The influence of good governance on the tourism sector: The case of South Africa

Year 2023, Volume: 5 Issue: 2, 84 - 95, 04.01.2024

Daniel Francois Meyer Tanya Rheeders

https://doi.org/10.48119/toleho.1299375

Abstract

Over the last decades, the tourism sector has contributed to the national and regional economies in South Africa, while governance levels have regressed over time. The study’s objective was to investigate the impact of good governance on the success and growth of the tourism sector in South Africa, a proxy for developing countries. The hypothesis is that good and effective governance could positively impact tourism growth. A quantitative research methodology was used with econometric methods such as an Autoregressive Distributed Lag Error Correction (ARDL-ECM) process. The estimation indicated a long-run relationship between the variables. The tourism sector contributes significantly to the South African economy, and the government should note the importance of good governance, as indicated through this study, in the success and development of the sector. Given tourism's potential to achieve some of the Sustainable Development Goals and positively influence economic growth and development, relevant parties are urged to pursue good governance in the sector.

Keywords

Good governance, South Africa, tourism development.

References

• Addink, H. (2019). Good governance: Concept and context. United Kingdom: Oxford University Press.
• Akram, S., Sultana, N., Sultana, T., Majeed, M. & Saeed, R. 2021. Country governance, tourism and environment quality: An emerging economy perspective. Management Science Letters, 11 (6), pp.1737-1746.
• Aleksandrovna, S.E. (2022). Tourism is a strategic sector of the economy. International Scientific Research Journal, 3 (10), pp. 559-565.
• Athari, S.A., Alola, U.V., Ghasemi, M. & Alola, A.A., (2021). The (Un) sticky role of exchange and inflation rate in tourism development: insight from the low and high political risk destinations. Current Issues in Tourism, 24 (12), pp. 1670-1685.
• Baig, S. & Zehra, S. (2020). China-Pakistan economic corridor, governance, and tourism nexus: evidence from Gilgit-Baltistan, Pakistan. Current Issues in Tourism, 23 (23), pp. 2884-2889.
• Beha, F. (2023). The Influence of the Quality of Institutions on Tourism in the EU Countries. Journal of Tourism and Services, 14(26), 118-136.
• Bichler, B.F. 2021. Designing tourism governance: The role of local residents. Journal of Destination Marketing & Management, 19, pp.100389.
• Brida, J.G., Gómez, D.M. & Segarra, V. (2020). On the empirical relationship between tourism and economic growth. Tourism Management, 81, pp.104131.
• Cavalheiro, M.B., Joia, L.A. & Cavalheiro, G.M. (2020). Towards a smart tourism destination development model: Promoting environmental, economic, socio-cultural and political values. Tourism Planning and Development, 17, pp.237–259.
• Daryaei, A., Aliashrafipour, M., Eisapour, K., & Afsharian, M. (2012). The effect of good governance on tourism industry development. Advances in environmental biology, 2046-2053.
• Detotto, C., Giannoni, S. & Goavec, C. (2021). Does good governance attract tourists? Tourism Management, 82, pp. 1-36. 104155.
• Dieke, P.U. (2003). Tourism in Africa’s economic development: policy implications. Management Decision, 41 (3), pp. 287-295.
• Duran, C. (2013). Governance for the tourism sector and its measurement. UNWTO Statistics and TSA. Issue Paper Series, pp. 1-34.
• Eagles, PF (2009). Governance of recreation and tourism partnerships in parks and protected areas. Journal of sustainable tourism, 17 (2) , pp. 231-248.
• Engle, R.F. & Granger, C.W. (1987). Cointegration and error correction: representation, estimation, and testing. Econometrica: Journal of the Econometric Society, pp. 251-276.
• Gretzel, U. & Jamal, T. (2020). Guiding principles for good governance of the smart destination. Travel and Tourism Research Association: Advancing Tourism Research Globally. 42, pp. 1-10.
• Hall, C.M. (2013). A typology of governance and its implications for tourism policy analysis. In Tourism governance (pp. 27-47). Routledge.
• Haller, A.P., Butnaru, G.I., Hârșan, G.D.T. & Ştefănică, M. (2021). The relationship between tourism and economic growth in the EU-28. Is there a tendency towards convergence? Economic Research-Ekonomska Istraživanja, 34 (1), pp. 1121-1145.
• Ingram, H., Tabari, S., & Watthanakhomprathip, W. (2013). The impact of political instability on tourism: the case of Thailand. Worldwide hospitality and tourism themes, 5(1), 92-103.
