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Discussion WebSite:http://www.commerce.otago.ac.nz/tourism/current-issues/homepage.htm Institutional Factors Influencing the Size and Structure of Tourism: Comparing Dalarna (Sweden) and Maine (USA)* David Vail Bowdoin College, Brunswick, Maine, USA Tobias Heldt Center for Transportation Economics, Dalarna University, Borlänge, Sweden This paper explains why neither Maine, USAs comparatively laissezfaire economic and land use institutions, nor Dalarna, Swedens more heavily regulated economy, seemswelldesignedtomaketourismapowerfuleconomicdevelopmentengine.The paperfocusesonthreeclustersofinstitutionsthathaveamajorinfluenceontourisms scale,economicstructure,andlong-termsustainability.Labourlawsandlabourmarket institutions are important determinantsof tourism employment, job quality, product mix,productionmethods,andregionalcompetitiveness.Landownershipandproperty rights influence both the incentives facing landowners, tourists, and tourism busi- nessesandstresseson ecosystemcarryingcapacity.Commodity taxesaffectthe abso- luteandrelativepricesofvarioustouristservicesand,viafeedbackeffectsondemand, influencetourisms aggregatescale,activitymixand transportation/locationpatterns. The paper employs institutional contrasts between Dalarna and Maine to frame hypothesesthatwillguidealargercomparativestudyofsustainabletourisminforest regions. Perhaps most controversially,we hypothesise that Swedens venerableright of common access (allemansrätten), as currently implemented, impedes sustainable tourism development. An appendix sketches the current state of tourism in the two regions. Purpose and Method This paper is the starting point for a study of strategies for economically sustainablenaturetourisminforestregions.Itfocusesonthreeclustersofinstitu- tions that have a major influence on tourisms scale, economic structure, and long-termsustainabilityinDalarnaCounty,Sweden,andtheUSstateofMaine. Tourismscalereferstomagnitudessuchasannualvisitornumbers,guestnights at commercial establishments, total tourist spending, economic multiplier effects, andemploymentlevels.1Tourismscorestructuralcharacteristicsarethe mix of commercial and non-commercial recreation, seasonal distribution of visits, land ownership and business organisation patterns, and methods of producingtouristservices.Sustainability,asusedhere,referstotouristactivities that meet two conditions: they function within ecological carrying capacity limits and they contribute to durable economic prosperity and social vitalityin host regions. Thethreekeyinstitutionalclustersaredescribed,compared,andcontrasted: …Labourlawsandlabourmarketinstitutions,whichareimportantdeterminants of tourism employment, job quality,2 product mix, production methods, and regional competitiveness. 1368-3500/00/04 0283-42 $16.00/0 © 2000 D. Vail & T. Heldt Current Issues in Tourism Vol. 3, No. 4, 2000 283 Institutions Determining Tourisms Scale and Structure 284 Current Issues in Tourism … , which affect tourisms economic poten- Land ownership and property rights tial by influencing the incentives facing landowners, tourists and tourist businesses, as well as the level of stress on ecosystem carrying capacity. …Commoditytaxesinfluencetheabsoluteandrelativepricesofvarioustourist services and, through feedback effects on demand,affect tourisms aggre- gate scale, activity mix, and transportation/location patterns. This paper uses institutional contrasts between Dalarna and Maine to frame the hypotheses that will guide our future investigations. Later sections present several such hypotheses and corollaries and flesh out the assertion that most Maineinstitutionslienearthelaissezfaireendofthepolitical-economicspectrum, whileSwedishtourismreflectsmoreextensivestateinterventionintheeconomy andpropertyrights.Labour,land,andtaxinstitutionsareby nomeanstheonly ones shaping tourism,but they areparticularly important.Future researchwill include comparative investigation of additional public institutions, such as transportation networks, education and training, and tourism research. A co-evolutionary institutional perspective