In 2026, the United States of America marks 250 years since its independence.1 The founding documents of the United States planted the seeds of a liberal democracy, but it took decades, if not centuries, for liberal-democratic principles to be nominally extended to all people. Many minority groups have advocated and agitated to be fully included in democratic deliberation and to receive equal rights under the law. In modern American society, tensions still exist between liberal aspirations and illiberal practices, affecting the lives and livelihoods of many people (Hahn 2024). In the study of the evolution of American liberal democracy, an understudied and underdiscussed topic is the experience of Native Americans.

This paper argues that for most of the history of the United States, the federal government’s policies toward Native Americans were largely illiberal and undemocratic, leaving a legacy of complex and convoluted governance institutions. The policies were illiberal because civil, political, and economic freedoms were severely curtailed. The policies were undemocratic because governance institutions were often forced on unwilling populations who had little, if any, say in how they were governed. The current institutions that emerged from this history limit the ability of tribal governments and tribal members to engage in socially productive activities.

Despite this legacy, the past few decades have seen some institutional reforms in both the federal government and tribal governments, making them more liberal, democratic, and economically productive; however, further reforms are needed

Before colonization, Native American nations had complex systems of governance that rivaled many of their European counterparts, and sophisticated trade networks stretched across North America (Washburn et al. 2011; Watson et al. 2015; Wills 2017; Crepelle 2022; Lofthouse and Coyne 2024). However, European colonists dispossessed Natives of their land and resources, disrupting indigenous governance systems and trade networks.

After independence, the U.S. Constitution gave the federal government vast control over how Native American nations were governed. From the late18th century through the mid-20th century, the federal government employed various policies that were meant to assimilate Native peoples into broader Euro-American culture, as well as allocating Native-controlled resources to white Americans. Such federal policies included the allotment of reservation land to turn Native Americans into Jeffersonian farmers, but federal agents closely supervised and controlled how they used their land. The federal government held the land in trust because Native peoples were seen as incompetent to run their own affairs (Lofthouse 2019a, 2019b; Anderson and Parker 2024; Crepelle 2022, 2023a). These assimilation policies also included removing children from their families and placing them in boarding schools or adopting them into white families, as well as restricting Native Americans from practicing traditional religion (Davis 2001; French 2005; Lajimodiere 2019; National Indian Law Library 2025).

It was not until the mid-20th century that the liberal-democratic ideals expressed in the Declaration of Independence and the Constitution were expanded to include Native Americans. However, several institutional pathologies still exist that harm the flourishing of Native individuals and nations. For instance, civil and criminal jurisdiction is generally unclear, and people tend to avoid doing business on reservations or with tribal enterprises. Additionally, the trust relationship between the federal government and tribes raises transaction costs on economic activity by imposing bureaucratic red tape on the use of land and other resources. Who pays taxes to whom is also a difficult question because taxation is dependent on one’s identity and location. Thus, economic activity is made arbitrarily more costly and difficult, exacerbating the already high levels of poverty across “Indian Country.”

In recent decades, federal and tribal policymakers have been proposing and implementing reforms to improve the quality of the institutions, helping to overcome centuries of oppression and poverty. For example, policymakers have been streamlining red tape, adopting commercial codes, or starting tribally run enterprises (Anderson and Ratté 2022). Undoing the harm caused by nearly two centuries of illiberal and undemocratic institutions has been difficult and slow going, but many tribal leaders are determined to use their sovereignty to reconstruct their governance institutions to promote their own prosperity and self-determination.

This paper contributes to the literature on Native American governance and economic development by outlining how the legacy of illiberal and undemocratic institutions leads to widespread economic stagnation and legal confusion. Despite these challenges, institutional reforms have improved liberal-democratic governance for Native Americans, and there is hope that further institutional reforms can continue to promote liberty and self-determination for Native peoples (see McChesney 1990; Cornell and Kalt 1995; Anderson and Parker 2008, 2009; Akee and Jorgensen 2014; Lofthouse 2019a, 2019b; Regan and Anderson 2014; Crepelle 2021a, 2021b, 2022, 2023a; Anderson and Parker 2024).

To build the argument, this paper is structured in the following way. Section 2 reviews the historical evolution of Native American governance and how the United States imposed illiberal and undemocratic policies on Native nations. Section 3 analyzes the legacy of these illiberal and undemocratic institutions and how those institutions affect the legal and economic outcomes for tribal governments and tribal members today. Section 4 discusses previous reforms that have made governance more liberal and democratic on reservations, as well as potential reforms that could further improve conditions. Section 5 concludes with the normative implications of this research.

KEYWORDS: Native American, Liberalism, Colonialism, Self-governance, Indigenous Peoples