Local Communities as an Agent for Sustainable Tourism: The Implementation of Tourism Development at Northern of Bali Sujana Budhiasa 1 , Eka N. Kencana 2 , Trisna Darmayanti 3 1 Department of Economics and Development Studies, Udayana University, Kampus Sudirman, Denpasar 80113, Indonesia E-mail: dukutsbudhi@unud.ac.id 2 Department of Mathematics, Udayana University, Kampus Jimbaran, Badung 80211, Indonesia E-mail: i.putu.enk@unud.ac.id 3 Department of Food and Science Technology, Udayana University, Kampus Jimbaran, Badung 80211, Indonesia E-mail: trisnadarmayanti@unud.ac.id Abstract— Sustainable tourism development is intensively announce as an important way to reduce poverty by increasing the positive economic impacts for local people as well as reducing the environmental degradation and disturbances of socio-cultural dimensions. This work studied the effect of local government policies and local community participation on quality of destination and life’s quality of local people at northern of Bali areas. A hundred of community leaders at Buleleng regency of Bali were chosen as the respondents in this work. By applying variance-based structural equation modeling, we found government policies significantly affects community participation on tourism development at northern of Bali. In addition, local community participation in turns positively affects the quality of destination. Furthermore, we confirmed quality of destination has significant effect on people’s quality of life with people emotional well-being is the most reflection and material well-being is the least reflection of it. Keywords— Bali; community participation; quality of life; SEM; tourism destination. I. INTRODUCTION Tourism industries and their related sectors have been rising to become top agenda in many developing countries. Various research’s findings proved tourism increase people income as well as providing job and business opportunities. In brief, tourism is believed and argued has capabilities to increase the quality of economic dimension of the society. However, on the other side, there is no doubt some negative impacts especially in socio-cultural and environmental aspects arise. For instance, excessive use of natural resources such as water and energy supplies for tourism industries will endanger its availability for local society and environmental sustainability. Generally speaking, as a multi sector industry, tourism will affects the quality of human life as a means of the economic, socio-cultural, and the environmental changes [1] [2] [3]. The raising concerns for conducting tourism in more sustainable ways increase dramatically in the recent years, especially in Bali as a central tourism of Indonesia. Many efforts has been promoted by Bali’s government to increase the economic benefit for local people as well as to preserve the environment and protect Balinese socio-cultural aspects. For instance, Bali Goes Green campaign is an example of Bali’s government to promote eco-friendly development in Bali. In addition, a lot of cultural-related festives has been conducted at various regencies in Bali to preserve and promote local culture in relation to tourists’ activities. According to Claiborne [4], tourism has become a major agent for socio-cultural and environmental changes in every destination it has touched. Of course these changes have their own prices that have to be paid by the community. Unfortunately, many communities particularly in developing world, unaware of the burden of costs arising from tourism activities. In these circumtances, communities participation is an alleged solution. In spite of much efforts and resources has been allocated by local government of Bali to promote sustainable tourism development (STD), program outcomes were not successful as expected. Mowforth & Munt [1] argued the lack of the understanding about community’ social structure is the main