Two Paragraphs That Explain The Real Reason Countries Host The Olympics And The World Cup

Author Simon Kuper wrote a story for ESPNFC about the 2014 World Cup in Brazil today.

It contains some great insights into why mega sporting events never have the economic benefits their organisers promise.

It also pinpoints the real reason why countries still host things like the World Cup and the Olympics, despite the cost — they’re fun and they make people happy.

Kuper argues that we misunderstand the nature of mega sporting events. These things aren’t economic stimulus programs. They aren’t infrastructural legacy projects with tangible societal benefits.

As he notes, “The things you need for a soccer tournament are almost never the things you need for daily life.”

Brazil will spend $US3.5 billion on stadium construction for the World Cup — a cost that has a minuscule long-term benefit because several of these stadiums are expected to fall into disuse after the tournament.

As far back as Sarajevo in 1984, Olympic host cities have long been stuck with “white elephants” — costly structures that serve no purpose once the games are over. Athens is filled with them.

Now, it’s Brazil’s turn.

None of this is new. In the last decade or so, study after study has shown that hosting events like the Olympics has a negligible economic benefit, or even a negative economic impact.

But countries continue to fight like crazy to host them.

Kuper says it’s because they’re fun:

“The Brazilian World Cup is best understood as a party. You don’t host a party to get rich. You do it to have fun, and Brazilians will have fun. Yet there’s something obscene about hosting an extravagant party in a country where millions of people need houses, electricity, doctors. That’s what bothered the protestors.”

So hosting World Cups is for suckers, right?

Not necessarily.

To extend Kuper’s metaphor, parties are fun. They make people happy. And there’s actually research that says hosting big sporting events results in a measurable increase in happiness for local populations.

In Kuper’s book, Soccernomics, he wrote about just that:

“Georgios Kavetsos and Stefan Szymanskin (with a lot of help from Robert McCulloch, guru of happiness research) took the European Commission’s happiness data for twelve western European countries from 1974 to 2004 and checked whether it correlated at all with sports tournaments. The obvious first question was whether people became happier when their national team did well. It turned out they they didn’t: there was no visible correlation. Then Kavetsos and Stefan looked at hosting and happiness, and here they found a link. After a country hosts a soccer tournament, its inhabitants report increased happiness.

Hosting the World Cups does have a benefit. It’s just not economic in nature.

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