Tourism and Development: A Recent Phenomenon Built on Old (Institutional) Roots?
AbstractIs tourism an opportunity for lagging countries in the elusive quest for growth (Easterly, 2002)? Recent empirical evidence suggests that the answer is a cautious yes. Aggregate cross-country data show that tourism specialization is likely to be associated with higher per capita GDP growth rates than those observed in industrialized countries. However, this evidence ignores the importance of institutional quality and results are likely to be biased by omitted variable problems. In this paper we frame our starting question within the general debate about the importance of good/bad institutions as fundamental determinants of economic growth (Acemoglu et al., 2001) and ask whether previous positive results of tourism on growth are in fact driven by the presence of growth enhancing institutions. Our empirical analysis exploits newly available datasets and controls the robustness of previous results on growth and tourism in the presence of several institutional quality variables. By means of descriptive statistics and some simple cross-country regressions we confirm that the quality of institutions is important for growth. Yet our results strongly suggest that the weight of tourism in an economy is an independent and robust predictor of higher-than-average growth.
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Bibliographic InfoPaper provided by Fondazione Eni Enrico Mattei in its series Working Papers with number 2010.16.
Date of creation: Feb 2010
Date of revision:
Economic Development; Tourism Specialization; Institutions;
Other versions of this item:
- Rinaldo Brau & Adriana Di Liberto & Francesco Pigliaru, 2011. "Tourism and Development: A Recent Phenomenon Built on Old (Institutional) Roots?," The World Economy, Wiley Blackwell, vol. 34(3), pages 444-472, 03.
- Francesco Pigliaru & Adriana Di Liberto & Rinaldo Brau, 2011. "Tourism and Development: A recent phenomenon built on old (institutional) roots?," ERSA conference papers ersa10p990, European Regional Science Association.
- O11 - Economic Development, Technological Change, and Growth - - Economic Development - - - Macroeconomic Analyses of Economic Development
- O50 - Economic Development, Technological Change, and Growth - - Economywide Country Studies - - - General
- O47 - Economic Development, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Measurement of Economic Growth; Aggregate Productivity; Cross-Country Output Convergence
- F43 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - Economic Growth of Open Economies
- L83 - Industrial Organization - - Industry Studies: Services - - - Sports; Gambling; Restaurants; Recreation; Tourism
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