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Tourism sector in Panama : regional economic impacts and the potential to benefit the poor


  • Klytchnikova, Irina
  • Dorosh, Paul


Tourism is one of Latin America's fastest growing industries but the impact of tourism on the poor and the effects on lagging regions are under debate. Many studies have evaluated the growth impacts of the tourism sector but few have analyzed the impact of tourism on the economy and poverty at the subnational level in developing countries. As a country marked by a"dual economy,"Panama shares with other Latin American countries a fast growing, modern urban sector side by side with impoverished rural and peri-urban populations. Tourism has been growing in Panama and contributes at least 6 percent of gross domestic product. This paper presents the results of a top-down assessment of the impact of tourism spending on growth and poverty at the regional (province) level in Panama using a Social Accounting Matrix model. As revealed by this study, the tourism sector has large multiplier effects on the Panamanian economy and has the potential for significant benefits to the poor. But tourism's poverty benefits are neither automatic nor ubiquitous. They depend on where and how supply chains are structured and on the way tourists spend their money.

Suggested Citation

  • Klytchnikova, Irina & Dorosh, Paul, 2012. "Tourism sector in Panama : regional economic impacts and the potential to benefit the poor," Policy Research Working Paper Series 6183, The World Bank.
  • Handle: RePEc:wbk:wbrwps:6183

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    References listed on IDEAS

    1. Paola De Agostini & Stefania Lovo & Francesco Pecci & Federico Perali & Michele Baggio, 2006. "Simulating the Impact on the Local Economy of Alternative Management Scenarios for Natural Areas," Chapters,in: Integrated Assessment and Management of Public Resources, chapter 6 Edward Elgar Publishing.
    2. Bichaka Fayissa & Christian Nsiah & Badassa Tadasse, 2009. "Tourism and Economic Growth in Latin American Countries(LAC): Further Empirical Evidence," Working Papers 200902, Middle Tennessee State University, Department of Economics and Finance.
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    Cited by:

    1. Grégoire Garsous & David Corderi & Mercedes Velasco, 2015. "Tax Incentives and Job Creation in the Tourism Industry of Brazil," IDB Publications (Working Papers) 91996, Inter-American Development Bank.
    2. repec:eee:touman:v:51:y:2015:i:c:p:157-173 is not listed on IDEAS
    3. Grégoire Garsous & David Corderi & Mercedes Velasco, 2015. "Tax Incentives and Job Creation in the Tourism Industry of Brazil," IDB Publications (Working Papers) 7324, Inter-American Development Bank.
    4. repec:eee:touman:v:50:y:2015:i:c:p:257-267 is not listed on IDEAS
    5. Banerjee, Onil & Cicowiez, Martin & Gachot, Sébastien, 2015. "A quantitative framework for assessing public investment in tourism – An application to Haiti," Tourism Management, Elsevier, vol. 51(C), pages 157-173.

    More about this item


    Cultural Policy; Cultural Heritage&Preservation; Tourism and Ecotourism; Transport Economics Policy&Planning; Accommodation&Tourism Industry;

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