Weemployaverybasicnotionofinstitutions,derivedfromtheworkofecono- mist Douglas North and summarised by Folke .: et al By institutions we mean the humanly devised constraints that shape humaninteractionandthewaysocietiesevolvethroughtime.Institutions are made up of formal constraints (rules, laws, constitutions), informal constraints (norms of behavior, conventions and self-imposed codes of conduct), and their enforcement characteristics. (Folke et al., 1997: 3) Startingfrom thisbroadunderstandingofinstitutions,itshouldbe clearthat tourisminindustrialsocietiesisenmeshed inawebofinstitutions,withstrands running from markets to property rights and from environmental ethics to public policies. This is the matrix within which tourisms key players – tourism service producers, trade associations, land owners, travel agents, seasonal employees, labour unions, local officials, national governments and, of course, leisure travellers themselves – make decisions and take action. Our premise is that, if we hope to explain the behaviour of individuals and organised interests andidentify their cumulativeeffects, we mustfirst understand the institutional rulesandnormsthatshapebehaviour.Thisessayattemptstounravelwebsmade up of both deliberately designed and informally evolved institutions and to showthemajorimpacttheyhavehadonthescaleandstructureoftourismintwo places, Maine (USA) and Dalarna (Sweden). It demonstrates how particular institutional differences operating within broadly similar societies can lead to quite different economic, equity and environmental outcomes. Theemphasisoninstitutionalisedrelationshipsandbehaviouralsoreflectsan interpretationofinstitutionsasanimportantpartofeverysocietysaccumulated ‘capital. Institutionalassets,such assharedvalues,knowledgeandethicalstan- dardscancontributetoordetractfromacollectivepurpose,inthiscasesustain- able tourism development. Institutional capital can be accumulated through deliberate investments (e.g. in legislation, education, formation of private organisations) or it can depreciate through neglect. From an evolutionary Institutions Determining Tourisms Scale and Structure 285 perspective, a lack of institutional resilience in the face of changing conditions andcollectivepurposescanrenderineffectiveorevencounterproductiveinstitu- tionsthatwereoncehighlyeffective.Forexample,severalfeaturesofbothSwed- ish and American labour market policy have proven to be maladapted to the policy objective of expanding the number of high quality tourism jobs in distressed rural regions. In contrast, institutions may adapt and prove resilient in changing circum- stances.Forexample,privatelandownerassociationshavebeen createdinboth MaineandDalarnatoreducetransactioncostsandcaptureinfrastructureecono- miesofscaleinbackcountryrecreation.Governmentmeasurestopromotesuch private institutional innovations are particularly intriguing (Becker & Ostrom, 1995; Folke et al., 1997). Dalarna and Maine: A ‘quasi-experiment AfewwordsareinorderaboutwhyDalarnaCountyandinteriorMainewere chosen as a basis for assessing the potential for sustainable tourism develop- ment.Wellbeforetourismbecameamassphenomenontowardtheendofthelast century,Dalecarliasvisitors,includingstory-tellerH.C.Andersenandheritage park builder Arthur Hazelius, and travellers in Maines vast northern wilder- ness, such as naturalist Henry David Thoreau and novelist Nathaniel Hawthorne,wereshapingaculturalmystiquethatstillsurroundstheseplaces. Themystiquewasreinforcedinthepopularimaginationbyturn-of-the-century artistssuchasCarlLarsson,AndersZornandWinslowHomer.Acenturylater, DalarnaandMainestillretainthespecialallureofplacesthatareaccessibleand yet‘offthebeatenpath,withdistinctivefolkwaysandstunninglakeandmoun- tain scenery.3 Dalarna and Maine are both predominantly rural, with extensive mountain rangesandthousandsoflakesandponds.Withthereturnofmarginalfarmland to forest, over 90% of the land area is forested. Three-fourths of Dalarnas land area is privately owned, while the Maine figure is close to 95%. The southern partsofbothregionsarewithinaneasydaysdriveforprospectivevisitorsfrom