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Tourism Management 36 (2013) 120e132

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Tourism Management

journal homepage: www.elsevier .com/locate/ tourman

Political economy of tourism: Trust in government actors, political support, and their determinants

Robin Nunkoo a,c,*, Stephen L.J. Smith b,1

aDepartment of Management, Faculty of Law and Management, University of Mauritius, Reduit, Mauritius bDepartment of Recreation and Leisure Studies, University of Waterloo, Burt Matthews Hall, 200 University Ave. W. Waterloo ON N2L 3G1, Canada c Faculty of Management, University of Johannesburg, South Africa

h i g h l i g h t s

< Trust in government is a good determinant of political support. < Political performance of government is the strongest predictor of trust. < Social exchange theory is partially supported. < No empirical support for cultural theory of political trust. < Strong empirical support for institutional theory of political trust.

a r t i c l e i n f o

Article history: Received 2 September 2012 Accepted 26 November 2012

Keywords: Political support Trust in government actors Institutional theory of political trust Cultural theory of political trust Social exchange theory Political economy

* Corresponding author. Department of Manage Management, University of Mauritius, Reduit, Maurit

E-mail addresses: [email protected], rnunkoo [email protected] (S.L.J. Smith).

1 Tel.: þ1 519 888 4567; fax: þ1 519 747 1141.

0261-5177/$ e see front matter � 2012 Elsevier Ltd. http://dx.doi.org/10.1016/j.tourman.2012.11.018

a b s t r a c t

This study developed a comprehensive model of residents’ trust in government actors and political support for tourism based on social exchange theory, institutional theory of political trust, and cultural theory of political trust. The model was tested on a sample of 391 residents of Niagara Region, Ontario, Canada, using confirmatory factor analysis and structural equation modelling. Findings suggested that residents’ perceptions of the benefits and costs of tourism and their trust in government actors were significant determinants of political support. Their perceptions of the political and economic perfor- mance of government actors significantly predicted trust in government actors. Interpersonal trust, perceived costs of tourism, and perceived power in tourism decision-making were insignificant deter- minants of trust. The study found partial support for social exchange theory. Cultural theory of political trust was not found to be relevant, while strong support was found for institutional theory of political trust.

� 2012 Elsevier Ltd. All rights reserved.

1. Introduction

The negative consequences of tourism development on local communities have led researchers emphasise on the sustainability of the sector (Choi & Sirakaya, 2006). It is now widely accepted among scholars and destination practitioners that sustainable tourism requires that residents are involved in the planning process of and actively support the sector (Diedrich & Garcia-Buades, 2009; Dyer, Gursoy, Sharma, & Carter, 2007; Latkova & Vogt, 2012; Nunkoo & Ramkissoon, 2011, 2012). Recognizing communities’ central role in tourism, researchers have widely investigated

ment, Faculty of Law and ius. Tel.: þ230 403 7400. @uwaterloo.ca (R. Nunkoo),

All rights reserved.

residents’ perceptions of tourism impacts and their support for the sector’s development (e.g. Nunkoo & Ramkissoon, 2011, 2012; Nunkoo & Gursoy, 2012). The premise of these studies rests on the assumption that residents’ perceptions of tourism are at least as important as the actual benefits and costs of the sector, if not more so (McGehee & Andereck, 2004).

Various theories have been used to explain the ways in which residents react to tourism development. While each theory has contributed in its own ways to this area of investigation, social exchange theory (SET) has been the most widely utilized and has made significant contributions to studies on residents’ support for tourism (Gursoy, Chi, & Dyer, 2010). AP (1992) described SET as “a general sociological theory concerned with understanding the exchange of resources between individuals and groups in an interaction situation” (p. 668). Applied to a tourism context, SET posits that residents’ support is determined by their perceptions of the benefits and costs of tourism development. A key concept of

R. Nunkoo, S.L.J. Smith / Tourism Management 36 (2013) 120e132 121

SET is trust among the actors involved in a social exchange rela- tionship (Blau, 1964; Cropanzano & Mitchell, 2005). The funda- mental role of trust in social exchanges is reinforced because exchange of benefits is a voluntary action and entails unspecified future obligations (Konovsky & Pugh, 1994). The persistence and extension of social exchange are based on implicit trust among the actors involved in an exchange relationship (Blau, 1964). In the absence of trust, opportunities for mutually beneficial co- operations among social actors would have to be forgone (Arrow, 1971; Bowles & Gintis, 2002).

