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Political Economy and Tourism development Group 4

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    Political Economy

    The area of social science that emphasize the influence of power and politics regarding the distribution of resources. According to Scheyvens (2002:2) “Political economy is a branch of social sciences that examines the relationship between political and economic institutions and processes”. The term “Political Economy” derives from the Greek “polis”, meaning “city” or “state” and “oikonomos” means “one who manages a household or estate”. Thus, political economy is the study of how a country is managed and governed, emphasizing the political and economic factors (

    The relationship between politics and economics is important for understanding the role of tourism in development of economic theories and also the power structure between and within the countries.

    Development is often used to describe changes or progresses of a human individual (Darwin, cited in Holden, 2005). But development can also be talked about in social and industrial contexts.  For example, earlier liberals and philanthropists have found out that society itself passes through “stages” of development before reaching an idealistic state. After the Second World War the association between the economic progress, the development of society and the politics became more visible. During this time, leaders of countries of the world reached together to find a solution to control the global economy after the war (and thereby avoid another great depression). This resulted in establishing institutions to control the global economy.

    In the later 1940’s, President Truman of the United States held a speech where he separated the “developed” and the “underdeveloped” worlds (also the “first” and “third” worlds) based on the national income and political orientation. Therefore, these terms came to mean that the “first” world countries were the capitalistic ones in North America, Western Europe and Australasia, and the “third” world countries were countries where the economy was still developing and those with non-aligned politics, such as the continents of Asia, Africa and Latin America.  His speech lead to the defining of development as an economic measurement only focused on economic progress and not wealth in forms of, for example, freedom and democracy, despite the fact that the reason for underdevelopment can be because of the power relationships in a society. Nonetheless, this all resulted in the study of development, and thereby also the different theories of it.

    One theory that is emphasized on studying the social science of political economy is the “Theory of Hegemony”. Hegemony comes from the Greek word that was used in ancient times that refer to the dominance of one ruler or state over another. in the view of the Italian sociologist Gramsci it is seen  as the dominance of social class, where the dominant imposes their own world-view and ideology to the society (Holden, 2005).




    Dependency theory explains the power relationship between nation and states and within the different groups of society that exist. This theory emphasizes, in political and economic terms, how distribution of resources is influenced by different factors. According to Bianchi , dependency theorists argue that developing countries have external and internal political, economic and institutional structures that controls the underdeveloped countries to be in a dependent position (cited in Holden, 2005:112). Dependency theorists called this underdevelopment, which is based on the interaction of economic and social structures within an international system. In the extreme form, dependency theory is based on a Marxist view of the world, which can be referred to as ‘world systems theory’ and ‘underdevelopment theory’. These theories give importance in analyzing the exploitative nature of the powerful countries within their relationship in the exchange system, such as US and many western countries and their dependent countries such as Latin America and many parts in Asia (cited in Holden, 2005:112).

    Andre Gunder Frank  is the major influence of this ideology and viewed development and underdevelopment as part of the same world capitalist system. He clarifies that developed western countries are the reasons why developing countries remain dependent to the industrialized nations. This relationship of dependency and exploitation can be traced back to the seventeenth century where European power countries colonized Africa, Asia and Latin America continents and made them a part of imperial system. The colonized countries, which are commonly producing primary products, serve as a supplier of cheap raw materials in exchange for manufactured goods to the mother country. Through this model emerged ‘world system’ of dependency and underdevelopment, in which western nations exploited the peripheral ones (Frank 1967, cited in Holden, 2005).


    Modernization theory

    Dependency theory are being criticized by non-Marxists different perspectives. Thus, emerged the “theory of modernization” which emphasizes on explaining the process of a nations transition from a traditional society to a modern one. Its development started between 1950’s to 1960’s, and views socio-economic development as an evolutionary and linear path from a traditional society to a modern society (Holden, 2005). According to Walt Rostow , in his work on ‘Stages of Economic Growth – A Non-Communist Manifesto’, the financial aid for development should exceed the purely economic to include the political, such as supporting the non-communists’ elites, pluralism and democracy. Rostow’s work is highly influenced by the analogy of functionalism, an ideology that believes that societies mature through various stages of evolution driven by internal factors. Thus emerged Rostow’s modernization model, where he suggested that economic development occur when tradition and superstition barriers are broken and traditional social structures and values are changed (Harrison, 1992).

    His model shows that economic growth occurs in five stages:

    1. Traditional Society (agricultural societies) 2. Preconditions for take-off (political elites’ ideas that favors economic progress) 3. Take-off (agricultural to industrialization) 4. Drive to maturity (national income is invested to industry and technology) 5. Age of Mass Consumption (the economy matures with high standard of living and a wealthy state)

    Rostow believe that if such change is applied, then a society will be developed, regarding their knowledge in investment capital, entrepreneurial skills and technology. Rostow further suggested that if such change is blocked by the nature of tradition, then a society could be diffused from outside (Holden, 2005).



