EXACTING RESORT DEVELOPERS TO CREATE NON-TOURISM JOBS

This paper describes and evaluates an innovative economic diversificat ion policy implemented in 1990 by the state of Hawaii. The policy requ ires hotel developers to create one non-tourism job in the economy in order to obtain state government permission to build one hotel room in resort developments that require land to be reclassified from agricul tural, rural, or conservation uses to urban use. Alternatively, the de veloper may make a front-end cash payment of $25,000 per proposed hote l room to finance job training, business loan, and other incentive pro grams to facilitate economic diversification. The purpose of the polic y is to extract economic rents from resort developers to finance non-t ourism related development.