Bureaucracy versus Indians

1
Bureaucracy versus Indians

• Chapter 5
• AI_12_13

2
After Surrender

• With defeat came political and bureaucratic
  control.
• The rise of the standing army dramatically
  changed the interface between Indians and whites,
  but it was only the tip of the bureaucratic
  iceberg that came to dominate the lives of
  Indians.

3
The Battlefield Moves to Washington

• Once relegated to reservations, Indians struggled
  to adjust it was either adapt or perish.
• Many Indians died from white man's diseases and
  from starvation, but others adapted.
• Familiar with owning and herding horses, the
  Blackfeet began accumulating individually owned
  but communally herded cattle.
• When the federal bureaucracy did finally begin
  to try to control reservation life, "the
  tradition of individual ownership was so well
  established that Indians resisted government
  efforts to establish commonly owned herds from
  1910 to 1920."

4
Wards of the State

• From an early date, Congress and the Supreme
  Court contended that tribes were to be treated as
  sovereigns, but Indians became wards of the state
  with politicians and bureaucrats in Washington,
  D.C., acting as their trustees.
• Not surprisingly, the effect has not always been
  maximization of Indian welfare.
• But it has surely meant the growth of the
  bureaucracy, as can be seen in Table 5.1.

5
Bureaucratic Growth
6
Battle over Property Rights Did Not End

• Shifted from violent warfare to political
  competition
• For much of the next century, the Indians lost
  these battles too
• Property rights were altered due to the demands
  of politically powerful groups and the discretion
  of the large bureaucracy that emerged to
  implement federal Indian policy.
• Institutional change was forced on the tribes.

7
Adaptation

• Even during the early years of allotment when the
  government was assigning parcels of land to
  individual Indians, "relative security of legal
  title created an opportunity for enterprising
  individuals to regain a limited degree of
  independence from the ration list.

8
Institutional Change

• Farming and ranching also gave ambitious men an
  opportunity to accumulate wealth outside the
  Bureau of Indian Affairs' patronage system and,
  through sharing and gifting, to establish
  themselves as autonomous leaders.
• However, when the government imposed new
  institutions on the Indians, agricultural
  productivity suffered because politicization of
  the institutions exhibited a blatant disregard
  for existing and past cultural norms.

9
Traditional Plains Indian Institutions

• An open-ended meritocracy with many gently
  competing poles of authority.
• Individual freedom was ensured by the
  representation of all families in council and by
  the requirement of consensus for national action.
  
• Equally important was the nature of the economy,
  which rewarded coordination but did not make it
  necessary for survival.
• Even the smallest family, functioning as a
  cooperative economic unit, could provide for
  itself under most circumstances.

10
Traditional Plains Indian Government

• Only in times of war or disaster were wider
  economic and security arrangements unavoidable.
• Government therefore functioned "at need" rather
  than as a permanent, coercive establishment.

11
Bureaucratic Dependence

• But after relegation to reservations, government
  became both permanent and coercive.
• "When we hear it said today that Indians do not
  believe in property or in private enterprise, we
  are still hearing the echoes of the struggle
  against Indian agrarian entrepreneurs in the
  1930sa struggle waged in the name of liberating
  landless Indians from poverty, but which in
  reality returned reservation economies to
  government dependence" (Barsh, 1987, p. 89).

12
Understanding the Political and Bureaucratic
Environment

• Dominant Economic Theory of Government before
  1970s Government pursues the public interest
• If markets fail, government can correct the
  problem
• Government can replace markets (central planning,
  socialism)
• Policies toward Indian reservations often have
  been experiments in socialism rather than
  capitalism.

13
Public Choice and the Theory of Government
Failure

• Takes an economic approach to the analysis of
  government, pointing out that special interest
  problems can lead to government failure
• Rejects the public interest theory of
  government
• Public interest is a normative concept and each
  persons subjective values determine their
  beliefs about what the public interest is.

14
Property Rights as the Object of Interest Group
Demand

• Define the objects of interest group demand, and
  the functions of government law as a) the
  assignment of property rights, and b) enforcement
  of each property rights assignment
• Property rights convey the ability to benefit
  oneself or harm others and dictate the
  distribution of wealth
• Changes in property rights reallocate, destroy,
  or create rents and therefore transfer wealth
• Whenever an interest group is successful in
  altering the assignment of property rights, other
  individuals lose, so political competition is
  likely even if some groups are not seeking
  monetary or physically measurable wealth or rents
  

15
Interest Groups

• May pursue obvious self-interests
• May pursue what members believe is in the public
  interest
• Bruce Yandle, Bootleggers and Baptists
• Individuals and groups pursuing their
  self-interests often can take advantage of the
  efforts of groups pursuing what they see as the
  public interests
• Relatively small groups with large per capita
  stakes tend to dominate, due to information and
  organizing costs

16
Costs of Organizing

• Two relevant costs
• the cost of arriving at an agreement, and
• the cost of enforcing an agreement
• Negotiation required to determine objectives and
  strategies
• If everyone in a group (of any size) has
  interests in common, then they will act
  collectively to achieve them.

