There is a large literature that shows that mega-event investment is lousy stimulus:
Brazil is looking to the FIFA World Cup, starting next week, to jumpstart its sluggish economy as millions of tourists traverse the country to see the games.
Brazil’s government estimates that the some 3.7 million people traveling throughout the country for the global soccer competition will add about $3.03 billion in spending to Latin America’s largest economy.
The bulk of that spending will come from tourists attending the actual matches, though travelers going to other events linked to the World Cup will still add $1.19 billion in direct spending, according to Brazil’s Ministry of Tourism.
However, analysts warn that the World Cup likely won’t provide any long-term economic stimulus, when the additional revenue won’t reach the levels needed to sway a $2.2 trillion economy.
“Successfully hosting the 2014 World Cup will raise Brazil’s stature on the world stage, but the benefits will be short-lived for most rated Brazilian companies, infrastructure providers, host cities and states and the Brazilian government,” analysts at Moody’s Investors Service wrote in a report earlier this year.
Brazilians aren’t all that impressed with the economic impact of the games, either.
A mere 34% of Brazilians think the World Cup will create more jobs and boost the economy, according to a survey from the Pew Research Center. Many instead say they would’ve preferred the government to direct its hefty spending on the games to education, health care and other public services.
via blogs.wsj.com
This might be a bigger problem than all of that flopping.