    "Liberalism" refers to "freeing up" the economy by extracting the barriers and restrictions to what actors can do, while "neo" refers to a new kind of liberalism. Neoliberalism can be describe as making trade movement between nations very simple, although, it is about the free movement of  goods, resources and enterprise in the an offer to find cheap resources, to make the most profit and efficiency. These type of concept was first introduced by a Scottish economist named Adam Smith in his book which was published in the year 1776 “THE WEALTH OF NATIONS”. It is clear that Neoliberalism does not have a real definition, but it has been attributed to policies of Thatcher Margaret and Reagan Ronald. An approach of neoliberalism regarding the economics and social studies that controls the economic aspect which has been shifted from the public sector to private sector (


    Economic Neoliberalism

    Economic neoliberalism is define as globalisation because it is focus on trade and limited state involvement in the global economy. It is clear that tourism in the free market economy shows commercialization of human need to travel and exploit the natural and cultural resources. According to Brohman many countries pay attention to the product of primary product for export markets has led to a shift in development strategy away from an inward perspective towards an outward orientation and this actually includes the expansion, such as the international tourism. In addition, tourism role as an export industry and as a mean of earning foreign exchange is very supported by the multinational as they continue to attempt to secure new markets for their product (Scheyvens, 2002). During the 1980s and 1990s it was to have impeded access to resources  which did include the natural, cultural and human ones. Moreover it says that some developing countries have also wanted to increase tourism as a consequence of falling. World Bank and International Monetary Fund (IMF) supports the neo-liberals development strategies through restructuring the political policies regarding the economic activity of a destination (Holden, 2005).


    Alternative and sustainable development

    The alternative development paradigm is a pragmatic approach which arose out of criticisms of the modernization and neo-liberal theories. The alternative paradigm is centred on people and their natural environment placing emphasis on democracy and planning from bottom up rather than the top bottom. This resulted in methods of assessing development that extended beyond simple economic development taking into consideration that the quality of life is not based only on economic variables (Holden, 2005).

    The alternative paradigm places importance on conservation of natural resources and  ecosystems, however  this view has being repeated by the World Tourism Organisation. According to World Tourism Organization “A sustainable approach to tourism means that neither the natural environment nor the socio-cultural fabric of the host communities will be impaired by the arrival of tourists”.  However the natural environment and the local communities should benefit from tourism, both economically and culturally. Sustainability implies that tourism resources and attractions should be utilised in such a way that it will be available to the future generation (UNESCO,2010).

    The central idea of term “sustainable development” is the linkage of human development with the conservation of nature.  However the term had reflected the ambiguity of the concept, so therefore, giving various organisations including governments, NGOs, private sectors etc, the lye way to use term in their objectives.  Nevertheless the Brundtland report to the World Commission of Environment and development on the state of the earth’s environment gave a definition of the term “sustainable development”, it stated “sustainable development is not a fixed state of harmony but rather a process of change in which changes are made consistently with the future as well as the present needs”. (Holden 2005:118)


    Application of sustainability in tourism

    The idea of sustainability has being applied in various forms of tourism at national, local, private or public sectors. However tourism has taken many initiatives to develop a more sustainable form of tourism. A prime example of such initiative was when the NGOs, Government, the tourism industry, academics came together to discuss the future of the tourism industry and the environment. They came up in five main goals to be considered when developing sustainable development (Holden,2005).

    The five main goals of sustainable tourism (Fennell,1999):

    1.      to develop greater awareness and understanding of the significant contributions that tourism can make to the environment and economy

    2.      to promote equity and development

    3.      to improve the quality of life of host communities

    4.      to provide a high quality of experience for the visitors and to maintain the Quality of the environment on which the forgoing objectives depend.





    Claudia, Heissy, Henrietta, Tina




    A Primer on Neoliberalism. (n.d.). Retrieved October 29, 2015,

    CorpWatch : What is Neoliberalism? (n.d.). Retrieved October 29, 2015,

    Fennell,D (1999) Ecotourism: An Introduction, Routledge, London

    Frank, A. (1967). Capitalism and underdevelopment in Latin America; historical studies of Chile and Brazil. New York: Monthly Review Press

    Holden, A. (2005). Tourism studies and the social sciences. London: Routledge

    Harrison D. (1992) Tourism and the Less Developed Countries

     Fien, J., Calder, M., & White, C. (2010). Retrieved October 30, 2015,

    Scheyvens, R. (2002). Tourism for development: Empowering communites. Harlow, England: Prentice Hall.

     Elizabeth M. & Arnoldo G. (1996). National Network for Immigrant and Refugee Rights. Retrieved Nov. 11, 2015,;



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