- The Fondazione Eni Enrico Mattei series on Economics, the Environment and Sustainable Development
Edited by Alessandro Lanza, Anil Markandya and Francesco Pigliaru
Chapter 1: An investigation on the growth performance of small tourism countries
1. An investigation on the growth performance of small tourism countries1 Rinaldo Brau, Alessandro Lanza and Francesco Pigliaru 1. INTRODUCTION In a recent paper, Easterly and Kraay (2000) investigate whether or not being small represents an economic disadvantage for a country. Their ﬁnding is that smaller countries are not poorer than average, nor that they grow more slowly. Similar results are also provided by Armstrong and Read (1995) and Armstrong et al. (1998). Yet reasons for being pessimistic are not diﬃcult to ﬁnd, especially in literature on endogenous growth, where scale eﬀects often play a role in the determination of an economy’s growth rate (Grossman and Helpman, 1991; Aghion and Howitt, 1998). Likewise, countries which rely strongly on international tourism are suspected of being locked into a slow growth path. Again, endogenous growth theories tend to emphasize the virtues of high-tech sectors, whose potential for high long-run growth is regarded as more promising than that of non-high-tech service sectors such as tourism.2 In addition, countries in which tourism is the prominent sector are often very small. So expectations about their economic performance are not high, to say the least. Nevertheless, this pessimistic perspective is challenged by a growing stream of literature on small and island countries’ economic performance, where tourism is generally associated to higher than average income levels (e.g. Read, 2004 for a recent survey). In this chapter we assess the reliability of these diﬀerent views about the likely role of tourism as a growth engine...
You are not authenticated to view the full text of this chapter or article.
Elgaronline requires a subscription or purchase to access the full text of books or journals. Please login through your library system or with your personal username and password on the homepage.
Non-subscribers can freely search the site, view abstracts/ extracts and download selected front matter and introductory chapters for personal use.
Your library may not have purchased all subject areas. If you are authenticated and think you should have access to this title, please contact your librarian.