majormetropolitancentres:Stockholm,Göteborg,andOslo;Boston,NewYork, andMontreal.Economicconditionsinbothplaceshistoricallyroseandfellwith the fortunes of natural resource-based industries, which, for complex reasons, are now mature or declining. Policy makers seeking new ruraldevelopment opportunities haveidentified tourism as a clean, green, and labour intensive way to grow: exploiting underutilised naturalandhumancapital,diversifyingtheeconomicbase,creat- ingjobs,andrevitalisingruralcommunities.ThisambitionisreflectedinMaines 1995 tourism Marketing and Development Strategy: ‘Within the context of an emergingglobaleconomy,thegrowthofthetourismindustry...bringsjobsand stabilitytothestate(MOT,1995:2).Thestrategysetsatourismgrowthtargetof 3%peryear,comparedto2+%fortheoveralleconomy.DalarnasCountyBoard echoes that, ‘There are big hopes in the county for an increase in tourism and employment within tourism. These hopes take as their starting point that Dalarna is [already] a major tourist county and that tourism internationally is one of the fastest growing industries(LD, 1998: 3). Beyond its contributions to income, employment and tax revenues, Dalarna tourism is expected to help 286 Current Issues in Tourism maintainquality of life in host communities via better physical facilities, social services and cultural activities. Thereis,inparticular,awidespreadconvictionthat‘Naturehasauniqueand increasinglyimportantplacein theleisurelifeofverylargenearbypopulations. Mainetourismpromotionsmakemuchofthe factthatthestatehasthe largest contiguous forest ‘wildland east of the Mississippi River, including the only designatedwildernesswaterway,thenorthernterminusofthe3000kmAppala- chian Trail, and 40,000 moose to shoot with camera or rifle. Sahlberg paints a similar picture of interior Sweden: Theenvironmentinitsentiretywithcleanairandcleanwaters,thelackof noiseandcrowdinghasgotqualitiesthatseldomarefoundatotherplaces in Europe...TheseconditionstogetherwiththeSwedishrightofcommon access make these areas unique in Europe. (Sahlberg, 1998: 229) Insum,DalarnaandMaineofferafruitfulbasisforcomparativestudyoftour- ismdevelopmentfortworeasons.First,thereareimportanthistoric,geographic andeconomicparallels.Second,policymakersareconvincedtheirjurisdictions areuniquelysituatedtomaketourismamajorengine ofeconomicgrowth.This paper explains why, in fact, neither Maines comparatively laissez faire institu- tionsnorDalarnasmoreheavilyregulatedtourismseemswelldesignedforthat purpose. Although Dalarna and Maine do not offer a controlled laboratory to investigate institutional variations, the overlay of specific differences on basic institutionalsimilaritiesgives us a promising ‘quasi-experiment for generating and testing hypotheses. Labour Market Institutions: Costs, Rigidities and Incentives Dalarnas high cost tourism labour There are no regional or sectoral differences in Swedens labour laws and institutions; thus what goes for Sweden also goes for Dalarna. Historically, Swedish wage formation and the regulations governing many labour market institutions were based largely on conditions in manufacturing industries, wherefull-time, career-long jobs were the norm. Today service sectors employ mostworkers,andpart-timeandlimited-termemploymenthavebecomemuch morecommon.Publicpoliciesandcollectivebargainingarrangementsdesigned for other sectors and earlier times have a major impact upon the rural tourism labour market. Unionisation, collective agreements and average tourism wages Sweden has no statutory minimum wage. Instead, collective agreements between employee organisations and employer organisations or individual employersregulatepayarrangementswithineachlineofbusiness. Fortourism industryemployees,the1997startinghourlywageforadultworkerswasSEK65 ($8.70),but theaveragegrosswagereportedbytheHotelandRestaurantunion, which organises most tourist industry employees, was SEK 96/hour ($12.80). Gross wages include vacation pay and supplements for night and weekend work4(HoR,1998).Table1showsthewiderangeofannualearningsinvarious tourism-related sub-sectors. (The ‘All Tourism figure is a weighted average
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