17
The Logic of Collective Action

• Large groups will face relatively high costs when
  attempting to organize for collective action
  while small groups will face relatively low
  costs.
• Each individual member has incentives to avoid
  paying a full share (free ride).
• Small groups may be effective while large groups
  may not be because it is easier to negotiate in
  and then police an interest group that is small.
  

18
Special Interests

• Government provides benefits for "special
  interests" who are able to influence the
  political process.
• Government confers concentrated benefits to
  special interests, spreading the individual
  small costs across many consumers and taxpayers.
• Individuals who have discretionary power in the
  political process (politicians, government
  employees) also pursue their own subjective
  values.

19
White Farmers as Special Interests

• The Dawes Act (also called General Allotment
  Act), adopted by Congress in 1887, authorized the
  President of the United States to survey Indian
  tribal land and divide it into allotments for
  individual Indians.
• The act also provided that the government would
  purchase Indian land "excess" to that needed for
  allotment and open it up for settlement by
  non-Indians.
• Bureaucracy responsible for procedures.

20
Bureaucratic Preferences

• Bureaucratic authorities can be viewed as firms
  producing a service or a set of services
  including enforcement of legislatively determined
  property rights assignments.
• Exchange their services for a budget
• Bureaucrats are utility maximizers with income
  and non-monetary perquisites (e.g., prestige,
  staff support, travel, leisure time or shirking,
  social and physical amenities, discretion to do
  the job) as arguments in utility functions.
• Income and perquisites tend to be functions of
  both bureau output (i.e., the size of the bureau)
  and the discretionary budget

21
Constraints on Bureaucrats

• Mangers of enforcement bureaus prefer stricter
  enforcement of whatever restrictions exist than
  the legislature wants, and also try to
  inefficiently enforce rights in the sense of
  spending a larger budget per unit of enforcement
  than is necessary, if they can appropriate part
  of the budgets allocated by the legislature for
  their own benefit.
• If there were no constraints on legislators' time
  and resources, they would force politically
  efficient behavior, but constraints do exist.
• Legislators and interest groups monitor bureaus
  and use other control devises but control is
  "imperfect"

22
Example

• Lindsay (1976) recognizes that many bureaus
  produce numerous outputs, some of which are
  easily measurable and some of which are not.
• Bureaucrat has incentives to produce the
  measurable outputs that correspond to the
  monitor's desires, while exploiting the
  uncertainty associated with unmeasurable outputs
  (e.g., to gain discretionary budget)
• Veteran's Administration provides expected levels
  of easily measured outputs (hospital beds,
  patient days) but relatively low quality services
  for unmeasurable outputs
• If all dimensions cannot be monitored, then some
  power to scrimp on these attributes rest with
  those in the bureau, who can use the savings to
  forward their own interests"

23
Eliminating Ethnic Communities

• Carlson notes that "no student of property-rights
  literature will be surprised that the
  complicated and heavily supervised property right
  that emerged from allotment led to
  inefficiencies, corruption, and losses for both
  Indians and society."
• One of the major costs of transferring land to
  non-Indians may have been the reduced sense of an
  ethnic community on reservations.
• McChesney calls this an "ethnic externality,"
  meaning that outside customs and cultures made it
  harder to maintain tribal customs and culture.

24
How to Explain the Dawes Act?

• According to the special interest theory of
  politics, laws are passed because they confer
  benefits upon interest groups that are
  influential in the political arena.
• In this case, the General Allotment Act formed
  the proverbial "iron triangle" of politics in
  which white settlers got the land, politicians
  received votes, and bureaucrats increased their
  budgets.

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27
Public versus Private Interest

• The guardianship model of Indian policy explains
  the relationship between the federal government
  and Indians as an effort by the government to
  correct imperfections in the institutional
  structure on Indian reservations.
• Many reformers saw allotment as the only way to
  "Americanize" the Indian.