The studies by Beritelli (2011) and Beritelli, Bieger, and Laesser (2007) reinforce the need for researchers to consider trust as an important ingredient for cooperation among tourism actors and effective destination management. One of the lacunae of existing studies on community support for tourism is that the majority of them have omitted trust as a key component of SET. This omission needs to be addressed by future studies to ensure that the full potential of SET in explaining community support for tourism is achieved. Also, notwithstanding the contributions of SET to this research area, the theory has been criticized by some researchers (Pearce, Moscardo, & Ross, 1996; Ward & Berno, 2011). SET assumes that individuals are rationale decision-makers, processing informa- tion systematically. However, research from psychology suggests that humans are more likely to be cognitive misers who use mental shortcuts that result in quick but inaccurate solutions instead of engaging in an effortful mental processing (Fredline & Faulkner, 2000; Nunkoo & Ramkissoon, 2009; Pearce et al., 1996). SET is also based on the premise that a person’s knowledge is derived from direct experiences with tourism, when in reality such knowledge is socially derived (Fredline & Faulkner, 2000). Given these limitations, it is important that SET is complemented with other theoretical approaches to investigate community support for tourism to provide new perspectives to this scientific area of investigation.

This paper develops a comprehensive model that predicts resi- dents’ trust in government actors and political support for tourism based on three different theories: SET, institutional theory of political trust (ITPT), and cultural theory of political trust (CTPT). Grounded in a political economy perspective, the study investigates the concept of trust in the context of a social exchange relationship between residents and local government actors involved in tourism development. Political economy suggests that government has a central role in tourism planning and regulation of the sector

Notes: PST: political support for tourism; PBT: perceived benefits o in government actors; PPT: perceived power in tourism; P actors; PPP: perceived political performance of government a

PPT

PEP

PPP

IPT

TGA

PBT

PCT

H8

H7

H4

H3

H5

H9

H10

H11

H12

Fig. 1. The propo

(Bramwell, 2011). Thus, trust is conceptualized as residents’ trust in government actors (also referred to as political trust or citizens’ trust in institutions) involved in tourism development. Addition- ally, the study uses ITPTand CTPT to investigate the determinants of residents’ trust in government actors. Fig. 1 shows the proposed model of the study which was tested on a sample of 391 residents of Niagara Region, Ontario, Canada, using structural equation modelling (SEM).

This paper makes some valuable contributions to existing literature. Despite the centrality of trust in social exchanges (Cropanzano & Mitchell, 2005) and its importance for good governance of the tourism sector (Beritelli, 2011; Beritelli et al., 2007), very little is known about its role in tourism planning and development. Few researchers have considered trust in the context of community support for tourism (e.g. Nunkoo & Ramkissoon, 2011, 2012; Nunkoo, Ramkissoon, & Gursoy, 2012), yet these studies contain some theoretical limitations that need to be addressed. Although Nunkoo and Ramkissoon (2011, 2012) provide valuable insights on the role of trust in fostering community support, the studies are limited because the models tested were developed solely on the postulates of SET. These studies do not provide any insights on the determinants of residents’ trust in government actors in tourism. Nunkoo et al.’s (2012) used ITPT and CTPT to investigate the antecedents of residents’ trust in govern- ment actors. However, the study considered trust as the only determinant of community support for tourism and failed to take into account two important variables of SET (residents’ perceptions of the benefits and costs of tourism) that have been found to be strong predictors of residents’ support in many previous studies (e.g. Ko & Stewart, 2002; Nunkoo & Gursoy, 2012).

The implications of these are that existing research on this topic is based on incomplete theoretical propositions and may be lacking in predictive power. It is therefore important that these studies are enhanced and made theoretically more robust so that a more accurate analysis of residents’ support for tourism is achieved. It is also important thatmore research is carried out on residents’ trust in government actors and its determinants given the paucity of research on this topic in tourism. The study of trust in tourism is more than ever important because several recent studies alert us of declining societal trust and citizens’ trust in government institutions (e.g. Scheidegger & Staerkle, 2011), including those of tourism (Bramwell, 2011). By empirically testing the model illustrated in

f tourism; PCT: perceived costs of tourism; TGA: trust EP: perceived economic performance of government ctors; IPT: interpersonal trust.

PST

H1

H2

H6

sed model.

R. Nunkoo, S.L.J. Smith / Tourism Management 36 (2013) 120e132122

Fig. 1, the study provides new theoretical perspectives on residents’ trust in government actors and their support for tourism. Findings from this study may also have significant influence on the gover- nance and management of tourism. Policy-makers could benefit from a better understanding of residents’ trust in government actors in tourism and their support for the sector’s development.

