Where Does Economic Development Really Come From? Constitutional Rule Among the Contemporary Sioux and Apache

Governments are public goods that provide the organizational and legal structures by which societies arrange and enforce “rules of the game” that enable divisions of labor, exchange, and collective action. We argue that shared, pre‐constitutional cultural norms of political legitimacy among rational individuals provide the foundations of effective self‐government. The performance of contemporary Apache and Sioux economies on Indian reservations governed by common federally imposed constitutions is examined to test the framework. Unlike the impoverished Sioux, the relatively successful Apaches are found to have pre‐existing political norms that (serendipidously) match the structure of their formal constitution.