Contents lists available at ScienceDirect Forest Policy and Economics journal homepage: www.elsevier.com/locate/forpol The effect of institutional arrangements on economic performance among first nations: Evidence from forestry in BC ☆ Harry Nelson a, ⁎ , William Nikolakis a , Kira Martin-Chan b,1 a Faculty of Forestry, University of British Columbia, Vancouver, BC V6T 1Z4, Canada b Vancouver School of Economics, University of British Columbia, Vancouver, BC V6T 1L4, Canada ARTICLE INFO Keywords: First nations Forest policy Institutional economics Property rights British Columbia ABSTRACT Using a unique data set constructed from timber harvesting opportunities granted or acquired by First Nations (FN) in British Columbia through different kinds of tenure agreements, we investigate what characteristics of the timber, the type of tenure and community characteristics affect harvest outcomes. We find that on average 67% of the available volume has been harvested (measured by the maximum amount that could have been harvested under the tenure) and that as economic theory would predict, more valuable timber, along with more secure harvesting rights, enhance performance. Equally important we find that those tenures held by FN that have engaged in governance reform through changing their political processes also show higher harvest levels. These finding support work elsewhere showing that institutional arrangements are important in explaining improved socioeconomic outcomes, not only for indigenous and non-indigenous communities but society more broadly. 1. Introduction The strength of institutional arrangements has been increasingly recognized as an important determinant of economic growth and prosperity (North, 1991; Acemoglu et al., 2005). It is also seen as an important factor in moderating the effects of natural resources in community development situations, as resources can contribute to growth under strong institutional arrangements or be a detriment to growth in the presence of weak institutions (Van der Ploeg, 2011, Sachs and Warner, 2001). The debate over what role natural resources play and the relative importance of institutional arrangements has largely taken place at the national scale, through analyses of different trajec- tories for various resource-dependent nation-states (Isham et al., 2005). But, these economic development issues are also important at subna- tional scales, such as in the case of regional economies or communities that are either resource-dependent or look to natural resources to spur or stimulate economic development. However, at this scale, the focus in the literature switches and an analytical emphasis on institutional ar- rangements is dropped. Instead, studies look either towards macro- trends such as the role of technology and globalization and how those are impacting resource-based sectors (Report of the Standing Committee on Natural Resources, 2008; Acemoglu and Restrepo, 2016) or to what extent cyclical commodity prices may drive resource booms and busts, with the subsequent deleterious effects (England and Albrecht, 1984). We argue that institutional arrangements also play an important role at this scale and that they are largely overlooked in subnational economic development literature. This is perhaps because it is assumed that there is more limited opportunity to effect different institutional arrangements at the sub-national scale within different jurisdictions. Instead, differences in outcomes are more typically asso- ciated with differences in resource dependence and how these affect the local political economy and how these factors may then skew regional economic outcomes (Isham et al., 2005; IMF, 2010). The above conclusion is not necessarily the case when it comes to indigenous peoples, many of whom are seeking to rebuild their gov- ernance institutions and increasingly taking on greater authority for managing lands and resources in Canada and elsewhere (). The role of indigenous people in Canada has been changing as jurisprudence and policy are beginning to address long-persisting socioeconomic dis- parities and historic exclusion of indigenous peoples from their land and resources. One outcome of those changes is that indigenous peoples are increasingly engaging in self-governance to reclaim greater https://doi.org/10.1016/j.forpol.2019.05.008 Received 30 May 2018; Received in revised form 6 March 2019; Accepted 13 April 2019 ☆ This article is part of a special issue entitled. “Governing our forests: The evolving political economy of multiple values and multiple stakeholders” published at the journal Forest Policy and Economics 107C, 2019. ⁎ Corresponding author at: Faculty of Forestry, University of British Columbia, Forest Sciences Centre 4609, 2424 Main Mall, Vancouver, BC V6T 1Z4, Canada. E-mail address: Harry.nelson@ubc.ca (H. Nelson). 1 We would like to acknowledge the work of William Wright (BSF 2013); Tim Hawkins (BSc 2016) in compiling this database and Neil Edwards (FLNRO) for his assistance in providing data and validation. This work was supported by SSHRC. Forest Policy and Economics xxx (xxxx) xxx–xxx 1389-9341/ © 2019 Elsevier B.V. All rights reserved. Please cite this article as: Harry Nelson, William Nikolakis and Kira Martin-Chan, Forest Policy and Economics, https://doi.org/10.1016/j.forpol.2019.05.008