How Land Allotment on Native Reserves Hinders Tribes’ Economic Development

How Land Allotment on Native Reserves Hinders Tribes’ Economic Development

Harrison Phipps, Fall 2022

The relationship between Native Americans and the US government has historically been contentious in the extreme, with the latter party eventually confining many of the former to reservations across the United States. In the present day, federal policy has turned many reservations into bureaucratic nightmares plagued by contested land ownership, inefficient government oversight and widespread poverty. This article will identify the historical policies that divided many reservations into their “checkerboard” pattern of property ownership, discuss the modern impact of those policies and the federal agencies that oversee tribes, and explain the poverty that has become disproportionately rampant among Native Americans today.

Much of the current state of Native reservations is due to legacies of the 1887 passage of the Dawes Act. The Act, which was ratified as a means of assimilating Native Americans into white culture, gave the President unilateral authority to have reservation lands surveyed, divided into allotments, and redistributed among the reservation’s inhabitants [1]. Each person would receive an amount of land depending on their age and status as the “head of a family”, and upon that person’s death the land would be further divided among their heirs [2]. Critically, the Dawes Act allowed any leftover land to be bought by the US government and resold as they saw fit – typically to non-Native settlers, whom the government hoped would inspire nearby Native Americans to take up traditional American methods of agriculture [3]. To further encourage this goal, land was typically allotted in a checkerboard style: one plot of land would go a Native family while the adjoining plots would be sold to settlers, thereby impeding Native peoples’ ability to cooperate with one another and simultaneously increasing their dependence on their new American neighbors [4].

There were several key factors that the Dawes Act overlooked. For starters, most of the Native Americans living on reservations had very little experience farming, and the lands they were allotted were poorly suited towards agriculture [5]. Furthermore, buying seeds and equipment cost money, something which most reservation denizens were dearly short on [6]. Even if one did come up with the funds necessary to use their land, upon death their ownership over the allotment would be divided evenly among their heirs, creating a situation where each descendant’s individual interest in the allotment grew smaller and smaller with every new generation, eventually becoming so miniscule as to render the land unusable [7]. Thus, following the end of the mandatory 25-year trust period – when allotments were officially held by the federal government and unable to be sold privately – many Native Americans chose to sell their land, rather than continue to scrape by on property which they had no means of effectively utilizing [8]. Before the Dawes Act was signed into law, Native American tribes held some 138 million acres of land: today, tribes own roughly 56.2 million acres, about 10 million of which are allotted lands, of which most are split between multiple Native owners and continue to be intersected by the checkerboard pattern of non-Native property owners [9][10].

Ownership over Native lands is significantly more complicated than divided ownership of allotments, however. 1934 saw the passage of the Indian Reorganization Act which both prohibited the allotment of newly acquired reservation land as well as restored some reservation lands that had been made surplus by the Dawes Act [11]. It also extended the federal government’s ability to hold land in trust indefinitely and included the returned surplus land in that trust [12]. As a result, tribal land was divided into four distinct categories: tribal-trust land, where the federal government holds the title to the land but allows the local tribal government to oversee its use; allotted trust land, leftover from the days of the Dawes Act, where the federal government holds the lands’ title in trust for the descendants of the lands’ original allottee; restricted fee land, where the lands’ title is held by either a tribal government or an individual tribal member but any use of the land must be approved by the Secretary of the Interior, and; fee-simple lands, similar to private land ownership where one tribal member owns the title to the land and is legally allowed to use it as they wish [13]. Only about five percent of all reservation land today is categorized as fee-simple; the other ninety-five percent is overseen by the federal government [14].

With so much Native land held in federal trust, development becomes mired in layers of bureaucracy – made more tedious by the fact that, despite being US citizens, Native Americans living on reservations mainly interact with the federal government through the Bureau of Indian Affairs [15]. Created as an independent organization in 1824 and later transferred to the Department of the Interior in 1849, the BIA’s main duties have historically been to manage relations between the United States and the federally recognized Native tribes [16]. Though the Bureau has, in recent years, shifted from being an adversarial force against Natives Americans into one that promotes Native sovereignty and self-determination, its reputation remains as one of the least-efficient wings of the federal government. Goals issued by the Bureau are frequently unclear and provide little means to accurately measure improvement, as was the case with their 2015 establishment of the Indian Energy Service Center meant to assist tribal governments in utilizing the oil, gas, coal, and natural energy sources found on many reservations [17]. Over-complexity is another hallmark of the BIA, with 18 percent of Native Americans living on reservations going without access to broadband internet due to confusion over which program to apply for and – when a suitable program is found – lack of clarity on how to actually apply for it [18]. Lack of clarity is evidently a staple at the BIA, as their annual report on the use of federal funding is noted for its poorly labelled data and confusing structure [19].