2. Political economy of government intervention

Political economy is concerned with the political nature of decision-making and with how politics affects choices in a society. It provides an understanding of structures and social relations that form societies in order to evoke social change towards more equitable and democratic conditions (Mosedale, 2011). Political economy offers a useful perspective to study tourism development and government processes (Bramwell, 2011). This approach considers that the state has an influential role in managing and promoting tourism (Wang & Bramwell, 2012; Webster, Ivanov, & Illum, 2011). Government is the principal actor in the political process of tourism development (Bramwell, 2011) and has usually adopted a more interventionist approach in tourism development than in other sectors (Ruhanen, 2013). Government controls the industry through formal ministries, other institutions, legislations, and various programs and funding initiatives (Elliot, 1997), and intervenes in tourism for environmental, political, and economic reasons (Nyaupane & Timothy, 2010). According to Hall (2005), government has seven functions in tourism development: coordi- nation, planning, legislation and regulation, entrepreneurship, stimulation, social tourism, and public interest protection roles.

Traditionally, economic concerns were the principal reasons for governments to intervene in tourism (Bramwell, 1994). Overtime, the negative effects of tourism and local residents’ reluctance to accept development have meant that governments’ roles in the sector have extended beyond economic considerations to address the environmental and social consequences of development. The diffusion of the sustainable development concept in the 1980s has also led governments to assume greater roles and responsibilities in tourism planning (Ruhanen, 2013). Governments now usually attempt to secure a balance between economic priorities, the environment, and the local society in order to gain political support for tourism development (Bramwell, 2011). Political economy suggests that a politically stable relationship between the state and the citizens is important to maintain political legitimacy and effective authority (Purcell & Nevins, 2005) and to ensure the state’s ability to reflect the popular will (Bramwell, 2011). Political legitimacy cannot be achieved without residents’ trust in govern- ment and their support for tourism development.

While political economy is a broad social perspective that scholars and analysts can use to study the motivations, roles, and effects of a state’s activities in tourism development, distribution of tourism benefits among society members, citizens’ trust in government actors, and political support for tourism (Bramwell, 2011; Dredge & Jenkins, 2007; Mosedale, 2011), SET, ITPT, and CTPTenable an empirical testing of the relationships among the key concepts of political economy. More specifically, these theories provide an understanding of the determinants of political trust and how residents’ perceptions of the benefits and costs of tourism and their trust in government actors interact to influence political support for tourism development.

2.1. Political support for tourism

Support is an “attitude by which a person orients himself to an object either favourably or unfavourably, positively or negatively” (Easton, 1965, p. 436). Government requires a certain amount of

political support for its policies to persist or flourish (Gregory & Gibson, 1992). In a tourism context, political economy suggests that it is important for government to maintain legitimacy and influence on governance processes by ensuring that the local pop- ulation supports its policies (Wang & Bramwell, 2012). Residents’ support for tourism is influenced by their perceptions of the benefits and costs of the sector. Tourism development results in investment opportunities, better infrastructure, employment opportunities, more public development, and improvement in the local economy (Latkova & Vogt, 2012; Nunkoo & Ramkissoon, 2011). Tourism also provides opportunities for cultural exchanges (Besculides, Lee, & McCormick, 2002) and increases entertainment opportunities for local people (Andereck & Nyaupane, 2011; Latkova & Vogt, 2012). Several studies report a positive relationship between perceived benefits and support for tourism (Latkova & Vogt, 2012; Nunkoo & Gursoy, 2012; Nunkoo & Ramkissoon, 2011). Based on the preceding discussion, the following hypothesis is proposed:

Hypothesis 1 (H1): There is a direct positive relationship between residents’ perceptions of the benefits of tourism and their political support for the sector’s development.

Development of tourism also results in several costs to local communities that may threaten the legitimacy of government and its political support (Wang & Bramwell, 2012). Tourism increases costs of living and the price of land and housing (Latkova & Vogt, 2012; Liu & Var, 1986); leads to a lack of economic diversification (Jackson & Inbarakan, 2006); and negatively affects a community’s traditional employment patterns (Nunkoo & Gursoy, 2012). Tourism may also destroy the natural environment; increase environmental pollution (Dyer et al., 2007; Nunkoo & Ramkissoon, 2011); cause litter; create traffic congestion (Latkova & Vogt, 2012); increase prostitution in a destination area (Nunkoo & Ramkissoon, 2011): increase vandalism; and change local culture (Dyer et al., 2007). In support of SET, a number of studies empirically demon- strate that a negative relationship exists between residents’ perceptions of the costs of tourism and their support for the sector’s development (e.g. Gursoy et al., 2010; Ko & Stewart, 2002; Nunkoo & Gursoy, 2012; Nunkoo & Ramkissoon, 2011). This discussion led to the following hypothesis:

Hypothesis 2 (H2): There is a direct negative relationship between residents’ perceptions of the costs of tourism and their political support for the sector’s development.

