Tourism Development Effectiveness in Enhancing Wellbeing in Developing Countries: A Reality or Myth

Abstract

ABSTRACT This research examines tourism development’s effectiveness in improving well-being by contextualizing economic growth, political stability, and population growth in developing South Asian economies. We applied panel econometric techniques (including PMG-ARDL estimation) to derive useful knowledge from the dataset. The findings reveal that tourism development impacts different countries’ well-being by contextualizing their economic, population growth, and political situations. Tourism development positively influences well-being and economic growth indicators at the regional level. Besides, population growth and political stability also positively contribute to well-being in South Asia. The cross-sectional country-level findings indicate that tourism development improves well-being in all the selected countries; however, economic growth only positively influences well-being in Pakistan, India, Sri Lanka, and Maldives. The Granger causality runs from tourism development to economic growth and well-being, discovering the tourism-led economic growth-led well-being hypothesis. The cross-sectional country-level findings indicate that political unrest worsens well-being in all the selected countries; however, population growth only negatively impacts Pakistan and Sri Lanka. Political stability Granger cause tourism development; thus, we argue that political stability enhances tourism development leading to economic growth and promoting well-being. Theoretical and practical policy implications are provided.