As the organization in charge of managing Native American’s relationship with the federal government, the BIA’s evident inability to manage itself has synthesized with reservation’s jumbled property rights to create a situation in which land development is often economically unviable. Fractionated lands left over from the Dawes Act are effectively impossible to develop, as any one person aiming to make economic use of their allotment must first negotiate with hundreds or thousands of other allottees [20]. In some cases, parcels of land are divided between so many allottees that the income made from one individual’s allotment share is less than the cost of processing the payment, even further disincentivizing development [21]. Lands held in federal trust have their own set of issues, as tribal members are required to gain the approval of the Secretary of the Interior – and navigate through a labyrinthine knot of BIA red tape – before building can begin on any businesses, homes, farms, or other economic improvements [22]. Yet, for many Native Americans, slogging through that bureaucratic process is never an option to begin with: crushing poverty plagues the reservations, precluding a significant number of Native Americans from taking on the costly endeavor of land development [23].

These myriad issues standing in the way of reservation land development, many of which stem from the Dawes Act and the Indian Reorganization Act, lead many Native American individuals and tribes to abandon the prospect of community development and instead turn to leasing out tribal land to non-Native farmers and ranchers, often below market value [24]. Although this practice may lead to a fast influx of cash, it typically provides poor returns and moves large sums of money out of the reservation over a longer period of time [25]. One example, the Pine Ridge Reservation, leased nearly half of its available land to just twenty people in 2009 [26]. Despite this, Pine Ridge was – and still is – one of the most deeply impoverished reservations in the United States [27].

Unfortunately, Pine Ridge Reservation is far from the only Native community struggling with poverty: in fact, Native Americans today experience the highest poverty rates out of any racial group within the United States, with 24.3 percent of Native Americans living below the poverty line in 2021 [28]. They are also the most disproportionately impoverished, with an exact two-to-one ratio of their percentage share of people living in poverty to their percentage share of the total US population; in other words, despite only making up 1.3 percent of the United States’ population, Native Americans account for 2.6 percent of the country’s population living below the poverty line [29].

Almost a century and a half after the passage of the Dawes Act, its legacy – along with that of the Indian Reorganization Act – continues to affect the lives of Native Americans living on reservations. Although neither was passed with the explicit intention of disadvantaging Native Americans, the large tracts of unusable allotment lands and the indecipherable maze of bureaucracy left by the Acts barred the already-impoverished Native Americans from utilizing the lands they lived on. This problem remains as real today as it was in 1934: still, many reservations go without the means to economically develop their land, and struggle to obtain the federal approval required to do so. Allotments, the ownerships of which have been continually divided between each living heir of the original allottee in 1887, have become so inundated with co-owners that improving on allotted land is essentially throwing money away, as any profits made are divided between hundreds or thousands of other people. The system is broken, and more than anything else its result has been the perpetuation of generational poverty: deeply impoverished people are born onto lands which they have no means of using, without clear guidance or assistance from the federal government towards acquiring those means. Simultaneously, there exists a constant incentive for tribes to relinquish further control over their lands in exchange for monetary respite, relief which ultimately results in the exodus of money out of the reservation and another generation of poverty for the tribe. It is a vicious cycle with deep historical roots, as problematic now as they were in 1934: to this day, the legacies of the Dawes and Indian Reorganization Acts continue to destroy the lives of Native Americans on reservations.


[1] “Dawes Act (1887)”. Forty-Ninth Congress of the United States of America. National Archives (1887).

[2] Ibid.

[3] McGrath, Daniel. “The Model Tribal Probate Code: An Opportunity to Correct the Problems of Fractionation and the Legacy of the Dawes Act.” Journal of Gender, Race and Justice 20, no. 2 (2017): 403+. Gale General OneFile (accessed November 4, 2022).

[4] – [9] Ibid.

[10] “What is a Federal Indian Reservation?”. U.S. Department of the Interior, Indian Affairs.,various%20Indian%20tribes%20and%20individuals.

[11] “Indian Reorganization Act”. Seventy-Third Congress of the United States of America (1934).

[12] Lofthouse, Jordan K. “Institutions and Economic Development on Native American Lands.” The Independent Review 24, no. 2 (2019): 227–48.

[13] – [14] Ibid.

[15] “Bureau of Indian Affairs”. U.S. Department of the Interior, Indian Affairs.

[16] Ibid.

[17] “Tribal and Native American Issues”. US Government and Accountability Office.

[18] – [19] Ibid.

[20] “Land Tenure Issues”. Indian Land Tenure Foundation.

[21] – [22] Ibid.

[23] Creamer, John, et al. “Poverty in the United States: 2021”. United States Census Bureau (2022).

[24] “Land Tenure Issues”. Indian Land Tenure Foundation.

[25] – [26] Ibid.

[27] Bear Runner, Julian. “Written Testimony of Julian Bear Runner, President of the Oglala Sioux Tribe Subcommittee for Indigenous Peoples of the United States House Natural Resources Committee”. Tribal Infrastructure: Roads, Bridges, and Buildings. Oglala Sioux Tribe, Pine Ridge Indian Reservation (2019).

[28] Creamer, John, et al. “Poverty in the United States: 2021”. United States Census Bureau (2022).

[29] Ibid.


Gershon, Livia. “Native Nations and the BIA: It’s Complicated”. JSTOR Daily (2021).

“Native American Ownership and Governance of Natural Resources”. Natural Resources Revenue Data. U.S. Department of the Interior.

Worcester State University Fall 2022