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Boosting tourism's contribution to growth and development: Analysis of the evidence

Author

Listed:
  • Onil Banerjee
  • Martín Cicowiez
  • Emily J. Morris
  • Adela Moreda

Abstract

The tourism sector's contribution to economic development depends upon complex and dynamic socioeconomic, environmental, and institutional factors. Policymakers require objective evidence to base decisions on which public policies or investments to pursue. In this paper we develop an economy‐wide approach to assessing public investments in tourism. The approach is powerful in that it considers all inter‐sectoral linkages that are critical for tourism‐sector analysis. This framework is linked to a microsimulation module that enables estimation of household‐level and destination‐specific impacts and the distribution of benefits. To illustrate the framework and the insights it can generate, we apply it to a public investment in Belize's Cayo District. Our findings show that the overall level of economic activity increases while an appreciation of the real regional exchange rate results in slower growth in traditional nontourism exports. Greater availability of capital and labor to meet increased demand would reduce this effect. The investment results in a reduction in the poverty headcount on the order of 0.7 percentage points, though there is a small increase in inequality that is a function of the skill requirements of the new positions created as a result of the investment.

Suggested Citation

  • Onil Banerjee & Martín Cicowiez & Emily J. Morris & Adela Moreda, 2018. "Boosting tourism's contribution to growth and development: Analysis of the evidence," Review of Development Economics, Wiley Blackwell, vol. 22(3), pages 1296-1320, August.
    • Handle: RePEc:bla:rdevec:v:22:y:2018:i:3:p:1296-1320
    DOI: 10.1111/rode.12385
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    Cited by:

    1. Vito Tanzi, 2005. "Building regional infrastructure in Latin America," INTAL Working Papers 2642, Inter-American Development Bank, INTAL.
    2. Juan S. Blyde, 2006. "Assessing the impacts of intellectual property rights on trade flows in Latin America," INTAL Working Papers 1274, Inter-American Development Bank, INTAL.
    3. Elsnit, 2005. "Second Annual Conference of the Euro-Latin Study Network on Integration and Trade, ELSNIT : Issues papers," INTAL Working Papers 2414, Inter-American Development Bank, INTAL.
    4. Eric T. Miller, 2005. "Achievements and challenges of trade capacity building : a practitioner's analysis of the CAFTA process and its lessons for the multilateral system," INTAL Working Papers 1268, Inter-American Development Bank, INTAL.
    5. Anneke Jessen & Christopher Vignoles, 2005. "Jamaica: trade, integration and the quest for growth," INTAL Working Papers 1264, Inter-American Development Bank, INTAL.
    6. Mario Jales & Marcos Sawaya Jank & Shunli Yao & Colin Carter, 2006. "Agriculture in Brazil and China : challenges and opportunities," INTAL Working Papers 1296, Inter-American Development Bank, INTAL.
    7. Marcelo de Paiva Abreu, 2005. "The FTAA and the political economy of protection in Brazil and the US," Textos para discussão 494, Department of Economics PUC-Rio (Brazil).
    8. Vito Tanzi, 2005. "The production and financing of regional public goods," INTAL Working Papers 2824, Inter-American Development Bank, INTAL.

    More about this item

    JEL classification:

    • C68 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - Computable General Equilibrium Models
    • Z3 - Other Special Topics - - Tourism Economics
    • E2 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment
    • D61 - Microeconomics - - Welfare Economics - - - Allocative Efficiency; Cost-Benefit Analysis
    • O1 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development
    • D31 - Microeconomics - - Distribution - - - Personal Income and Wealth Distribution

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