Institutional economics literature suggests that inclusive institutions encourage economic growth by increasing efficiency in many sectors of the economy. Institutional structure also has effects on the tourism sector due to the confidential environment and incentives it brings. In this context, when studies on determinants of tourism are examined, it is remarkable that there are a number of studies on economic and social factors, but that there are limited studies about institutional determinants of tourism. This study investigates the causal relationships between institutional factors and tourism sector in nine Mediterranean coastal countries also including Turkey for the period of 1995-2015 by using Konya (2006) panel causality analysis. The results of the study using variables of corruption and democratic accountability as indicative of institutional structure reveal causal relations between tourism expenditures and institutional factors.