development theory in tourism

Tourism, Development, and Growth

• First Online: 01 January 2012

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• Guido Candela 3 &
• Paolo Figini 3  

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The evidence that in many countries tourism constitutes a fundamental engine of local and national development is unquestionable, and in recent years gave birth to a flourishing scientific production. These aspects can be studied using standard tools of macroeconomic theory, such as the income multiplier, models of exogenous and endogenous growth, and models of regional development applied to the tourism case.

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Between two variables X and Y there exists a multiplicative relationship if they are linked by a proportional or transposed proportional function such as Y  =  mX  +  n , with n  ≥ 0, so that d Y /d X  =  m . Applications of the multiplier model are the employment multiplier (Kahn 1931 ), linking the overall increase in employment to the employment generated by an additional investment, and the income multiplier (Keynes 1936 ), linking the overall increase in national income to a new investment. Such models are so fundamental that they are discussed in any macroeconomics textbook, which we refer to for a general introduction.

For example, because the tourist sustained these costs before leaving the home country, or because the domestic firm directly imported goods to satisfy the tourist’s demand; the first case could be that of a French tourist that brings Perrier mineral water from France to Italy, the second case could be that of an Italian hotel that does not serve Italian mineral water but rather prefers to serve Perrier to their guests.

It is important to recall that the tourism destination being referred to can be the entire country (in this case, the autonomous component of domestic tourism G 1 does not exist), but also an internal area of any dimension, from a town to a broader region.

In this framework we assume, for the sake of simplicity, that income can be affected by changes in tourism expenditure only. If it were not so, the investment function would be more complicated, having to capture both the impact of tourism and of other components of expenditure on income, but without significant changes in the main results of the model.

This assumption is more realistic than it might seem at first glance: it means, in fact, concentrating on the real aspects of the economy, the quantity produced, while abstracting from the monetary aspects, the prices. This abstraction from the monetary aspects is typical of all contemporary growth theory and implies that all the complications caused by inflation are not taken into account since monetary variables, according to the standard theory, do not have permanent effect on the economy.

In the analysis of Sect.  13.2 the effect (b) was not considered, thus only focusing on the role of investment in the short run, as a component of aggregate demand.

However, one could consider sociological reasons for which the contact between tourists and the local population could modify the demographic pattern in the destination, in terms of birth, mortality, and migration. In the same way, it might be that the arrival of tourists and of multinational tour operators could drive a change in the production technology and, consequently, in the rate of technological progress.

Although in other parts of the book (see Sect. 7.6 and Chap. 12 ) we argue that also tourism can be a technological-intensive activity.

The implicit assumption of this model is that the resource cannot be regenerated. To be more precise, one should distinguish between renewable and not renewable resources. However, this would not qualitatively change the result ( 13.52 ): the long-run path of economic growth would be unsustainable if the rate of exploitation of the (renewable) resource is greater than its natural rate of regeneration (see Sect. 16.3 ).

On industrial districts and systemic areas, see the scientific publications of Becattini and in particular Becattini ( 1987 , 2000 , 2004 ); see also Bagella and Becchetti ( 2000 ).

For an in-depth analysis of the economic issues concerning districts and local tourism systems, see Candela and Figini ( 2005 ), Chap. 11 , and Candela et al. ( 2008 b).

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Candela, G., Figini, P. (2012). Tourism, Development, and Growth. In: The Economics of Tourism Destinations. Springer Texts in Business and Economics. Springer, Berlin, Heidelberg. https://doi.org/10.1007/978-3-642-20874-4_13

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2. The Evolution of Development Theory and Tourism

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