Sports and Development An Economic Perspective on the Impact of.pptVIP

Sports and Development: An Economic Perspective on the Impact of the 2010 World Cup Jo Swinnen Thijs Vandemoortele Cape Town Conference March 2008 Overview Introduction The Impact of Infrastructure Investments Sports, Migration Development Concluding Comments 1. Introduction Development: Physical development Vanden Auweele, 2006 Social development UN, 2006 Development of sports infrastructure/competition Economic development Focus: Economic Development income growth poverty alleviation 1. Introduction How important is sports in the economy ? Data are poor and ad hoc 2 million people 1.3% employed in the sports economy in EU-15 Andreff Szymanski, 2006 1 to 3% of GDP is accounted for by sports expenditures in Europe Currently in UK: 2% of GDP 3 times as high as agricultural economy … 1. Introduction Leading sports teams : large commercial enterprises Value of Manchester United 1.4 billion dollars ~ total annual output of Sierra Leone Value of richest US football baseball teams 1 billion dollars average US football team 0.5 billion dollars 2. The Impact of Infrastructure Investments Bids to host mega-event: increased over time Growing demand from emerging and developing countries and quasi-fixed supply Large perceived economic benefits is a popular argument to host a mega-event and to lobby for public funds Porter, 1999; Noll Zimbalist 1997 : Supported by consulting reports: irrespective of country and event, always large positive economic impact Johnson Sack Academic critiques on these studies: Net benefits are heavily overestimated Kesenne, 1999; Porter, 1999; Lee, 2001; Matheson, 2002; Szymanski, 2002; Bohlmann, 2006; Matheson 2006; Brenke Wagner, 2006; Madden, 2006 Because the studies ignore Substitution effects Crowding out effects Leakages Opportunity costs of public funds … Always prospective studies, few ex-post no incentives for government, consultants or bidding company Coates Humphreys, 200