• Jiao, X., Li, G. & Chen, J.L. (2020). Forecasting international tourism demand: a local spatiotemporal model. Annals of Tourism Research, 83, pp. 102937.
• Kaufmann, D. & Kraay, A. & Mastruzzi, M. (2010). The Worldwide Governance Indicators: Methodology and Analytical Issues . World Bank Policy Research Working Paper No. 5430,
• Kubickova, M. 2016. The Role of Government in Tourism: Linking Competitiveness, Freedom, and Developing Economies. Czech Journal of Tourism, 5 (2), pp. 73-92
• Khan, R.E.A., Ahmad, T.I. & Haleem, J. (2021). The governance and tourism: A case of developing countries. Asian Journal of Economic Modeling, 9 (3), pp 199-213.
• Khayrulloevna, A.M. (2020). The substantial economic benefits of tourism. Academy, 3 (54), pp 39-40.
• Kongbuamai, N., Bui, Q., Yousaf, HMAU. & Liu, Y. (2020). The impact of tourism and natural resources on the ecological footprint: a case study of ASEAN countries. Environmental Science and Pollution Research, 27, pp 19251-19264.
• Maniatis, A. (2016). Tourism and the ‘rule of law. African Journal of Hospitality, Tourism and Leisure, 5 (1) , pp 1-13.
• Numbeo. (2023). Crime index by city. [Internet: https://www.numbeo.com/crime/rankings.jsp?title=2023; date of access 2 February 2023].
• Nurman, N., Zainal, Z. & Rajasa, Y. (2021). Good Governance in Structure Belantik Raya People’s Market in Siak District. Jurnal Kajian Pemerintah: Journal of Government, Social and Politics, 7 (2), pp 1-11.
• Osinubi, T.T., Ajide, F.M. & Osinubi, O.B. (2022). Governance, FDI and tourism in top 10 tourist destinations in Africa. Transnational Corporations Review, 14 (2), pp 140-152.
• Özgit, H. (2022). How should small island developing states approach long-term sustainable development solutions? A thematic literature review. Worldwide Hospitality and Tourism Themes, 14 (4), pp 323-328. https://doi.org/10.1108/WHATT-03-2022-0039.
• Harris, R. & Sollis, R. (2003). Applied time series modelling and forecasting. West Sussex. Wiley.
• Institute for Economics & Peace. (2022). Global Peace Index 2021: Measuring Peace in a Complex World. Sydney. < Global Peace Index 2022 – Institute for Economics and Peace > (date of access: 10 April 2023)> Johansen, S. (1991). Estimation and hypothesis testing of cointegration vectors in Gaussian vector autoregressive models. Econometrica: Journal of the Econometric Society, pp.1551-1580.
• Khan, R.E.A., Ahmad, T.I., & Haleem, J. (2021). The governance and tourism: A case of developing countries. Asian Journal of Economic Modelling, 9 (3), pp. 199-213.
• Moscardo, G. (2011). Exploring social representations of tourism planning: Issues for governance. Journal of Sustainable Tourism, 19 (4-5), pp. 423-436.
• Nunkoo, R. (2015). Tourism development and trust in local government. Tourism Management, 46, pp. 623-634. Panapoulou, E. & Pittis, N. (2004). A Comparison of Autoregressive Distributed Lag and Dynamic OLS Cointegration Estimators in the Case of a Serially Correlated Cointegration Error. The Econometric Journal, 7 (2), pp. 585-617.
• Pagliara, F., Aria, M., Russo, L., Della Corte, V. & Nunkoo, R. (2021). Validating a theoretical model of citizens’ trust in tourism development. Socio-Economic Planning Sciences, 73, pp. 100922.
• Pesaran, M.H. & Shin, Y. (1998). An Autoregressive Distributed-Lag Modelling Approach to Cointegration Analysis. In Econometrics and Economic Theory in the 20th Century. The Ragnar Frisch Centennial Symposium, ed. S. Strøm, chap. 11, 371–413. Cambridge: Cambridge University Press.
• Pesaran, M.H, Shin, Y. & Smith, R.J. (2001). Bounds Testing Approaches to the Analysis of Level Relationships. Journal of Applied Econometrics, 16 (3) , pp. 289–326.
• Phakdisoth, L. & Kim, D. (2007). The determinants of inbound tourism in Laos. ASEAN Economic Bulletin, 24 (2), pp. 225-237.
• Raszkowski, A. & Bartniczak, B. (2018). Towards sustainable regional development: economy, society, environment, good governance based on the example of Polish regions. Transformations in Business & Economics, 17 (2(44)), pp. 225-245.
• Ren, T., Can, M., Paramita, S.R., Fang, J. & Wu, W. (2019). The impact of tourism quality on economic development and environment: Evidence from Mediterranean countries. Sustainability, 11 (8), pp. 2296.
• Rheeders, T. & Meyer, D.F. (2023). The development of a regional tourism destination competitiveness measurement instrument. Tourism Hospitality, (4), pp. 1–20. https://doi.org/10.3390/tourhosp4010001 Rodrik, D. (2008). Understanding South Africa's economic puzzles. Economics of Transition, 16(4), 769-797. Roux, E. (2021). Six SA cities mate top 20 list of the ‘most dangerous cities in the world’. // <https://www.thesouthafrican.com/lifestyle/most-dangerous-cities-in-the-world-south-africa/> (date of access: 2 February 2023).
