The Debate: does the social impact of a global event outweigh the economic benefits?

After the excitement of hosting a global event has subsided and the crowds have returned home, is it the social or the economic advances that leave the most important legacy?

Trevor McFarlane outlines why economic advances are the greatest legacy of hosting a mega-event

Bill Clinton knows a thing or two about economic and social development as well as hosting a mega-event. As US President he oversaw a successful period of growth and debt reduction. Through the Clinton Foundation he has helped millions of the world’s poor. Under his presidency the US hosted FIFA’s 1994 World Cup, the 1997 G8 summit in Denver, Colorado and he was also honorary chairman for the USA Bid Committee for FIFA World Cup 2022.

A mega-event can spur economic restructuring, which creates and supports new sectors and, in turn, a raft of new investments and long-term jobs; leading to a stable economy

Trevor McFarlane , Research Director for Middle East and Africa at Gulfstat

In bidding for the tournament he spoke of the economic and social legacy of hosting football’s premier international event. He promised that their bid would advance economic growth by creating new opportunities, and mobilise American citizens to do more to address the social challenges facing their country.

It is clear, then, that social and economic legacies of mega-events are both vitally important. From an economic perspective – if run efficiently – a successful event has the potential to boost an economy. Public investment serves as a catalyst for wider development: promoting private investment; buttressing construction, boosting the tertiary sector; increasing tourism; improving infrastructure and public transportation systems; as well as providing temporary jobs.

In the long term the legacy of this investment can potentially increase international trade, foreign direct investment and overall output. A mega-event can also be a catalyst for economic restructuring, which creates and supports new sectors and, in turn, new investments and long-term jobs. At the same time the host government’s tax base increases allowing further public investment. Of course all of this depends on how well the event is organised. Some events are considered to have had significant losses, such as Olympics in Munich 1972 and Montreal 1976. Other Olympic Games, however, made a financial profit and helped long-term growth prospects of host cities, like Los Angeles 1984, and Atlanta 1996.

Meanwhile social legacy – albeit vitally important – is a rather different story. It has become trendy to discuss the social implications of events, and rightly so. Development experts talk of community infra-structure such as, sports facilities, healthcare clinics and community centres; better quality of life in host cities and redevelop-ment of run down areas.

But measuring this is even trickier than gauging the economic impact, and our assumptions are not always correct. For instance, following the successful 2012 London Olympic Games organisers assumed citizens would become a lot sportier. But Sport England’s Active People Survey shows only modest gains. 

That said, the great work done by international organisations with community leaders to make real change at grassroots level is invaluable. Building much-needed social infrastructure and increasing the general awareness of healthy lifestyles is, of course, important in its own right.
But the big question is whether social or economic advances are the most important legacy of hosting mega-events? At first glance, my answer looks heartless: cash trumps social benefits. But there is more to it. Indeed, the two issues are linked. Without a successful economic legacy, tomorrow’s social gains are harder to make. Economic growth funds better education, healthcare as well as low-income housing. Better job opportunities lead to high wages and higher living standards.

Policy makers profess the importance of the social benefits of hosting mega-events. Yet they understand economic legacy is a more important driver. Chinese officials in Shanghai dubbed the World Expo as their “Economic Olympics” because it would benefit the city in its urban development and economic restructuring, in turn fuelling social advancement.

Jürgen Griesbeck believes that the social impact of sporting events far outweighs the economic benefits

In recent years, there has been an increased focus on the legacy of mega-events such as World Cups and Olympic Games. Due to the global attention that these events bring to a city or country, they are promoted as a huge opportunity for economic returns – through tourism revenues, creation of jobs, infrastructural development and so on.

It is said that marketers will spend US$1.6bn on sponsorship fees and up to three times that amount on marketing in Brazil next year, while the Olympic Games will cost companies over US$2bn in fees alone. Indeed, host cities and countries are frequently confronted with controversy surrounding public spending and, with little evidence of the real social benefits, it is often valid to ask: whose interest do these events actually serve?

People in Brazil recently questioned why the country was hosting two mega sporting events rather than focusing public spending on services such as health, education and employment. The reaction there has shown that mega-events have the potential to drive critical agendas by serving as an accelerator for social development. They represented a unique opportunity for ordinary Brazilians to engage and become active in civil society. A true social legacy is dependent on local ownership and active participation.

Streetfootballworld teamed up with Fifa in 2010 to construct 20 community health, education and sport centres, and the World Cup environment was leveraged with the goal of creating a lasting legacy for local communities across the African continent. The centres are hosted by community-based organisations that can respond to local needs. Streetfootballworld contributed to an integrated legacy strategy for Fifa through its expertise in the area and pre-existing network. The funding was raised through the World Cup’s pool of partners and resources. The project demonstrated how sport can contribute to sustainable social change.

In 2012 Streetfootballworld coordinated the official community health programme RESPECT your Health for the two host countries of UEFA Euro 2012, Poland and Ukraine, promoting healthy lifestyles through training 800 sports coaches in the two countries. Ahead of Brazil 2014, the momentum of the World Cup can be leveraged to give as many people as possible a voice to express what a positive legacy means to them. Football projects have helped to develop violence-preven-tion methodologies that can now be taken into schools, while a learning community, which unites a collective of NGOs, institu-tions and government officials engaged in football for development in Brazil, is also being established.

Looking to Russia in 2018 and Qatar in 2022, social legacy programmes have to be at the top of the agenda. The Qataris have already begun working on their approach and are in a unique position to demonstrate how social legacy can be incorporated before a competitive ball has even been kicked.

The situation in Brazil represented a turning point; not just for the country, but also for the way people approach mega-events. It became abundantly clear that there is a demand for investment, not in infrastructure, but in people – something I believe we will see more and more of in the future. That is why, in the long run, the social legacy of such events should be part of a long-term strategic development plan, the main reason for a city or country to enter a bidding process and the main factor for a bid’s success. A true sign of progress would be the awarding of a future event to the bidder with the strongest social legacy proposal.