The purpose of this dissertation study is to investigate the relationship among tourism competitiveness, quality of life, and freedom. The main premise is that the degree of freedom shapes the relationship between tourism development and quality of life. The study hypothesized that the greater the degree of freedom is, the greater impact tourism development will have on quality of life of residents of a destination. The theoretical framework of this study is based on combining Sen\u27s capability approach with the tourism competitiveness theory. Tourism competitiveness aims at enhancing the quality of life, while Sen\u27s capability approach provides the ingredients for how to improve quality of life through freedom. Thus, the main premise is that the combination of the two theoretical frameworks is possible through the construct of quality of life. The study is applied to the Central American region as tourism has become an important driver for socio-economic progress and growth. The study applied panel data analyses and comparative regression analyses to decipher and understand the context of tourism competitiveness and quality of life. The study built a tourism competitiveness index and investigated the intertemporal effects of tourism competitiveness, quality of life, and freedom. The major findings of this study are as follow. First, long term bi-directional causality was found between tourism competitiveness and quality of life. In other words, tourism not only positively impacts quality of life, but high levels of quality of life have positive influence on tourism competitiveness in the Central American region. This is a major contribution as such assumptions have been mainly hypothesized. Second, economic freedom was found to act as a moderating variable between tourism competitiveness and quality of life. This finding allows us to further understand what impact such relationship between tourism competitiveness and quality of life. Third, economic freedom was found not to have an impact on quality of life as originally thought. However, quality of life was found to have a short-term impact on economic freedom. Finally, economic freedom had a bi-directional relationship with tourism competitiveness. This is a major contribution as such relationship was not previously discussed in the academic literature. The theoretical implication of this study is in terms of combining the capability approach and the competitiveness theory. In terms of managerial implications, governments of the Central American region can work on strategies, such as marketing, to promote tourism which in turn will improve residents\u27 quality of life. At the same time, the government can work on improving residents\u27 well-being while impacting tourism competitiveness