28
Allotment (1887)

• The dates when reservations were allotted varied
  considerably across Indian Country.
• On some reservations, allotment ensued the first
  year after the Dawes Act, whereas on others
  allotment did not take place until after 1930.
• Once allotted, the lands originally were to be
  held in trust by the federal government for 25
  years, at the end of which time the Indian was to
  receive full fee simple title to the land.

29
Leasing Allowed

• During the period of trusteeship, the land was
  not to be sold, leased, or willed to another
  Indian or non-Indian.
• But because many allotted lands were not coming
  into production, the act was amended in 1891 to
  permit leasing with the result that "leasing soon
  became more prevalent than working one's own plot
  on many reservations."
• 112,000 acres out of 140,000 acres of allotted
  lands on the Omaha and Winnebago reservations
  were leased by 1898 (1984, p. 673).
• The 1906 amendment to the General Allotment Act
  authorized the Secretary of Interior to issue fee
  patents immediately if any Indian was deemed
  "competent and capable of managing his or her
  affairs."

30
Decline in Indian Land

• When fee simple title to allotted lands or
  surplus lands passed to individuals, the land was
  no longer considered "Indian Land"even if it was
  owned by an Indian.
• The total amount of Indian land declined
  dramatically between 1871 and 1983 (see Table
  5.2) as fee simple patents were issued by the
  federal government.
• Measured in terms of privatization, the General
  Allotment Act was incredibly effective measured
  in terms of Indian ownership, however, it was a
  disaster.
• According to Washburn, "about 60 percent of this
  land passed out of Indian hands" (1971, p. 145).

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32
Special Interest Theory of Politics

• Given that so many acres were transferred from
  Indian to white hands under this act, a special
  interest theory of politics provides an
  alternative to the "guardianship model" of
  allotment.
• According to this theory, non-Indian special
  interest groups would seek legislation that would
  enable these groups to capture the wealth of
  reservations through political processes.
• With reservations being established at precisely
  the time when western land values were rising,
  whites who were excluded from settling these
  reservations had an incentive to find a mechanism
  to obtain access.

33
Demand for Legislation

• The General Allotment Act allowed whites to
  purchase land from allottees or tribes or to
  homestead the surplus.
• As a result, non-Indians ended up on the
  receiving end of "one of the largest real estate
  transfers in history."
• If the white settlers were the demanders of this
  legislation, the politicians and bureaucrats were
  the suppliers.

34
Policies for Votes

• Given that Indians constituted a small portion of
  the population and that many Indians could not or
  did not vote anyway, congressional committees
  represented the interests of non-Indian
  constituents, and policy was catered to
  constituents.
• If whites wanted access to Indian lands, they
  would expect their representatives to deliver the
  policies that would satisfy their demands for
  access.
• The General Allotment Act did this.

35
Bureaucratic Influence

• If land-hungry settlers were the main
  beneficiaries of allotment policy, why weren't
  Indians granted outright title to the allotments
  so that white intrusion could occur faster?
• Or why wasn't all reservation land declared
  surplus and opened to homesteading?
• The answer centers around the desire of the
  bureaucracy to increase its budget.

36
Bureaucrats as Policy Advocates

• Bureaucrats are not only a government employee.
• They are at the same time voters and as such
  employers of politicians.
• Their pecuniary interests as employees probably
  dominate their interests as employers, as they
  get much more from the public funds than they
  contributes to them
• This double relationship becomes more important
  as the people on the government's payroll
  increase.
• Bureaucrat as voter is more eager to get a raise
  than to keep the budget balanced.
• Therefore, bureaucrats are in a position to be
  "policy advocates" rather than simply policy
  implementers

37
Bureaucratic Pursuit of Policy Changes

• Bureaucratic institutional process tends to be
  dominated by individual bureaucrats pursuing
  their subjective goals by selectively seeking and
  implementing policy innovations.
• Part of the general struggle for budgets, as well
  as competition for positions and promotions
• Propagate" their own policy agendas and have a
  relative advantage in interest group competition
• Already organized, well informed about a narrowly
  focused political issues, generally can
  appropriate a portion of their discretionary
  budgets to cover some or all of their lobbying
  costs, and they have ready access to those who
  pass laws and set budgets

38
Bureaucrats Create Uncertainty

• Bureaucrats' power and discretion depend on the
  degree of uncertainty, and they often can
  increase uncertainty through "selective
  distortion
• Oversight sponsor faces the duel problem of
  determining both what the bureaus output should
  be from a political perspective, and how it
  should be produced, with the potential for
  bureaucrats misleading them on both counts.
• Incentives to "educate" sponsors, by selectively
  informing them of the strength and wishes of
  other interest groups.
• Therefore, interest groups press their demands to
  bureaucracies as well as (or instead of) to
  legislatures.

