Efficiency Gains in Tourism in Cyprus: Myth or Reality?

In divided Cyprus, there are two separate tourism markets, one in the Greek Cypriot South and one in the Turkish Cypriot North. This is a costly reality of the Cyprus problem. The purpose of this paper is to determine the potential “peace dividend”, called efficiency gains, generated by a possible settlement of this problem as a result of an agreement between the two major communities on the island. Based on a survey of primary stakeholders in both parts of the island, the study finds persuasive empirical evidence of significant efficiency gains. However, this optimistic finding is limited by the politics of division which appear to dominate economic rationalism.

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