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Tom Flanagan is a professor of political science at the University of Calgary and co-author of Beyond the Indian Act: Restoring Aboriginal Property Rights.
Reports of people living in tents and shacks at Attawapiskat evoke comparisons with the Third World, with people living in the shantytowns of South Africa and the barrios of Mexico. The comparison is apt, because we now know a lot about how people in the Third World have elevated themselves out of extreme poverty.
Stable government is essential. Failed states, such as Somalia and the Democratic Republic of the Congo, produce colossal misery. But it must be the right kind of government. Regimes that arbitrarily violate the rule of law, such as Robert Mugabe’s Zimbabwe, or concentrate all property rights in the state, such as China under Mao, produce poverty on a mass scale. Redistribution through foreign aid also does not work. Countries that have received the most foreign aid, such as Tanzania under Julius Nyerere, have performed poorly.
Democracy is desirable for many reasons but does not in itself lead to economic progress; think of India before the opening of its economy. And authoritarianism can sometimes produce economic advancement, as with China after Mao and Chile under Augusto Pinochet.
Truly progressive governments recognize individual property rights and enforce the rule of law, thus allowing people to reap the rewards of their initiatives. Individual property, voluntary yet enforceable contracts, open markets – these have been the holy trinity of economic progress in the Western world since the Industrial Revolution, and they are transforming China, India, Brazil and many other previously impoverished countries.
The formula for progress is no different for first nations, which constitute the so-called Fourth World made up of colonized peoples within North America. Their road to advancement runs not through dependence on government transfers but through property rights, contracts and markets, leading to genuine self-determination.
In the United States, the utility of “stable, fair, effective and reliable governing institutions” has been demonstrated in numerous case studies conducted by the Harvard Project on American Indian Economic Development. Researchers from the Property and Environment Research Center in Montana have shown that individually owned Indian land is far more productive than collectively owned land, and that tribes that uphold the rule of law by allowing litigants to have access to state courts rather than tribal courts experience faster economic growth.
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