Residents’ perceptions of tourism impacts are not held in isola- tion. A change in the perceptions of one type of impact is likely to influence other types of impacts. Gursoy and Kendall (2006) argued that “themost salient impact is likely to influence the perceptions of all other impacts” (p. 610). Although the relationship between perceived benefits and costs is notwell established in the literature, there is some evidence confirming that interactions exist among residents’ perceptions of the different impacts of tourism. For example, Gursoy and Kendall’s (2006) and Gursoy and Rutherford’s (2004) studies revealed a significant negative relationship between perceived benefits and costs of tourism. Based on the above empirical evidence, the following hypothesis is developed:

Hypothesis 3 (H3): There is a direct negative relationship between residents’ perceptions of the benefits of tourism and their perceptions of the costs of tourism.

2.2. Residents’ perceived level of power

Power is a central concept of SET (Emerson, 1962) and is an underlying theme of political economy (Mosedale, 2011). It is defined as the capacity of individuals to make decisions that affect their day-to-day lives (Johnson & Wilson, 2000). Existing tourism literature considers power as key issue in destination management

R. Nunkoo, S.L.J. Smith / Tourism Management 36 (2013) 120e132 123

and governance (e.g. Beritelli & Laesser, 2011; Beritelli et al., 2007; Reed, 1997). Power gains additional significance because destina- tions comprised of diverse stakeholders influencing or trying to influence the formulation of tourism policy and the ways in which it is implemented (Beritelli & Laesser, 2011; Hall, 1994). All deci- sions affecting tourism development, the nature of government intervention, management of tourism, and community tourism issues emerge from a political process, all of which involve actors in a struggle for power, reflecting different values and priorities (Hall, 2003). Power issues among stakeholders also explain inherent imbalances in destination governance (Beritelli et al., 2007). Usually, the less influential groups are marginalized in tourism development because power relationships among stakeholders are inherent to society, both within local communities and with actors affecting those communities (Holland, 2000; Reed, 1997).

SET posits that the level of power of an actor has a considerable influence on the social exchange process because power deter- mines the ability of the actor to take advantage of the outcomes of tourism development (AP, 1992; Cook & Emerson, 1978). An actor with low level of power is usually negatively disposed towards the exchange relationship AP (1992). Local communities usually have the least influence on tourism planning and governance processes (Moscardo, 2011). Their level of power influences their disposition towards tourism development. For example, a number of studies have demonstrated empirically that residents’ perceived level of power in tourism planning is positively related to their perceptions of the benefits and negatively related to their perceptions of the costs of tourism (Madrigal, 1993; Nunkoo & Ramkissoon, 2011). Contrary to these studies, Latkova and Vogt (2012) did not report any significant relationship between residents’ perceived level of power and their perceptions of tourism. This discussion led to the following hypotheses:

Hypothesis 4 (H4): There is a direct positive relationship between residents’ perceptions of their level of power in tourism development and their perceptions of the benefits of tourism.

Hypothesis 5 (H5): There is a direct negative relationship between residents’ perceptions of their level of power in tourism development and their perceptions of the costs of tourism.

2.3. Trust in government actors

Trust is a relational construct (Markova & Gillespie, 2008) that is inherent to SET (Blau, 1964). Trust between actors (e.g. residents and government) is fundamental in the emergence and mainte- nance of social exchanges between two parties (Cropanzano & Mitchell, 2005). Political trust (i.e. residents’ trust in government) is the belief that the political system or some of it will produce preferred outcomes (in tourism development) even in the absence of constant scrutiny (Miller & Listhaug, 1990). Studies on political trust are driven by the importance of linking citizens to institutions, the desire to achieve good governance, and the need to gain public support for development (Scheidegger & Staerkle, 2011). Political trust is important because it conveys a message to the governing elite whether or not their policy decisions conform to the norma- tive expectations of the governed (Citrin & Luks, 2001).

