Causality Between Economic Growth and Tourism Development in the Middle East and North Africa (MENA)

Tourism is recognized as one of the pillars of sustainable development in views of many economists. Tourists can play an important role to identify opportunities and constraints of a country and it can play a role in the development of economic relations, regional and national development and diversification of the national economy and regional. We analyze the relationship between economic growth and tourism development in the MENA region with causality model and estimates the relationship with the fixed effects method for the period 1999 to 2009. Based on the results, the tourism and economic growth in MENA countries, there has a two-way causality. And if economic growth in MENA countries have one percentage increase, tourism in the MENA countries 21/0% will increase. On the other hand, if arrival tourist to MENA countries has one percentage increase, then GDP for MENA countries -as an indicator for economic growth- have 14/0% increase.