Pat Garofalo is the author of The Billionaire Boondoggle: How Our Politicians Let Corporations and Bigwigs Steal Our Money and Jobs, from which this piece is adapted, and the managing editor of TalkPoverty.org.
Last summer, France’s men’s soccer team won the World Cup for the first time since 1998. Now the French women’s team—ranked fourth in the world—has the opportunity to do the same, and on home soil too, just like that ’98 men’s squad.
But the expectation is that even if France’s team falls to the Americans, Germans, or a dark horse team in the Women’s World Cup, which kicks off on June 7, the nine French cities that host the matches will still be winners thanks to the economic boost that comes from the tourism that accompanies such a big, glorious sporting spectacle.
As constant as Carli Lloyd banging in goals in big games, before and after each World Cup we’re showered with assessments of the millions or even billions of dollars they bring in. Those numbers are used to justify spending money on building or refurbishing stadiums and taking on all the extraneous costs, such as increased security, that come with hosting.
The sad truth, though, is that the economic effect from hosting the World Cup is as nonexistent as a foul on Neymar before one of his famous dives. Some cities even refuse to be part of their country’s bid—Chicago, Minneapolis, and Vancouver backed out of contention for hosting matches in the 2026 World Cup, citing financial concerns. While there are certainly benefits to having the tournament in a city, an economic jolt isn’t one of them. Why not? After all, there are lots of people, attending lots of games, and presumably they need to eat and sleep, all within the local community.
Well, there are several factors at play that diminish the expected economic impact of the World Cup—or that of any big sporting event, such as the Olympics or the Super Bowl.
First is what economists call the substitution effect. For instance, if instead of going to the movies or a fancy dinner, someone decides to go take in a World Cup game, no new economic activity has been created. Spending has simply gone from benefiting the movie theater or restaurateur to whoever profits from the sporting event.
Issue number two is known as “crowding out.” It’s the failure to account for the spending or tourism that would have occurred but didn’t due to the World Cup itself. Ever considered going to a particular bar or restaurant but then decided not to because “that place will probably be packed”? Some of the spending done by those in the crowd merely displaces other spending that would have happened anyway.
Two other factors are worth mentioning. The first is what German economist Wolfgang Maennig has termed the “couch potato effect”: people from a local population stay home to watch an event, thereby limiting their spending. Adding a tourist but encouraging two locals to stay home and watch a World Cup game on television rather than attending their local soccer club’s game incurs both a benefit and a cost to the local economy, but many analyses treat the new tourist’s money as an addition to the baseline, with no subtraction.
The other factor is known as “time switching,” in which consumer spending that would have happened anyway is merely moved up due to the event. For example: Is that World Cup visitor to Paris really a new visitor who would have not come at all without the tournament, or merely someone who would have come to the city anyway, but shifted her visit forward a month in order to see Team USA play?
Finally, some of the money visitors spend at the Cup inevitably leaks out of the local community and into a corporate headquarters elsewhere. For instance, does a Coke sold at the stadium hosting a World Cup game benefit the local economy or the Coca-Cola corporation’s bottom line in Atlanta, where the company is based?
All of those effects blunt the economic impact hosts can expect. And this isn’t all a theoretical case. Economists and other academics have searched for some sort of impact from the World Cup worth getting excited about. None has been found, at least when it comes to the more heavily-studied men’s tournament, which also jibes with the nonexistent boons found from hosting the Olympics.
A study of the 1994 men’s World Cup in the United States, which is still the most well-attended World Cup in history, found that American cities that hosted games “experienced cumulative losses of $5.5 to $9.3 billion as opposed to ex ante estimates of a $4 billion gain touted by event boosters.” A study of the 2006 men’s World Cup in Germany also found no significant economic improvements: On everything from jobs to tourism, the effects of hosting were negligible, at best. There’s little reason to think the Women’s World Cup will be any different.
At least in countries such as the United States, France, and Germany, though, the type of stadiums required to host the tournament already exist, minimizing the upfront costs, since not much that’s new has to be built.
The same can’t be said, though, of a country such as South Africa, where, in cities like Cape Town, the stadiums used to such fanfare during the 2010 tournament are now white elephants, a testament to economic promises broken. The story is the same for Brasilia and Natal in the 2014 host country, Brazil: Stadiums in those cities are struggling to find an afterlife. The big lie regarding what those cities and countries could expect in benefits convinced them to build facilities that have no real purpose today. A France, England, or Canada can afford to host a World Cup and get nothing material in return for its investment. South Africa and Brazil couldn’t.
It’s not all doom and gloom, though. Hosting a World Cup does have one, big, beneficial effect that could make all the other costs worth it: It makes citizens happier. In fact, Maennig’s study of the 2006 men’s World Cup in Germany—an event that can be treated as broadly analogous to one in France—found that increased happiness is among the “greatest measurable effects” of the tournament.
“If the World Cup makes people happy, we should invest in a World Cup,” says Maennig. “But we should stop pretending that hosting a World Cup will make us rich. It’s not true.” The women’s World Cup also causes a demonstrable increase in attendance at women’s professional soccer games, at least for a time.
For France, then, hosting the tournament won’t make the population any wealthier, but it could make them happier, especially if their team brings home its first women’s title. And I’d guess that if the French women are crowned champions, no one is going to complain about an economic impact prediction that deserves a red card.