This study will focus on tourism economic growth and its development impacts on a microstate and will explore their implications for tourism analysis and planning. The evidence presented in this article reveals that tourism in Aruba can generate desirable and widely distributed impacts. The tourist performance also has been remarkable and consistent. The results also suggest that the export-led growth strategy has affected the whole of the economy in a positive way. The principal conclusion is that institutional intervention can only become a positive force within a context of rapid integration with the global market. Copyright © 2003 John Wiley & Sons, Ltd.