Tourism Immiserization: Fact or Fiction?

34 Pages Posted: 16 Dec 2005

See all articles by Nishaal Gooroochurn

Nishaal Gooroochurn

University of Nottingham

Adam Blake

Bournemouth University; CREDIT

Date Written: November 2005

Abstract

Tourism plays a major part in the development strategies of both developing and developed countries because of the alleged potential of generating foreign exchange, economic growth and welfare enhancement (Sinclair and Stabler, 1997; Sinclair, 1988). Consequently, in several countries a considerable amount of resources is allocated to further promote the tourism sector in a hope of reaping more economic benefits. However, it is still debatable whether tourism is beneficial for the tourist-receiving country or not. While empirical studies (Adams and Parmenter, 1994; Zhou et al., 1996, Baaijens et al., 1998; Blake, 2000; Blake et. al., 2003; Dwyer et al., 2003), argue that tourism expansion is beneficial to the economy, theoretical studies (Copeland, 1991; Chen and Devereux, 1999; Hazari and Nowak, 2003; Hazari et al., 2003; Nowak et al., 2003) posit that tourism expansion can be immiserizing. This paper critically reviews the theoretical and empirical literature to identify the sources via which tourism expansion can benefit or harm the economy. The issues are then empirically investigated using a CGE model for Mauritius to identify the conditions under which tourism expansion can be immiserizing.

Keywords: Tourism, Immiserization, Welfare, Economic growth

JEL Classification: L83, Q26

Suggested Citation

Gooroochurn, Nishaal and Blake, Adam, Tourism Immiserization: Fact or Fiction? (November 2005). FEEM Working Paper No. 143.05, Available at SSRN: https://ssrn.com/abstract=856006 or http://dx.doi.org/10.2139/ssrn.856006

Nishaal Gooroochurn (Contact Author)

University of Nottingham ( email )

University Park
Nottingham, NG8 1BB
United Kingdom

Adam Blake

Bournemouth University ( email )

Fern Barrow
Poole BH12 5BB, Dorset BH8 8EB
United Kingdom

CREDIT

School of Economics
Nottingham, NG7 2RD
United Kingdom

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