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The Economic Impacts of Government Financing of the 2010 FIFA World Cup

Author

Listed:
  • Ramos Mabugu

    () (Financial and Fiscal Commission)

  • Ahmed Mohamed

    () (IDASA)

Abstract

This paper presents estimates of the economic impacts of financing the hosting of the 2010 FIFA World Cup by the government of South Africa. Ex ante analysis using a fiscal social accounting matrix model indicates that hosting of the event impacts positively on gross domestic product and imports. The positive impact on imports will, inter alia, lead to deterioration in the current account deficit for a given amount of exports. Owners of capital benefit more than owners of labour as a result of 2010 FIFA World Cup expenditures by the government. Middle-income Black households are the largest winners, followed by high-income Whites. Asians experience the least gain. These outcomes are explained by the initial factor endowments and their sectoral allocation in the social accounting matrix. Government revenue goes up in response to the demand injection, and a large proportion of it accrues to central government and local government respectively.

Suggested Citation

  • Ramos Mabugu & Ahmed Mohamed, 2008. "The Economic Impacts of Government Financing of the 2010 FIFA World Cup," Working Papers 08/2008, Stellenbosch University, Department of Economics.
  • Handle: RePEc:sza:wpaper:wpapers56
    as

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    File URL: https://www.ekon.sun.ac.za/wpapers/2008/wp082008/wp-08-2008.pdf
    File Function: First version, 2008
    Download Restriction: no

    More about this item

    Keywords

    2010 FIFA World Cup; Economic Impact; SAM Modelling; Legacy; South Africa;

    JEL classification:

    • C68 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - Computable General Equilibrium Models
    • D58 - Microeconomics - - General Equilibrium and Disequilibrium - - - Computable and Other Applied General Equilibrium Models
    • L83 - Industrial Organization - - Industry Studies: Services - - - Sports; Gambling; Restaurants; Recreation; Tourism

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