Caribbean Growth in an International Perspective: The Role of Tourism and Size
September 27, 2012
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Summary
After earlier success, growth performance in most Caribbean countries has been disappointing since the early 1990s. With slower growth, output has fallen behind that of relevant comparator countries. This paper analyzes the growth experience of the Caribbean countries from a cross country perspective. Three findings stand out. First, the slowdown in growth is explained more by a decline in productivity rather than a lack of investment. Second, tourism has been a significant contributor to higher growth (through both capital accumulation and productivity) and lower output volatility, and in many countries there is scope for further expansion of this sector. Third, the small size and the fact that most of these countries are islands have limited growth. Policies aimed at improving productivity, further development of the tourism sector, and regional integration could pay dividends in terms of higher growth in the region.
Subject: Economic sectors, Expenditure, Labor, Production, Production growth, Productivity, Public expenditure review, Total factor productivity, Tourism
Keywords: capital accumulation, Caribbean, economic growth, government spending, growth, growth rate, Production growth, productivity, Public expenditure review, size, TFP component, TFP decline, TFP growth, TFP ratio, Total factor productivity, tourism, WP
Pages:
35
Volume:
2012
DOI:
Issue:
235
Series:
Working Paper No. 2012/235
Stock No:
WPIEA2012235
ISBN:
9781475510898
ISSN:
1018-5941
