The Costs of Brazil vs Germany: Protest and Poverty at Brazil's World Cup

Release Date
June 27, 2014


Government Poverty & Inequality

Brazil gained prestige in landing the World Cup and Olympics, but sometimes hosting a major global event isn’t as glamorous as it seems. For a start, it’s difficult to justify massive spending — Brazil plans to spend $31 billion between the two — for such a temporary payoff. . Many venues created for these events, including those erected for the Olympic Games in Athens and Beijing, have fallen into disrepair after the celebrations ended. Many workers die on these massive construction projects — hundreds, already, for Qatar’s 2022 World Cup. Government often evicts lots of people from their homes, as Beijing did to over 1.5 million people in anticipation of the 2008 Summer Olympics. So why are cities and countries so eager to host? Often for the international prestige. However, support can sour quickly, as it has in Brazil, when the real costs became more apparent. Economist Matt Ryan from Duquesne University asks you to consider those costs now – a country that wins the bid may lose big overall.

  1. 3 Reasons Why Hosting the Olympics Is a Loser’s Game(article): Andrew Zimbalist argues that the Olympics fail to bring in tourism revenue and spending is captured by private interests.
  2. Olympics Disasters: 5 Cities That Spent Too Much(article): Mega events can bankrupt a city.
  3. Helio Beltrão: World Cup Cronyism and the Liberty Movement in Brazil(audio): Businessman Beltrão discusses the costs of the World Cup.

The Costs of USA vs Belgium: Protest and Poverty at Brazil’s World Cup
Did you know that more workers are expected to die building Qatar’s World Cup facilities than died on September 11? Mega sporting events, like the World Cup or Olympics, captivate athletes and fans everywhere, myself included, and for good reason. But they also bring significant hardships to the countries and cities that host them.
So why do countries like Brazil, home of the 2014 World Cup and the 2016 Rio Olympics, compete so fiercely for the chance to serve as hosts? It’s argued that the benefits to the local and national economy, along with prestige on the world stage, make these costs worthwhile. But I think that simply isn’t true.
I’m Matt Ryan, assistant professor of economics at Duquesne University, and I’ve researched this issue as both an economist and a sports fan. And what I’ve found is troubling. First, the human costs: For every athlete on the podium accepting a medal, there are scores of everyday citizens whose lives were turned upside down to make way for the competition. Since 2009, 19,000 families around Rio have been forcibly removed from their homes to make way for World Cup– and Olympic-related projects. And as many as 1.5 million people, about equal to the population of Philadelphia, were displaced to make way for the 2008 Beijing Olympics.
Displacement is not the worst thing that can happen. Qatar won’t host the World Cup until 2022. But hundreds of migrant workers have already died on construction projects there.
The tragedy of these projects is compounded when we see how shortsighted the goals are. Mega-event facilities are frequently left to rot, unused and forgotten once competition comes to a close. The vast majority of the venues from the 2004 Olympic games in Athens, only a decade ago, lie in stark disrepair. The same is true of facilities in Beijing that once hosted Olympic kayaking, baseball, volleyball, and more.
The financial costs are staggering, too. Between the World Cup and the Olympics, Brazil plans to spend over $31 billion. And the final price of such projects is often more than double initial projections. All of this seems especially difficult to justify in countries with high levels of poverty. The $900 million dollars spent on just one World Cup stadium could have built dozens of new hospitals. Imagine what $31 billion dollars could do. The fact is, study after study shows the economic benefits of mega events are suspect at best, and in any case, are nowhere near the level touted by event organizers.
So why are cities and countries across the globe so eager to play host? Pride and politics are often reason enough. Hosting a mega event puts a nation front and center on the world stage. And the national pride stoked by a winning bid often provides leaders with short-term political support.
But as we’ve already seen in Brazil, support sours quickly once people realize that in the end, the benefits may not outweigh the costs. Brazil’s last president spoke proudly of his role in bringing the World Cup and Olympics to his country, saying, “And when I thought about this, I didn’t think about money. I thought of an event of this magnitude.”
Sadly, I think this is common among far too many politicians. The truth is, when it comes to hosting mega events, most countries and their people may be better off on the sideline.