The resolution of conflict between ecotourism and community interests in China: basis on the Pigovian tax design

Abstract

The achievement of ecotourism as a special tourism service style depends on reasonable institution design. Taking ecotourism development in China as an example, this paper studies the design of Pigovian taxes as a way to balance the interests of ecotourism development and community welfare. The paper then looks at feasible ways and restriction conditions, and explains from an economics standpoint the reliant institutional arrangement of ecotourism design. Aiming at the problem of information asymmetry in application of Pigovian taxes, the paper puts forward the argument that the balance of ecotourism development and community interests can be achieved though government measures: commissioning the developers, agreeing contractually to publicise exterior costs of the development and asking the developers to accept strict supervision.