Where’s the glue? Institutional and cultural foundations of American Indian economic development Stephen Cornell*, Joseph P. Kalt 1 University of Arizona and Harvard University, Tucson, AZ 85719, USA Abstract Since the mid-1970s, the hundreds of American Indian reservations in the United States have been afforded substantial powers of self-government –from law enforcement and taxation to environmental and business regulation. The result has been a set of diverse efforts to overcome widespread poverty, with equally diverse outcomes. This study reports the results of research into the sources of devel- opment success during the “take-off” stage of self-government. Little evidence is found to support hypotheses that resource or human capital endowments hold keys to launching Indian economies. Instead, tribal constitutional forms appear to be make-or-break keys to development. Development takes hold when these forms provide for separations of powers and when their structures match indigenous norms of political legitimacy. © 2000 Elsevier Science Inc. All rights reserved. Prologue In the modern Western World, we think of life and the economy as being ordered by formal laws and property rights. Yet formal rules, in even the most developed economy, make up a small (although very important) part of the sum of constraints that shape choices; a moment’s reflection should suggest to us the pervasiveness of informal constraints. In our daily interaction with others, whether within the family, in external social relations or in business activities, the governing structure is overwhelmingly defined by codes of conduct, * Corresponding author. Tel.: +1-520-884-4393; fax: +1-520-884-4702. E-mail address: scornell@u.arizona.edu (S. Cornell). 1 Cornell is Professor of Sociology and Director of the Udall Center for Studies in Public Policy, University of Arizona. Kalt is Ford Foundation Professor of International Political Economy, John F. Kennedy School of Government, Harvard University. Together, we are codirectors of the Harvard Project on American Indian Economic Development. Journal of Socio-Economics 29 (2000) 443– 470 1053-5357/00/$ – see front matter © 2000 Elsevier Science Inc. All rights reserved. PII: S1053-5357(00)00080-9