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Mega-Sporting Events in Developing Nations: Playing the way to Prosperity?

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  • Victor A. Matheson
  • Robert A. Baade

    ()

Abstract

Supporters of mega-sporting events such as the World Cup and Olympics claim that these events attract hoards of wealthy visitors and lead to lasting economic benefits for the host regions. For this reason, cities and countries compete vigorously for the right to stage these spectacles. Recently, developing countries have become increasingly vocal in demanding that they get the right to share in the economic benefits of these international games. China, for example, has been awarded the 2008 Summer Olympics, and an African nation seems destined to host the 2010 World Cup. The specialized infrastructure and operating expenses required to host these events, however, can be extremely costly, and it is not at all clear that either the long or short-term benefits of the games are anywhere nearly large enough to cover these costs. This paper reviews other researchers' as well as our own previous work on mega-sporting events such as the Super Bowl and World Series as well as international events like the World Cup and Olympics. Independent researchers nearly unanimously find that boosters' projections of the economic impact of sporting events exaggerate the true economic impact of these competitions by a wide margin. In particular, in this paper we focus on the particular circumstances that face developing countries hosting these games. Our research suggests that in most cases mega-sporting events are an even worse investment for developing countries than for industrialized countries.

Suggested Citation

  • Victor A. Matheson & Robert A. Baade, "undated". "Mega-Sporting Events in Developing Nations: Playing the way to Prosperity?," Center for Development Economics 174, Department of Economics, Williams College.
  • Handle: RePEc:wil:wilcde:174
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    File URL: http://web.williams.edu/Economics/wp/mathesonprosperity.pdf
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    References listed on IDEAS

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    1. Robert Baade & Victor Matheson, 1999. "An assessment of the economic impact of the american football championship, the Superbowl, on host communities," IASE Conference Papers 9903, International Association of Sports Economists.
    2. Robert Baade & Victor Matheson, 2004. "The Quest for the Cup: Assessing the Economic Impact of the World Cup," Regional Studies, Taylor & Francis Journals, vol. 38(4), pages 343-354.
    3. John J. Siegfried & Andrew Zimbalist, 2000. "The Economics of Sports Facilities and Their Communities," Journal of Economic Perspectives, American Economic Association, vol. 14(3), pages 95-114, Summer.
    4. Robert Baade & Victor Matheson, 2000. "Bidding for the Olympics: Fools Gold?," IASE Conference Papers 0007, International Association of Sports Economists.
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    Citations

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    Cited by:

    1. Swart, Kamilla & Bob, Urmilla, 2012. "Listening to community voices: Athlone and green point residents' views on the location of the 2010 FIFA World Cup Stadium in Cape Town," Edition HWWI: Chapters,in: Zur Ökonomik von Spitzenleistungen im internationalen Sport, pages 101-122 Hamburg Institute of International Economics (HWWI).
    2. Jeroen Schokkaert & Johan F.M. Swinnen & Thijs Vandemoortele, 2012. "Mega Events and Sports Institutional Development: The Impact of the World Cup on Football Academies in Africa," Chapters,in: International Handbook on the Economics of Mega Sporting Events, chapter 19 Edward Elgar Publishing.
    3. Roberto Gásquez & Vicente Royuela, 2014. "Is Football an Indicator of Development at the International Level?," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 117(3), pages 827-848, July.
    4. Robert Baumann & Victor Matheson, 2013. "Infrastructure Investments and Mega-Sports Events: Comparing the Experience of Developing and Industrialized Countries," Working Papers 1305, College of the Holy Cross, Department of Economics.
    5. Brad R. Humphreys & Bruce K. Johnson & John C. Whitehead, 2017. "Validity and Reliability of Contingent Valuation and Life Satisfaction Measures of Welfare: An Application to the Value of National Olympic Success," Working Papers 17-08, Department of Economics, Appalachian State University.
    6. Vörös, Tünde, 2017. "Költség-haszon elemzési keretrendszer sportberuházások társadalmi-gazdasági értékeléséhez
      [An economic framework for cost-benefit analysis of sports facilities]
      ," Közgazdasági Szemle (Economic Review - monthly of the Hungarian Academy of Sciences), Közgazdasági Szemle Alapítvány (Economic Review Foundation), vol. 0(4), pages 394-420.
    7. P.A. Black, 2004. "Economic Impact Analysis: Methodological Note," South African Journal of Economics, Economic Society of South Africa, vol. 72(5), pages 1069-1075, December.
    8. Wolfgang Maennig & Florian Schwarthoff, 2006. "Stadium Architecture and regional economic development: International experience and the plans of Durban," Working Papers 200604, Chair for Economic Policy, University of Hamburg.
    9. Simon Planells Struse & Daniel Montolio, 2014. "The effect of football matches on crime patterns in Barcelona," ERSA conference papers ersa14p1606, European Regional Science Association.
    10. Kavetsos, Georgios & Szymanski, Stefan, 2010. "National well-being and international sports events," Journal of Economic Psychology, Elsevier, vol. 31(2), pages 158-171, April.
    11. Daniel Montolio & Simón Planells-Struse, 2015. "Measuring the negative externalities of a private leisure activity: hooligans and pickpockets around the stadium," Working Papers 2015/15, Institut d'Economia de Barcelona (IEB).

    More about this item

    Keywords

    Olympics; World Cup; Sports; Development Creation Date: 2003-03-15;

    JEL classification:

    • O2 - Economic Development, Innovation, Technological Change, and Growth - - Development Planning and Policy
    • L83 - Industrial Organization - - Industry Studies: Services - - - Sports; Gambling; Restaurants; Recreation; Tourism

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