Making the Least of It: Brazil’s World Cup

Over the past week, Brazil has been swept up in a series of massive protests. Originally stemming from rising bus fares in São Paulo, they have expanded across the country into a more generalized critique of the governing system. Some of the complaints have been directed at Brazil’s preparations for next year’s World Cup and the Summer Olympics which Rio de Janeiro will host in 2016. Specifically, Brazilians are upset at how many resources are being wasted on stadiums while more pressing issues like education and a slowing economy get the short shrift.*

On the whole, the evidence seems to point toward hosting large-scale sporting events as being a tremendous waste of resources for a country relative to the increased tourism and notoriety. I think this would be increasingly the case for larger, multi-sport events like the Olympics where many of the event spaces serve no post-Olympic purpose (i.e. building baseball stadiums in countries where no one plays baseball). That said, I think there are benefits that can arise from preparing for large events like the World Cup or Olympics that make it less of a boondoggle than it appears.

For instance, in the Brazilian case, building or refurbishing a bunch of state-of-the-art soccer stadiums for the World Cup is maybe not the best use of government resources, but it is an investment in capital that will at least be used. Brazil has a thriving domestic league and clubs getting to play in those stadiums will probably increase revenues, while the stadium experience will probably be safer and more comfortable for the attending fans.

More importantly, large-scale sporting events can be an important impetus to improve certain types of infrastructure. Brazil’s transportation infrastructure is widely regarded to be terrible. Hosting an event like the World Cup requires being able to move large numbers of people quickly across and between cities. Hosting therefore necessitates a country improve its transportation infrastructure or risk the humiliation of failure with the whole world watching. Obviously, improving infrastructure should be a priority of any government regardless of the World Cup, but politicians face a lot of conflicting interests, especially in a country like Brazil with its unstable parties, and those improvements often get put off or underfunded in order to spend on more short-term projects. If an outside pressure is a way to get those improvements done when they won’t otherwise, hosting can be more worth it than the raw numbers might indicate.

The problem in Brazil, however, is that those very improvements to the transportation infrastructure have failed to materialize. Because of delays in auctioning contracts, there will only be time for superficial improvements to a number of the country’s already constrained airports. Public fund were supposed to be directed toward urban renewal projects and transportation improvements such as rail lines to São Paulo’s airports, but are instead being spent on stadiums that may not even be ready for the World Cup.

It’s of little wonder that Brazilians are frustrated. They are staring down the barrel of a World Cup that looks set to bring an excess of the costs and few of the benefits it entails, with further preparation pending for the Olympics. All while the economy slows and inflation creeps upward.

* For a deeper look at the protests, I recommend following @riogringa. She has been posting tons of great links in both English and Portuguese.

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