By Paul Winters*
In preparation for the 2014 World Cup and the 2016 Olympics in Rio de Janeiro, Brazil is investing very heavily in tourism. Much of this investment seeks to expand the benefits of tourism to new regions in the hope that tourism can be a driver of growth, create jobs and generate higher wages in local economies.
Brazil is not alone in seeking to use tourism as a means to promote development; the IDB alone has tourism-related loans in many countries in the region including Argentina, Bolivia, Costa Rica, the Dominican Republic, Honduras, Nicaragua, Paraguay, and Uruguay.
Of course, some might question whether investing in tourism really promotes development. The industry has been criticized as creating tourist enclaves where the local benefits—in terms of jobs, wages, and poverty alleviation—are minimal.
Others, including the World Tourism Organization, argue that tourism can be a driver of development and poverty alleviation if it is “effectively harnessed”.
In their book Tourism and Poverty Reduction: Pathways to Prosperity, Mitchell and Ashley identify three primary pathways through which tourism makes an impact on poverty:
(i) direct effects,
(ii) secondary effects, and
(iii) dynamic effects.
Yet, they note that insufficient analysis has been conducted in these areas, arguing that tourism researchers “could try harder” to establish tourism-poverty links.
While there has been a great deal of discussion and research on the potential link between tourism and poverty alleviation, the empirical evidence on the effectiveness of promoting tourism to address poverty is almost non-existent.
To address the gap in the empirical knowledge of the tourism-poverty link, the IDB is pushing forward with a new research agenda. An article recently published in Development Policy Review, which I co-authored with Leonardo Corral and Adela Mora Moreda from the IDB, articulates this agenda.
We argue that while analyzing the tourism-poverty link poses peculiar challenges, models exist to conduct the analysis, but at present these models have not been adequately used. Our contention is that the key question is not whether the tourism-poverty link exists—it almost certainly does in some form—but under what conditions it is strongest.
Further, we maintain that the best way to analyze the tourism-poverty link is to incorporate accurate diagnosis and evaluations into tourism projects, using the concepts and approaches found in the literature on impact evaluation.
In pushing this research agenda, our hope is that the systematic analysis of tourism projects and better collection of data on tourism and poverty can enhance our understanding of the tourism-poverty link. Future tourism interventions can then be designed to facilitate and maximize these linkages.