Document Type

Dissertation

Degree

Doctor of Philosophy

Major

Political Science

Date of Defense

12-13-2011

Graduate Advisor

Kenneth P. Thomas, Ph.D.

Committee

Maric, Nevena

Silva, Eduardo

Hellinger, Daniel

Abstract

Prevailing theories have failed to take into account the development of policy and institutions in microstates that are engineered to attract investments in areas of comparative advantage as these small islands confront the challenges of globalization and instead have emphasized migration, remittances and foreign aid (MIRAB) as an explanation for the survival of microstates in the global economy. This dissertation challenges the MIRAB model as an adequate explanation of investment strategy in microstates and argues that comparative advantage is a better theory to explain policy behavior of microstates. These small economies can take advantage of their exotic locations and natural endowments of sun and sand to develop a robust tourism sector through prudent investments and incentives in collaboration with stakeholders in the industry. This case study on the Fiji Islands will demonstrate that microstates are capable of developing policy instruments that encourage investments, even during periods of deep political crisis, thus underscoring a maturation of institutions in small post-colonial societies. The development of the tourism industry in Fiji was neither an ad hoc exercise nor an instance of creation ex nihilo, as both government and the private sector recognized over time the economic potential of tourism as a conduit for national development. The state collaborated in this endeavor by building institutions and supporting investments in hopes of capitalizing on the positive spillovers that could occur from a robust tourist industry. This dissertation argues that investments undertaken by the Fiji Islands in the tourism sector was a rational strategy to fully exploit its comparative advantage through the development of sophisticated institutional and organizational structures that emerged to meet the challenges of a complex global industry.

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