39
Information and Misinformation

• Bureaucrats have incentives to "educate"
  potential interest group allies and to
  "propagate" their agenda through "public
  information" or misinformation campaigns.
• Strategies employed by bureaucrats include
• "(i) Alterations in the flows of in information
  or commands as these move through or across the
  hierarchical levels of the organization
• (ii) Variations in the quality or quantity of
  information leaked to the media, to other bureaus
  in the organization, to special interest groups,
  and/or to opposition parties and rival suppliers
  and
• (iii) Changes in the speed of implementation of
  policies as these are put into effect" (Breton
  and Wintrobe 1982)

40
Bureaucratic Environment

• Strategies and selective behavior in general are
  possible because of the way bureaucratic
  organizations and hierarchies work
• Monitoring by superiors and sponsors is costly
  and the measurement of bureaucratic performance
  is generally difficult or impossible
• Such strategies can increase monitoring costs and
  make measurement of performance even more
  difficult
• Individuals who depend on a particular
  bureaucratic process for their livelihood have
  strong incentives to maintain it and prevent the
  implementation of competitive alternatives.

41
Bureaucracys Expanding Role

• By amending the Dawes Act in 1891 to allow for
  leasing allotments that had not been released
  from trusteeship, Congress allowed whites access
  to the lands while preserving an important role
  for the bureaucracy.
• This gave Indian agents even more power, because
  it was up to them to determine and enforce the
  terms of leases.
• "Leases came to be granted more and more freely,
  and by the turn of the century, the leasing of
  allotments was relatively common." (Carlson,
  1981, p. 37).

42
Hypotheses

• From the special interest theory of allotment
  three hypotheses follow
• 1. Congressional committee decisions will reflect
  the demands of constituents, and policies will
  change as these demands change.
• 2. Allotment would occur first in those areas
  where whites placed a higher value on the land
  held by Indians.
• 3. As the allotment process transferred millions
  of acres out of BIA control, the bureaucracy
  would have lost nearly all of its power had it
  not halted the process by retaining trust
  authority under the 1934 Indian Reorganization
  Act.

43
Hypothesis 1

• Throughout the history of government policy
  regarding Indian property rights, those rights
  often have been ambiguous, leaving the assignment
  of those rights to bureaucratic discretion.
• With Indian property rights not clearly
  specified, Congress and its agenciessuch as the
  Bureau of Indian Affairshave been in a position
  to redistribute the sticks in the bundle of
  rights to special interest constituencies.

44
Cherokee Outlet

• By not specifying exactly what rights the
  Cherokees had to their land in Oklahoma, Congress
  provided itself an opportunity to respond to
  changing constituent demands.

45
Hypothesis 1 (contd)

• The Cherokees, ranchers who grazed cattle in the
  outlet (CSLA), and the Boomers (people who wanted
  to farm the Outlet) competed for the right to use
  the Outlet.
• Ultimately the Boomers won the battle as Congress
  passed an appropriation bill in 1889 authorizing
  payment of 1.25 per acre to the Cherokees, and
  in October 1889 the secretary of the interior
  ordered the CSLA to remove its cattle from the
  Outlet.

46
Hypothesis 1 (contd)

• The explanation for the Boomer victory is found
  in the relationship between constituents and
  their congressional representatives.
• Though the ranchers were well organized, the
  Boomers were growing in numbers and by 1870
  outnumbered cattlemen in every state bordering
  the Outlet.
• The combination of larger numbers and higher land
  prices provided the necessary demand stimulus for
  changing the property rights to the Outlet.

47
Hypothesis 2

• Just as the Boomers brought pressure to open the
  Cherokee Outlet for settlement, white farmers saw
  opportunity on Indian lands all over the West.
• Throughout the 19th century, government land
  policy had made the public domain available at
  low prices to those willing to endure the
  hardships of frontier life.
• With the Homestead Act beginning in the 1860s,
  people could obtain title to land by paying a
  small fee, generally 1.25 per acre, residing on
  the land for five years, and making improvements
  on the land.
• With rising land values in the West, settlers had
  an interest in obtaining access to reservation
  lands.

48
Dawes Act (1887)

• The passage of the Dawes Act in 1887 provided the
  whites access to many, though not all,
  reservations.
• Whether and when allotment began varied across
  reservations, but once the process began,
  non-Indians had access to Indian land.
• Lands released from trusteeship could be bought
  and sold with clear title, and even prior to
  release they could be leased as a result of
  congressional action in 1891.
• Moreover, if there were surplus lands after
  allotment, they were opened to homesteading by
  anyone.

