This article explores arts festivals in terms of their relationship to local economic development within the rural island region of Orkney in Scotland. Fourteen qualitative, semistructured interviews were conducted with arts festival organizers, tourism representatives, and local volunteers during the summer festival season. The findings offer new insights into the factors affecting how arts festivals impact the local economy, the areas of the local economy that are affected by arts festivals, and the implications of funding from awarding bodies on the endogenous development of arts festivals. For instance, it is concluded that supporting the cultural values of locals is vital to the economic success of rural arts festivals through a strategic design in the combined integration of minimized paid staff and maximized volunteers. Furthermore, it is revealed how in certain cases the initial retention of funding may benefit start-up arts festivals in terms of strategic development of their social approval and natural progression. Through the provision of an original theoretical framework for the relationship between arts festivals and economic development in a rural island context, the article also makes substantive contributions to theoretical development and knowledge advancement in this field, while offering future research directions for rural studies researchers. Ultimately, island community practitioners such as festival directors, local authorities, and merchants could benefit from using the findings to develop enhanced strategic operations, which could generate greater synergies and sustainability for the local arts festival sector and ultimately contribute towards greater economic prosperity.
