The Non-Monetary Benefits of Hosting the World Cup
As many of you probably already know, the FIFA World Cup took place over the summer, with Spain lifting the trophy. And many of you who do pub quizzes probably know that the first one was held in 1930 in Uruguay with Uruguay winning.
But for this article, I wanted to move away from these basic facts of the sport and look more into why a country would want to host this major event.
It has historically cost countries billions to host the World Cup for little gains. Robert A. Baade and Victor A. Matheson’s study into the economic impact of the 1994 World Cup highlighted how the initial reportedly conservative estimate of a $4 billion boost to the economy was incorrect and there was actually an income loss of $9.26 billion. This highlights how it is difficult to justify hosting World Cups on economic grounds alone.
So then why do countries want to host the World Cup if it is so costly?
Hosting does offer international prestige and visibility, which can help boost a country’s global image and attract tourism in the years that follow. Developing countries, in particular, view hosting as an opportunity to signal their arrival on the international stage and reinforce their political credibility as capable global actors. South Africa, the 2010 hosts, for instance, argued that the tournament would encourage nation-building and social cohesion while instilling continental pride.
Research by Vanessa Barolsky shows this was true as her focus group participants, who ranged in demographics, claimed that the World Cup positively impacted social cohesion and nation building as everyone had a common goal in supporting Bafana Bafana. Perhaps this was more vital in a country like South Africa which had previously been plagued with racial division under apartheid.
Yet in South Africa, there were still concerns over the fiscal burden and the limited long-term economic return the World Cup brought. In the years leading up to South Africa’s World Cup, academics tried to discourage developing countries, such as South Africa, from hosting the event due to the significant refurbishments required to meet FIFA’s demands. They argued that this represented a poor use of public funds, which could have been spent on improving the lives of less well-off nationals instead of building new sports facilities. A view tragically proven when the cost of Cape Town stadium was three times the entire housing budget for a single South African province in 2010. All in all, the estimated costs of South Africa hosting the event, which was expected to be just over $130 million in 2003, had ballooned to $1 billion by 2006.
Yet even these academics do agree that the benefits of publicity and nation building can help unify the country. But the question does have to be raised if national unity and nation building as well as the raising of a country’s public image are worth the financial constraints that hosting a World Cup creates.
A way of dealing with issues around financing these events is by co-hosting them. By doing this, one is able to spread the costs that come with hosting a major sporting event and also still reap the benefits derived from hosting these events like nation building and national unity. To date only two FIFA World Cups have been co-hosted. The impetus for this was set by the 2002 South Korea and Japan World Cup where the benefits of co-hosting really came alight. Here Japan and Korea were able to split the costs required for hosting the event with Japan spending $4 billion to build and refurbish stadiums and Korea spending nearly $2 billion. As we have progressed through the 21st century we have seen a rise in the co-hosting of these mega-events as costs of running these also rise.
Co-hosting also has the additional benefit of improving relations with the nations one co-hosts with. It has been argued that the decision to host the 2002 World Cup between South Korea and Japan was a way of trying to improve relations between these two nations that have been tainted by Japanese annexation of the Korean peninsula in 1910 and by colonial oppression in the first half of the 20th century. By bringing thetwo into an alliance to host the World Cup, there was hope that these relations would improve.
So, as has been explained it is difficult to justify hosting the World Cup in economic terms. Instead, one should look at explaining why nations host the World Cup through the indirect benefits surrounding nation building and national unity. To help manage with these costs, nations have turned to co-hosting these events which also comes with the added benefit of improving international relations. Perhaps it is for these reasons that the next World Cup in 2030 will also be co-hosted.
Bibliography
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