This thesis examines the effectiveness of tourism as an agent of rural development, focusing on culture and nature-based destinations in the 'developing world'. The village of Desa Senaru at Gunung Rinjani National Park in Lombok Island, Indonesia, served as a case study. Conservation agencies frequently support tourism development as a sustainable alternative to more extractive resource uses. Integrated conservation models, in particular, present 'eco'tourism as an effective instrument to enhance rural livelihoods while protecting the environment. Alongside international aid agencies, the World Tourism Organisation (UNWTO) also promotes the sector for its poverty reduction potential in 'third world' countries. Rural communities hold concomitant expectations of tourism's socio-cultural development potential. Furthermore, 'eco'tourism functions as a growing niche market for the globally expanding tourism industry and local entrepreneurs. As such it fits well into the economic rationale that underpins neo-liberal market strategies. With such a diversity of interests at stake, the question "What kind of business is tourism?" has become more complex, critical and pertinent than ever before. Informed by development theories and the sociology of tourism, this analysis focuses on the multiple dichotomies that characterise 'third world' tourism. In the case of tourism development in Desa Senaru, several paradoxical outcomes have been identified. The most profound of these is the 'social justice paradox' that describes the way tourism costs and benefits are distributed within a heterogeneous community of native residents and migrant settlers. While most of the case study's tourism attractions are part of the cultural heritage of the wetu telu Sasak hamlets, these derive few economic benefits and struggle to access the new development opportunities 'eco'tourism offers. Filtered and directed by historical political relations, several key barriers to a meaningful participation of these native people in the 'business of tourism' have been identified. These include the prevailing conditions of education, culture, ethnicity, socio-economy, location, mobility, skills and knowledge. Expectations of 'eco'tourism as a 'soft' industry analysed vis-à-vis the global biosphere effects of air transport highlight the 'eco-paradox' of international tourism. The cleavage between the poverty-focused aid policies of the New Zealand Government and an integrated conservation project, whose benefits local elites have largely captured, illustrates the 'project paradox' of rural tourism development programmes. In the 'development paradox' of cultural tourism, symbolic constructs of 'otherness' (such as 'aesthetic poverty') contrast with various development agendas; in their search for the 'real' traditional village, for example, the tourists reject all signifiers of material progress and modernity. Their curious gaze at the spiritual practices and everyday life world of the wetu telu villagers manifests opposite a recent history of state-sanctioned religious discrimination. Taken together, these paradoxical local outcomes emphasize the significance of power relations and political dimensions within the globally expanding 'business of tourism'. Ethical considerations are an important aspect of this study as they contribute towards an 'ethic of development' that, so far, has found little theoretical resonance amongst scholars of tourism studies. To operationalise the ethical concerns raised, the thesis posits a model of a holistic approach to development. This recognises tourism as a complex open system.