POLITICAL-ECONOMY OF PROTECTING UNIQUE RECREATIONAL RESOURCES - HANAUMA BAY, HAWAII

The impact of tourism growth on the environment, has become an increas ingly important public issue in travel destinations. We review Honolul u's recent experience in designing management strategies to protect on e of its most popular, unique and endangered natural recreational reso urces, Hanauma Bay Nature Park. We explain why Honolulu City Council m embers first adopted nonprice rationing techniques to reduce visits in the park and later added an admission fee only to replace it with a l ower and less efficiency-enhancing fee structure. Lawmakers desire (i) a quality environment, (ii) to collect economic rents (i.e., achieve economic efficiency) for the benefit of the general public, and yet mu st (iii) achieve a political equilibrium. ks Honolulu's experience dem onstrates, goals (i) and (ii) often conflict with (iii), yielding typi cally a second-best outcome. Efficiency can be attained only if it is also consistent with attaining political equilibrium.