Exploring the links between tourism and quality of institutions

Abstract

This paper introduces a new perspective on the impacts of tourism on host communities by analyzing the links between tourism specialization and quality of institutions. Our research has two principal aims: firstly, to test the significance and sign of this relationship; and secondly, to explore the channels through which tourism could affect institutional quality. To this end, an econometric analysis is conducted using a sample of 92 countries over the period 1995-2014. The results indicate that there is a significant and positive association between tourism specialization and institutional quality. Moreover, this relation can be explained through three main channels: level of income, income inequality, and economic freedom.