Tourism Policies and Cross-Country Growth: A Disaggregated Analysis

Abstract

Using recent cross-country data for over a hundred nations, this paper examines the effects of various disaggregated tourism policy measures on economic growth. Based on standard growth theory, the model uniquely incorporates tourism variables disaggregated across various dimensions of tourism policy, tourism infrastructure and human resources. Both standard growth models and endogenous growth models are estimated. The authors find that, among a wide set of tourism policies, strengthened tourism safety regulations and government prioritization of the tourism industry boost economic growth, while some tourism initiatives and infrastructure investments seem to have perverse growth effects. All else being equal, economic growth is higher in transition nations.