In any model of destination governance, trust is a key compo- nent of the relationship between individuals and government institutions and is important for consensual decision-making and actions in tourism development (Beritelli et al., 2007). Discussing the importance of public trust in government for a democratic society, Nye, Zelikow, and King (1997) noted that:

If people believe that government is incompetent and cannot be trusted, they are less likely to provide [critical] resources. Without critical resources, government cannot perform well,

and if government cannot perform, people will become more dissatisfied and distrustful of it. Such a cumulative downward spiral could erode support for democracy as a form of gover- nance (p. 4).

A number of studies confirm the significant influence of trust on people’s support for government policies. Nunkoo and Ramkissoon (2012) and Nunkoo et al. (2012) found that residents’ trust in tourism institutions positively influenced their level of support for tourism development. A number of other studies have validated the relationship between trust in government and political support for government policies (e.g. Gabriel & Trudinger, 2011; Hetherington, 2004; Hetherington & Globetti, 2002; Rudolph & Evans, 2005). Based on this discussion, the following hypothesis is developed:

Hypothesis 6 (H6): There is a direct positive relationship between residents’ trust in government actors in tourism and their political support for the sector’s development.

SET postulates that the benefits and costs resulting from a social exchange relationship influence the trust of one actor on the other (Blau, 1964). These benefits/costs can be of either an economic or non-economic nature (Farrell, 2004). In a political context, the outcomes of a social exchange relationship between the govern- ment and citizens influence political trust. Government institutions create policies and in return, they receive trust from those indi- viduals who are satisfied of these policies, and cynicism and mistrust from those who are dissatisfied (Citrin, 1974). Nunkoo and Ramkissoon’s (2012) study demonstrated that residents’ percep- tions of the benefits of tourism positively influenced their trust in government actors while perceptions of the costs adversely influ- enced trust. Hence, the following hypotheses are formulated:

Hypothesis 7 (H7): There is a direct positive relationship between residents’ perceptions of the benefits of tourism and their trust in government actors.

Hypothesis 8 (H8): There is a direct negative relationship between residents’ perceptions of the costs of tourism and their trust in government actors.

3. Institutional determinants of trust in government actors

Researchers have made use of two competing theories to explain the origins of citizens’ trust in government institutions: ITPT and CTPT. ITPT is based on the assumption that trust stems from the extent to which people perceive political institutions to work effectively (Hetherington, 1998). Here, trust is dependent on how people evaluate the performance of institutions with respect to their expectations (Luhiste, 2006; Mishler & Rose, 2001). In tourism development, citizens often hold the government responsible for policy decisions and call upon the state to improve sustainability practices that affect their daily lives (Bramwell, 2011). The performance of government actors in tourism has a direct bearing on how citizens view the government.

3.1. Economic performance of government actors in tourism

Political economy suggests that a key role for the government is intervention to encourage the conditions for capital accumulation and economic expansion (Bevir, 2009). In the context of tourism, government often gives priority to economic growth over envi- ronmental and social concerns (Wang & Bramwell, 2012). Institu- tionalists argue that the economic performance of government institutions is one of the strongest determinants of citizens’ trust (Mishler & Rose, 2001, 2005). Citizens trust government to the extent that its institutions produced desired economic outcomes and meet their expectations in the economic domain (Luhiste, 2006). Government’s inability to deal with economic challenges

R. Nunkoo, S.L.J. Smith / Tourism Management 36 (2013) 120e132124

such as unemployment and poverty impinge on citizens’ trust. Nunkoo et al. (2012) reported that residents’ perceptions of the economic performance of tourism institutions positively influenced political trust. Such a relationship has been validated by several studies in political science (e.g. Mishler & Rose, 2001, 2005; Wang, 2005; Wong, Wan, & Hsiao, 2011). Based on this discussion, the following hypothesis is developed:

Hypothesis 9 (H9)e There is a direct positive relationship between residents’ perceptions of the economic performance of government actors and their trust in those actors.

3.2. Political performance of government actors in tourism

The political performance of government actors covers issues such as extent of corruption among public officials, fair treatment of citizens and protection of their rights in development, and a democratic form of governance (Wong et al., 2011). These dimensions of development are crucial for sustainable and good governance of tourism. Although political economy suggests that government intervenes in tourism to protect societal interests, government is often criticised for being politically unfair to communities because of its undue influence on the tourism policy process (Bramwell, 2011; Ruhanen, 2013), for imposing tourism planning on and marginalising local communities (Moscardo, 2011), and for having hidden agendas (Nyaupane & Timothy, 2010). These factors results in citizens’ poor evaluation of the political performance of government and impinge on their trust (Freitag & Buhlmann, 2009). Nunkoo et al.’s (2012) recent study demonstrated that residents who evaluated the political perfor- mance of government actors in tourism more positively were mo

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