ABSTRACT
The tourism sector may also stimulate longer-term dynamic effects, in addition to the direct and indirect static effects that occur in the same period as tourism spending. The theory on dynamic effects is not strong and many economists working with neo-classical models are unable to account for how structural change occurs in the economy. There is virtually no assessment of how dynamic effects specifically impact the poor (with the exception of transport investment). However, dynamic effects are potentially large and should not be ignored. It is possible that most of the poverty-alleviating effects from tourism development in the long run are derived from the dynamic effects of pathway 3.
