Exploring Local Government Behaviors Towards the Sustainable Development of Tourism Real Estate in Hainan Island: A Public Choice Theory Perspective

Local governments in Hainan Island, China, frequently make tourism real-estate decisions that conflict with broader sustainable tourism development goals. The purpose of this study is to apply public choice theory to: (i) identify the drivers of local government decision-making with respect to the development of tourism real estate, and (ii) explore the apparent misalignment between their real-estate development decisions and broader sustainable tourism objectives. Through thematic analysis of in-depth interviews with twelve real-estate developers and three provincial officials, two primary drivers were identified. First, national policies present a duality by encouraging real-estate expansion alongside strict but weakly enforced regulations. Second, local governments' reliance on land sales, GDP-based performance evaluations, and political cycles incentivizes real-estate prioritization and rent-seeking behaviors. These findings emphasize that local governments function as rational economic actors who balance public obligations with self-interest. As a result, real-estate speculation is consistently privileged over sustainable tourism development.