ECONOMICS UNIQUENESS

7
UNESCO World Heritage List, Tourism,
and Economic Growth
Rabah Arezki
Economist, International Monetary Fund,
with Reda Cherif, and John Piotrowski
This chapter investigates whether tourism specialization is a viable strategy for
development. The authors estimate standard growth equations augmented with
a variable measuring tourism specialization using instrumental variables techniques
for a large cross-section of countries for the period 1980–2002. To identify
a causal relationship between specialization in tourism activities and economic
development, the authors introduce a novel instrument for tourism based on
the United Nations Educational, Scientifi c and Cultural Organization (UNESCO)
World Heritage List, fi nding that there is a positive relationship between the extent
of tourism specialization and economic growth. This instrument proves to be a
strong one, in that the presence of World Heritage sites signifi cantly fosters tourism
activities. The study indicates that an increase of one standard deviation in
the share of tourism in exports leads to about 0.5 percentage point in additional
annual growth, everything else being constant. The result holds against a large
array of robustness checks. The chapter concludes by stating that one advantage
of tourism development as opposed to a manufacturing, export-oriented strategy
is that it requires less capital, infrastructure, and skilled labor. However by nature,
the tourism industry relies on a limited set of services produced with little room
for expansion and labor reallocation, thus it needs to be part of a comprehensive
strategy of economic diversifi cation in order to be sustainable and inclusive.
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