• Salleh, N. H. M., Othman, R., & Ramachandran, S. (2007). Malaysia’s tourism demand from selected countries: The ARDL approach to cointegration. International journal of economics and management, 1(3), 345-363.
• Sánchez-Sánchez, M.D., De-Pablos-Heredero, C. & Montes-Botella, J.L. (2021). A behaviour model for cultural tourism: loyalty to destination. Economic Research-Ekonomska Istraživanja, 34 (1), pp. 2729-2746.
• Sarpong, S.Y., Bein, M.A., Gyamfi, B.A. & Sarkodie, S.A. (2020). The impact of tourism arrivals, tourism receipts and renewable energy consumption on quality of life: A panel study of Southern African region. Heliyon, 6 (11), pp. e05351.
• Schilcher, D. (2007). Growth versus equity: The continuum of pro-poor tourism and neoliberal governance. Current Issues in Tourism, 10 (2-3), pp. 166-193.
• Shah, I.A. (2023). Exploring governance effectiveness, tourism development and poverty reduction relationship in SAARC countries using panel dynamic estimation. Journal of Tourism Futures, (ahead-of-print).
• Shamai, A. & Yousofi Babadi, S. (2018). An analysis of good governance role on sustainable tourism revenues: Case: City of MasjedSeleyman. Urban Economics and Management, 6 (4(24)), pp. 477-496.
• Sharma, C. & Pal, D. (2020). Exchange rate volatility and tourism demand in India: Unraveling the asymmetric relationship. Journal of Travel Research, 59 (7), pp. 1282-1297.
• Shariffuddin, N.S.M., Azinuddin, M., Hanafiah, M.H. & Zain, WHAWM (2021). A comprehensive review of tourism destination competitiveness (TDC) literature. Competitive. Review International Business Journal, 23, pp. 1–34.
• Shrestha, M.B. & Bhatta, G.R. (2018). Selecting appropriate methodological framework for time series data analysis. The Journal of Finance and Data Science, 4 (2), pp. 71-89.
• Siakwah, P., Musavengane, R. & Leonard, L. (2020). Tourism governance and attainment of the sustainable development goals in Africa. Tourism Planning & Development, 17 (4), pp. 355-383.
• Siswanto D.J., Tegor, T., Haqiqi, F., Yusmalina, Y. & Susanto, A. (2022). Human Resources Management in The Country’s Border Region Faces Sector 4.0 and The Covid-19 Pandemic. Al-Tanzim: Jurnal Manajemen Pendidikan Islam. 21 6 (1), pp. 28-42.
• Siskawati, E., Yentifa, A., Zahara, Z. & Gusta, H.D. (2020). Good Governance Implementation in the Development of Sustainable Tourism; The Portrait of Padang City Government. Akuntansi dan Manajemen, 15 (1), pp. 67-76.
• Steyn, R. & Jansen van Vuuren, O. (2016). Relationship between quality of governance and foreign tourist numbers. African Journal of Hospitality, Tourism and Leisure, 5 (4), pp. 1-10.
• Stojanović, I., Ateljević, J. & Stević, R.S. (2016). Good governance as a tool of sustainable development. European Journal of Sustainable Development, 5(4), pp. 558-558.
• Swamy, V., & Lagesh, M.A. (2023). Does good governance influence foreign tourist inflows?Tourism Analysis, 28(1) 47-67. https://doi.org/10.3727/108354222X16484969062783
• Tirado Ballesteros, J.G., & Hernández, M.H. (2019). Promoting tourism through the EU LEADER programme: Understanding Local Action Group governance. European Planning Studies, 27 (2), pp. 396-414.
• United Nations World Tourism Organisation (UNWTO). (2023). Tourism is set to return to pre-pandemic levels in some regions in 2023. // <https://www.unwto.org/news/tourism-set-to-return-to-pre-pandemic-levels-in-some-regions-in-2023> (date of access 20 February 2023).
• Usman, O., Elsalih, O., & Koshadh, O. (2020). Environmental performance and tourism development in EU-28 Countries: the role of institutional quality. Current Issues in Tourism, 23(17):2103-2108.
• Wijaya, A.A.M., Basir, M.A. & Lawelai, H. (2022). Community-based tourism in the development of sustainable tourism in Baubau City. Journal of Research Trends in Social Sciences and Humanities, 1 (1), pp. 28-38.
• World Bank. (2023). Governance Indicators. https://databank.worldbank.org/source/worldwide-governance-indicators. World Travel and Tour Council (WTTC). (2022). South Africa's Travel & Tourism growth to outpace the national economy for the next 10 years. // <https://wttc.org/news-article/south-africas-travel-and-tourisms-growth-to-outpace-the-national-economy-for-the-next-10-years> (date of access 20 February 2023).
• Xue, C., Shahbaz, M., Ahmed, Z., Ahmad, M. & Sinha, A. (2022). Clean energy consumption, economic growth, and environmental sustainability: What is the role of economic policy uncertainty? Renewable Energy, 1 (184), pp. 899-907.