The Synergies Between Tourism Expansion And Development An Analysis Of Economic Growth, Poverty And Human Development In Ecuador

This dissertation attempts to answer the question of what has been the effect of tourism expansion and development in Ecuador. We attempt to analyze, both theoretically and empirically, the relationship between tourism and development. There have been an enormous number of studies explaining how tourism can affect the various dimensions of development. However, no research has been undertaken to simultaneously empirically examine the impact that changes in tourism expansion has on poverty, human development, and economic growth. To this end, we propose a cointergation methodology with an error correction model to estimate the impact of tourism expansion on poverty, human development, and economic growth. This study employs time series data from 1988 to 2008 as well as a Granger causality test to examine the hypothesized relationships. The five most important results are, first, that tourism seems to have distinguishable effects on reducing poverty. In the case of Ecuador, a tourism poverty nexus exists and it helps fight poverty in terms of intensity, inequality, and the proportion of poor. Secondly, economic growth is Ecuador is pro-poor . Increases in economic growth have both short and long term effects on poverty reduction. Thirdly, tourism does not yet promotes human development but the other way around. Therefore a virtuous cycle between tourism and human development does not exist yet. Therefore, opportunities exist to further promote tourism in an attempt to support human development programs. Fourthly, economic growth promotes human development but human development does not yet promotes growth. These results suggest that Ecuador is in HD lopsided situation when it comes to economic growth and human development. Finally, the relationship between tourism and economic growth is bi-directional; the expansion of either sector promotes the growth of the other