot to prevent health problems from turning into health disasters, especially on tribal lands. And since there is also substantial demand for these medications OTC among the ordinary population, it could serve as a huge source of taxable income, kind of like the casinos.
It’s already possible to get many of these Rx-based drugs OTC in Latin America (and perhaps from India/Turkey through the grey market) [Latin America has its own unique issues with high diabetes rates], but then one has to deal with inconvenient flights [or travel costs]/customs/etc, which massively reduces their convenience.
Similarly, they can be places where people base experimental medical treatments like exosomes or stem cell treatments (where it’s a massive hassle to offer them in the US due to regulation, and where it’s possible to get them in Latin America). Eg https://garmclinic.com/ (which is in Honduras, and thus tough to get to for most Americans). Any form of non-mainstream medication innovation (that the FDA holds back!) would have a strong argument for being more-than-welcome on tribal land
I’ve visited Roatan before, and the amount of land needed to set up these jurisdictions is quite small. If Minicircle could be offered on tribal land rather than Latin America. Of course, one would have to do due justice to issues that Native Americans face, but bypassing the untrustworthy “white man/FDA” medical system is, I think, enough of a good reason.
[OTC removes many barriers that indigeneous/poor populations face when getting the medication they need, especially preventatively.]
Upon looking further: https://www.fda.gov/regulatory-information/search-fda-guidance-documents/cpg-sec-100350-fda-jurisdiction-indian-reservations might be an obstacle.. (it might not be impossible to change this in the name of generally increasing tribal soverignty...)
https://www.foodsafetynews.com/2013/09/not-ready-fsma-and-fdas-proposed-safety-rules-disregard-sovereignty-and-federal-case-law/
Hi, I’m happy to provide some additional comment later (traveling at the moment) but copy/pasting with light edits the text of an email I wrote in 2020 on this topic. Context: I work on charter cities.
“Based on our conversations with [Native American political economy scholar], the big problem is that while on paper it looks like the tribes might have some degree of autonomy or freedom, they have virtually none in practice.
The property rights on reservations are structured in such a way that the federal government has to be involved in virtually everything. Even down to simple property improvements, like if you wanted to build a pool or a shed on your property, you need federal involvement because the land is held in trust by the federal government because court precedent ruled that Native Americans are technically wards of the state.
There’s also just a lot of variance in the quality of tribal governments… a handful are reportedly run well but a lot more are essentially the stationary bandit. A lot of businesses reportedly do not trust tribal judicial systems… Walmart will set up just outside the Navajo reservation but not inside it, for example.
And then there’s also the fact that the tribes want to keep as much of their remaining land in native hands as possible, essentially that they wouldn’t want a whole bunch of white people showing up and taking over things.
And then one final major obstacle is that most reservations are in the middle of nowhere and are home to less than 10,000 people total. And even in large reservations like the Navajo, biggest town is at most 10,000 people. So it’s hard to get a critical mass of people, and you’re far from any useful infrastructure like an airport.”
I know that the tribes have no freedom now; you could not do anything like a charter city without changing the Federal laws. The laws need to be changed.
Some places would refuse to sell land to outsiders, but some would. The tribal governments should be able to, without Federal oversight, choose to either manage land communally, or assign property rights to individuals.
I’m not intimately familiar with how the law treats Canadian tribes, but you might find this project (Senakw) being developed by the Squamish Nation in Vancouver interesting. In short, they’re building a new development adjacent to Vancouver and because they’re a tribe are exempt from all the usual planning and zoning regualtions.