In terms of assessing the overall economic impacts of sport mega-events, pre-event appraisals used during bid campaigns often wittingly or unwittingly overestimate a given event’s potential economic consequences. This is often the case where bid campaigners have an interest in highlighting an event’s benefits above possible costs, and is often caused by the methodologies used: economic multipliers tend to be inflated; gross economic output is wrongly equated with event impacts; and the legacy footprint of an event is projected to extend over an implausibly large geographical area (Crompton 1995; Matheson 2008). Often too, pre-event impact studies either underplay or miscalculate the costs associated with the hosting of an event, commonly neglecting to include aspects such as expenses incurred from the start of bid processes (Gibson 1998). Many other hidden costs may surface during an event itself, or in its immediate aftermath, leading to significant mismatches between ex ante projections and ex post assessments. Frequently, the reason is that public authorities regard capital investments on infrastructure as a benefit and not a cost. While it is the case that newly constructed roads and upgraded transport systems can help bolster wider economic production, it is often not understood that these infrastructural developments represent capital deviated from other projects, or increases in government borrowing which in the absence of the mega-event would not have been incurred. More thorough assessments of event expenditures should therefore try to calculate the implications of such opportunity costs for the macroeconomy, the consequences of the possible reduction of tax bases, and the costs that servicing an event place on local economies.
Ideally, the effects, benefits and costs of events should be assessed during four phases: the bid preparation and process period (which in the case of the Olympics and the FIFA finals could range between two and four years); the five- to seven-year period during which preparations towards the event take place; the short period (two to four weeks) during which the event is held; and the more extensive post-event period. Preuss (2004) suggests that in the case of the Olympic Games secondary legacies are influenced by the scale and extent of pre-event infrastructure investments: where the period of investment is longer, the period of impact is extended, in Preuss’s assessment for up to eighteen years. Even so, the condition of the wider national economy can promote or brake positive stimulatory impacts on the host economy. Preuss provocatively contends that a prolonged period of impact could also have negative repercussions for a host city and the national economy, in the case of rapidly expanding economies contributing to rising property prices in the long run.
Mega-events have also been associated with other negative social and environmental legacies (Waitt 2003) including forced evictions, particularly of poorer, inner-city residents in some North American cities, the redirection of public funds from programmes such as housing delivery, and the over-securitisation of host cities (see for example CORHE 2007; Lenskyj 2008).
In all, it is a serious indictment of sport mega-events that most credible ex post and longitudinal studies show that their effects on employment and wages are limited and of a temporary nature, and that they are of negligible consequence for hosts’ macroeconomies (see for example Allmers and Maennig 2008; Baade and Matheson 2004; Preuss 2004; Szymanski 2002). Indeed, many economists consider sport mega-events poor stimulants to economic development (see Coates and Humphreys 2002; Porter 1999). At worst, an event could leave long-term deficits and public debt from which hosts could only emerge several years after the event has come to an end (the most notorious example is the 1976 Olympic Games, which left the authorities of Montreal with a debt which they only managed to repay thirty years later). Possibly one of the strongest predictors of how a host could be affected in the future relates to the set of governance relationships that exists there, and the management structures that are set up to stage an event. In this regard Poynter (2006) notes that in those cases where greatest positive legacy has been achieved – such as Barcelona from its hosting of the 1996 Summer Games – the city bid ‘related to an existing urban development plan’ (Poynter 2006). Greatest success therefore stems from using events to fit into previously developed programmes, and not ‘retrofitting’ programmes into event objectives.
THE 2010 FIFA WORLD CUP: Projections, Preparations and Prospects
South Africa’s hosting of the 2010 FIFA World Cup should be understood within the emergent international political economy of sport mega-events and in terms of the relationship between sport and politics in the country in the post-apartheid era. As suggested, there has been the stronger commercialisation of large-scale sports events over the years, which in turn helped place an economic premium on the hosting of such events for national and urban governments across the world. Against this background, it is useful to regard South Africa’s hosting of the World Cup as the culmination of an extended strategy by the government to use sports events to position the country more prominently in the international arena. This was mostly aimed at drawing foreign direct investment and enhancing the country’s status as a tourist destination. Indeed, since the end of apartheid, South Africa had bid for a significant number of high profile sports events. In 1992 the city of Cape Town put in a bid to host the 2004 Olympic Games. The city failed in its Olympic bid, but there has been speculation that another South African city, Durban, may bid for the 2020 Games. In 1995, South Africa hosted the Rugby World Cup and in 1996 the country provided the venue for the biennial continental football championship, known as the Africa Cup of Nations. Then, in 1999, South Africa hosted the All Africa Games and two further world championships in 2003 – the International Cricket Council’s World Cup, and the Women’s World Cup of Golf. However, securing the rights to host the 2010 FIFA World Cup was a particular victory for South Africa’s bid campaigners, since this presented a unique opportunity to showcase the country on the world stage (for reviews see Cornelissen and Swart 2006).
But the pursuit to host sports events has also been underpinned by a second rationale on the part of South Africa’s leaders, which relates to the powerful connection which has historically existed between sport and politics in the country and the role that sport plays in the socio-cultural imaginary.