Date of Conferral

5-2-2024

Date of Award

5-2-2024

Degree

Ph.D.

School

Public Policy and Administration

Advisor

George Kieh

Abstract

Unemployment is a major challenge for policymakers in Botswana. Past efforts by government officials to create employment have included diversification away from raw diamond mining and export by offering tax incentives to attract foreign direct investment (FDI) in the manufacturing sector, among other strategies. It was unknown whether this strategy might be successful in the tourism sector, which is more labor-intensive than the manufacturing sector. The purpose of this quantitative study was to determine the impact, if any, of tax incentives offered in the tourism sector on FDI and employment. The theoretical foundation for the study was Keynesian economic theory, which asserted that the government has a role to play in boosting the investment spending of private firms and returning the economy to full employment. The research questions addressed (a) the relationship, between tax incentives, FDI, and employment creation in Botswana and (b) the mediating role, of FDI in tax incentives and employment creation in Botswana. A time-series design was applied that featured multiple regression for data analysis, using SPSS software. Findings showed that there was an impact of tax incentives on FDI and/or employment creation in Botswana’s tourism sector, but not in the mining sector. The findings were consistent with the Keynesian theory of employment that reducing taxes has a positive effect on employment creation. These results may influence Botswana policymakers to concentrate their efforts on employment creation in tourism and other labor-intensive sectors, particularly considering the expected positive social change impact on individuals who are employed in the tourism sector, and the expected resultant spillover effect into related sectors.

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