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The Promise of Economic Integration: Evidence from the First Bank in an American Indian Nation

CICD Working Papers 2021-01 | Published April 28, 2021

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Authors

D.L. Feir CICD Research Fellow
Calvin Thrall University of Texas at Austin
Rachel L. Wellhausen University of Texas at Austin
The Promise of Economic Integration: Evidence from the First Bank in an American Indian Nation

Abstract

American Indian Nation “A” exercised its sovereign authority to license on its reservation the first-ever retail bank branch. The bank is owned by American Indian Nation “B,” which also makes it the first modern foreign-owned investment in Nation A. We conduct a first-of-its-kind survey of Nation A’s tribal members in the months before the bank’s groundbreaking. This unique opportunity allows us to investigate drivers of individuals’ support for and, crucially, willingness to become customers of the bank. Without deception, we explore effects of the bank’s Native identity, as well as randomized interventions communicating support from the Nation A government and the Federal Reserve System. We find widespread approval for the branch but at times counterproductive effects of the interventions, complicating the developmental promise of this instance of economic integration. Throughout, we advocate for the theoretical importance of American Indian nations as sovereigns making choices in international economic relations.