Hosting the World Cup: Is it Beneficial for a Country’s Economic Growth?

Suppose: the streets echoing with slogans, flags wave from car windows, and cities pulsate with global colour. The FIFA World Cup is not just a sporting tournament, it’s a global spectacle. But behind the glory of this football fever lies a tough economic question: Is hosting the World Cup actually beneficial to a country’s economic growth? The expectations are high. Take Brazil in 2014, the government spent over $11 billion USD on infrastructure, stadiums, and urban development. Brazil hosted over 1 million foreign visitors, who generated $4.8 billion in revenue, Brazil’s Ministry of Tourism estimates. Over 3.6 million jobs were supposedly created or sustained as a consequence. But did it last? Economists indicate not. The Arena da Amazonia in Manaus, that most expensive and remote stadium, has since succumbed to the weight of maintenance charges and meager use. It is a “white elephant,” detractors claim. Contrarily, a 2017 University of São Paulo study found no measurable long-run GDP growth in host cities compared to non-host cities.

Contrast that with Germany’s 2006 World Cup, a textbook success. They had good infrastructure already in place and spent no more than $4.6 billion USD, and tourism was boosted 25% in the year of the tournament. A 2007 Deutsche Bank report credited the event with a sustained boost to Germany’s international brand and tourist value. They constructed the stadiums into existing cityscapes and are still in use today.

Russia 2018 invested around $14.6 billion USD and welcomed over 3 million visitors, while generating an estimated $14 billion economic contribution . Yet, one report from Moody’s quoted that the long-term benefits were “limited and short-lived” since most of the investments didn’t directly correlate into long-lasting economic growth.

Qatar 2022 spent a record of over $220 billion USD, while the majority of that was invested in national infrastructure, not just World Cup sites. Its long-term outcome is hard to tell, but Qatar plans to downsize stadiums and convert them into schools and hotels, an innovative take on the legacy problem which is still yet to happen as stadiums are left abandoned to this day.

Is it worth it, then? If the country plays by the rules, with sustainable development, legacy-focused infrastructure, and realistic expectations, the World Cup can bring a massive economic windfall. But for most of them, the final whistle is the party’s end and the start of a financial hangover.

– By Sean Hirabe