Does hosting the World Cup (or Olympics) actually pay off?

Hosting a global sporting occasion won’t make a country rich, and isn’t even that good for tourism — but it will make its people happy.

Brazil may have never wanted for places to play soccer, but that didn’t stop the country from spending billions of dollars on stadiums for the 2014 World Cup. The Arena Amazonia, a €250m edifice designed to look like a woven basket, was built in a rain-forest city where the professional team regularly draws fewer than 2,000 fans per game. And Brazil is only getting started. The country, which is also hosting the 2016 Summer Olympics in Rio de Janeiro, has embarked on an infrastructure splurge that may top €25 billion. The spending is meant to underscore Brazil’s emergence as an economic power. The country’s leaders insist that it’s also intended to increase the nation’s prosperity.

The idea that big sporting events are good for growth is relatively new. A 1956 article in the New York Times newspaper noted the curious hopes of Australian officials who were “somewhat optimistic” that visitors to the Melbourne Olympics might settle in the city, or perhaps do a little business there. “Ordinarily,” it said, “being host for the Olympic Games is unlikely to gain a nation much beyond prestige.” But as the cost of hosting rose inexorably, so did the supposed benefits. The Olympics and the World Cup are now routinely described as economic engines. Four American cities — Boston, Los Angeles, San Francisco and Washington — recently announced that they were flirting with hosting the 2024 Summer Olympics, and in each case a justification was economic development. In Massachusetts, a state-appointed commission led by a construction executive suggested that a Boston Olympiad could “catalyze and accelerate the economic development and infrastructure improvements necessary to ensure that Massachusetts can compete globally now and into the future.”