Analysis of tourism-oriented projects in Colombia: Are these projects contributing to reduce income inequality and poverty?

Abstract

[eng] In recent years, tourism has demonstrated the potential to generate economic growth. However, its effects on reducing income inequality have generated mixed results among researchers. A common consensus though is that the impact of tourism on income inequality depends on the country and the method used to estimate it. In developing countries, such as Colombia, tourism development has been prioritized to achieve sustainable development. The Fondo Nacional de Turismo [FONTUR] oversees collecting the corporate tax from active tourism providers. FONTUR is also responsible for approving the investment of this revenue for promoting tourism-oriented projects that are aligned with the national tourism policy. This study uses a panel fixed effect model to estimate the impact of these projects between 2013 and 2021 on the income inequality and poverty of 24 Colombian states. Our findings show that the tourism-oriented projects aim to decrease income inequality and poverty in the early-stage tourism destinations but don’t have an impact on the more mature ones.