49
Hypothesis 2 (contd)

• Since survey and administrative expenses made it
  costly for the Office of Indian Affairs to allot
  a reservation, those areas in highest demand by
  non-Indians should receive first attention.
• Carlson finds that, as with the Cherokee Outlet,
  the data support the theory that Indian policy
  was heavily dominated by non-Indian interest
  groups.

50
Carlsons Test

• The demand theory of allotment helps explain when
  allotment occurred.
• "The more desirable a reservation was to
  outsiders, the more pressure they would have
  placed on the Office of Indian Affairs and the
  more likely that it would have been allotted
  sooner.

51
Carlsons Findings

• Carlson estimated the date of allotment as a
  function of a number of variables that would
  reflect a larger demand for allotment.
• These variables included rainfall, percent of
  improved land in the state in which the
  reservation is located, and population density of
  the state in which the reservation is located.
• As with the Cherokee Outlet, these data support
  the theory that Indian policy was heavily
  dominated by non-Indian interest groups.

52
Hypothesis 3

• Expectations were that allotment would lead to
  the end of the Indian bureaucracy.
• Subsequent growth of the BIA , however, suggests
  that the ringing of the death toll was premature.
  
• Rather than decline, the bureau continued to grow
  in both employment and budget, and other agencies
  responsible for education, housing, and welfare
  have increasingly devoted attention to the
  "Indian problem."

53
Hypothesis 3 (contd)

• Evidence of the BIA's recognition that it might
  be working itself out of a job comes from the
  words of the Commissioner of Indian Affairs in
  1906 "The grand total of the nation's wards will
  be diminished and at a growing ratio."
• But "instead of withering away according to the
  blueprint, the Indian Office vastly increased its
  involvement it became a sort of real estate
  agent, handling a multitude of land transactions
  for individual Indians."

54
BIA Expands its Mission

• The BIA found its raison d'etre with the passage
  of the Indian Reorganization Act in 1934.
• In addition to establishing tribal governments,
  the act ended the allotment process and froze
  most allotments for which fee patents had not
  been issued into perpetual trusteeship.
• McChesney notes that
• In its initial phases, allotment would serve
  bureaucrats' interest in greater budgets because
  it necessitated a growing Indian Office to
  administer the Dawes Act. . . . Ending allotments
  and freezing ownership for allottees still under
  federal trusteeship guaranteed that bureaucratic
  control would continue

55
A New Mission

• According to McChesney
• Every change in the sequence of allotment events
  from 1887 to 1934 led to an increase in the
  involvement of the federal government in Indian
  affairs, and each change can be explained by its
  ability to generate more work for the Indian
  bureaucracy, (p. 127)

56
Bureaucracies Fail but Survive by Changing

• Bureaucracies inevitably fail for reasons
  suggested above (e.g., individuals exploit
  uncontrolled margins)
• In part, the failures are met by concealed
  shifts in the objectives for the organization...
  if one examines the original arguments for
  establishment of almost any government bureau and
  compares these arguments with those that may be
  currently offered for the retention of the
  bureau, one is likely to find that a considerable
  shift has occurred in the specification of the
  objectives that the bureau is supposed to attain.
  The governmental bureau becomes a permanent
  fixture, with the objective continually changing.
  Over time the vested interests of the bureaucrats
  themselves become more and more important in
  justifying the organization."

57
Bureaucratic Self-Preservation

• The budget evidence mustered by McChesney is
  convincing.
• Not only did BIA budgets grow but that growth was
  significantly increased by both the number of
  allotments and the acreage allotted.
• But the rate of budget increase attributable to
  allotments declined over time, giving the BIA an
  incentive to find an alternative policy that
  would sustain bureaucratic growth.
• The Indian Reorganization Act, which began during
  the New Deal, provided the policy change that has
  driven the agency even to the present.

58
Conclusion

• There are, of course, arguments that the
  allotment experiment was a failure because it
  transferred so much land to whites, but there is
  no systematic evidence to test this proposition.
• Certainly vast amounts of land were transferred
  to whites, but by itself this is not prima facie
  evidence that Indians were left worse off.
• There is one conclusion, however, that is clear
  from the allotment episode rather than promoting
  self-reliance and self-determination for today's
  Indians, late 19th and early 20th century policy
  left reservation Indians entangled in a
  bureaucratic quagmire where they continue to be
  wards of the state.