Boosting tourism's contribution to growth and development: Analysis of the evidence
Corresponding Author
Onil Banerjee
Inter-American Development Bank, Washington, D.C
Correspondence
Onil Banerjee, Inter-American Development Bank, Environment, Rural Development, Environment and Disaster Risk Management Division, 1300 New York Avenue N.W., Washington, D.C., 20577.
Email: [email protected]
Search for more papers by this authorMartín Cicowiez
Universidad Nacional de la Plata, La Plata, Argentina
Search for more papers by this authorEmily J. Morris
University College London, London, United Kingdom
Search for more papers by this authorCorresponding Author
Onil Banerjee
Inter-American Development Bank, Washington, D.C
Correspondence
Onil Banerjee, Inter-American Development Bank, Environment, Rural Development, Environment and Disaster Risk Management Division, 1300 New York Avenue N.W., Washington, D.C., 20577.
Email: [email protected]
Search for more papers by this authorMartín Cicowiez
Universidad Nacional de la Plata, La Plata, Argentina
Search for more papers by this authorEmily J. Morris
University College London, London, United Kingdom
Search for more papers by this authorAbstract
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.
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