The Economic Impacts of Government Financing of the 2010 FIFA World Cup

Stellenbosch Working Paper Series No. WP08/2008
 
Publication date: 2008
 
Author(s):
[protected email address] (Financial and Fiscal Commission)
[protected email address] (IDASA)
 
Abstract:

This paper presents estimates of the economic impacts of financing the hosting of the 2010 FIFA World Cup by the government of South Africa. Ex ante analysis using a fiscal social accounting matrix model indicates that hosting of the event impacts positively on gross domestic product and imports. The positive impact on imports will, inter alia, lead to deterioration in the current account deficit for a given amount of exports. Owners of capital benefit more than owners of labour as a result of 2010 FIFA World Cup expenditures by the government. Middle-income Black households are the largest winners, followed by high-income Whites. Asians experience the least gain. These outcomes are explained by the initial factor endowments and their sectoral allocation in the social accounting matrix. Government revenue goes up in response to the demand injection, and a large proportion of it accrues to central government and local government respectively.

 
JEL Classification:

C68, D58, L83

Keywords:

2010 FIFA World Cup, Economic Impact, SAM Modelling, Legacy, South Africa

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