Revenue Sharing in Community–Private Sector Lodges in Namibia: A Bargaining Model

• Published in: Tourism economics : the business and finance of tourism and recreation Vol. 15; no. 3; pp. 653 - 669
• Main Author: Lapeyre, Renaud
• Format: Journal Article
• Language: English
• Published: London, England SAGE Publications 01-09-2009; Sage Publications Ltd
• Subjects: Bargaining; Community; Cooperation; Economic models; Game theory; Income distribution; Leisure industry; Local communities; Modelling; Namibia; Nash equilibrium; Private sector; Revenue sharing; Rural areas; Studies; Tourism; Namibia; rural tourism; community–private sector partnerships; property rights; common-pool resources; Nash bargaining solution; Namibia
• ISSN: 1354-8166; 2044-0375
• DOI: 10.5367/000000009789036585

Taking tourism in Namibian rural areas as an empirical case study, this paper analyses the main factors that explain the economic outcome in a negotiation process in which local communities and private operators bargain over the distribution of income generated through a partnership lodge. While much research has focused on the required preconditions (especially property rights) and efficiency effects of tourism partnerships, a Nash bargaining model allows us to assess the distributive effects of such contracts. In particular, variables such as insecure community land tenure, and the resulting reduced value of land, the remoteness of lodges and the community's impatience and attitude towards risk could explain why rural communities have not so far captured the lion's share from tourism activities in communal lands. Finally, the paper shows that future research will be needed to complete the model in order to provide an account of the contractual problems that limit the efficiency of tourism partnerships in rural areas – transaction costs and underinvestment.