The impact of government policies on destination competitiveness in developing economies

The role government plays in destination competitiveness is reflected in a country’s institutional environment. The main premise of this study is to provide a better understanding about the appropriate levels of government involvement in destination competitiveness. Seven countries of the Central American region were analysed over 18 years. The results indicate that not all government decisions impact destination competitiveness in the same way, as some may have more influence than others. For example, an increase in the level of corruption revealed a positive impact on destination competitiveness while lowering taxes did not encourage an increase in destination competitiveness. This study contributes to the academic literature not only from theory building but also practical implication on the role of government.