02 March 2010

The Sierra Leone Guide to Prevention of Tourism

Mark Weston makes fun of Sierra Leone’s tourism non-policy. 

He has a point though, what is the elasticity of tourist arrivals to visa fees? More broadly what are the determinants of tourist arrivals? Any research here?

I have a theory about the political economy of this. Poor country governments tend to be bad at taxing people. By far the easiest way is at ports. How about instead giving out free visas but increasing taxes on major tourist attractions (e.g. national park entry)?


OMW said...

A random aside: My father once worked for the Seychelles tourism board. He discovered that people were required to pay Visa fees on departing the country - just to ensure their final memory was a positive one! I think they trashed that policy.

Philip Blue said...

You're definitely right about it being the easiest way for low-capacity governments to tax people. Same goes for trade tarrifs. The late Sanjaya Lall admitted as much to me when I accosted him after a lecture once. These governments have to pay for their industrial strategies somehow, was his argument. To which I should have responded, even if it is actually counterproductive to those very strategies?

Anyway, I don't think it's so much price-elasticity as annoyance-elasticity, or the Ryanair phenomenon, as it should probably be called. Most countries charge you for visiting in some way, but it's simply al bundled up into tickets. You only get annoyed once it's itemised. So openness is often counter-productive in this case. Syria recently decided to charge exit tax through air tickets instead of directly. My reaction: far less hyperventilation at the check in counter.

Any solution is going to take money out of government coffers and put it into the hands of local business. Which may or may not be a good thing, but is unlikely to happen, because it's the government who gets to decide. Surely?

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