Every four years, billions of people tune in the watch the FIFA World Cup. For a month, football dominates global attention, bringing together nations, cultures and economies. However, long before the first whistle is even blown, another competition takes place behind the scenes: the race to host the tournament itself. Governments spend billions of pounds constructing stadiums, upgrading transport networks and preparing cities for an influx of visitors. Supporters claim these investments stimulate economic growth, and leave a lasting legacy. On the other hand, critics argue that the costs far outweigh the benefits. So, from an economic perspective, is hosting the World Cup a pathway to growth or simply an expensive prestige project?
The Case for Hosting
The strongest argument in favour of hosting is the potential for economic growth. During the tournament, huge numbers of tourists spend money on hotels, restaurants, transport and entertainment. This spending increases aggregate demand, and can even generate additional employment opportunities. This is known as the multiplier effect, where an initial injection of spending creates a larger final increase in real national income. For example, a hotel worker spends their wages in local businesses, generating income for others. This process contributes to economic growth, and therefore higher living standards.
Hosting can also accelerate investment in infrastructure. Preparing for a World Cup often requires improvements to airports, railways, roads and communications systems. Such investments can increase productivity long after the final match has been played. Better transport reduces travel times, improves efficiency and makes cities more attractive to businesses and workers. From this perspective, the World Cup can act as a catalyst for much needed projects which may otherwise have been delayed.
Not all benefits can be captured through economic statistics. Hosting the World Cup can strengthen a nation's international reputation. With 5 million viewers of the 2022 World Cup, this is one of the largest advertising opportunities in the world. This is known as soft power: the ability of a country to shape perceptions and influence others through cultural appeal. Increased tourism, foreign investment and international recognition can stem from successful hosting. There are also social benefits. The World Cup can foster national unity and collective identity. Although difficult to quantify, these outcomes contribute to a country's wellbeing, and should not be dismissed simply because they do not appear in GDP figures.
Opportunity Cost
These benefits must be weighed against significant costs. One of the most important economic concepts when evaluating major public projects is opportunity cost, the value of the next best alternative foregone. Resources are scarce, meaning money spent on World Cup preparations cannot be spent elsewhere. Spending on stadiums and sporting infrastructure means fewer resources available for healthcare, education, housing or environmental initiatives. Even if hosting generates economic growth, economists must ask whether the same funds could have produced greater benefits if allocated differently. Therefore, the key question is not simply whether the World Cup creates value, but whether it represents the best use of scarce resources.
This concern becomes particularly relevant when examining 'white elephant' projects. The term 'white elephant project' refers to an investment that has required a high expenditure but fails to deliver returns, or serves no useful purpose. While some infrastructure investments provide long-term benefits, many stadiums struggle to justify their cost once the tournament ends. Maintenance expenses remain high, while attendance often falls dramatically. A stadium built to accommodate tens of thousands of international visitors may have little practical use for a local club attraction only a fraction of that number. In cases like these, what initially appeared to be an investment begins to resemble a costly burden.
Externalities and Hidden Costs
The World Cup can also generate forms of market failure. Economists use the term externalities to describe costs or benefits to a third party. Because these effects are not reflected in market prices, they can lead to inefficient allocation of resources. Many of the externalities associated with the World Cup are negative. Host cities experience severe congestion as roads, public transport and airports operate far beyond their normal capacity. Local residents may face longer commute times and increased disruption despite receiving little direct benefit from the event. Environmental externalities can also arise from the construction of new stadiums, and the carbon emissions generated by international flights. These environmental costs affect society as a whole, rather than just the organisations responsible for the tournament. Housing markets may also be affected. In some cities, property prices and rents increase as accommodation is redirected towards tourists. This makes housing less affordable for local residents. While businesses in the hospitality sector may benefit from increased demand, the costs are often unevenly distributed across society. These negative externalities are rarely included in estimates of economic benefits, yet they can significantly affect social welfare.
Furthermore, governments may be influenced by political incentives rather than purely economic considerations. All individuals, including politicians, respond to incentives. Hosting a World Cup can generate prestige, media attention and public support, making it politically attractive, in spite of an uncertain economic outcome. As a result, projected benefits are often overstated.
Conclusion - Does hosting the World Cup actually benefit an economy?
Ultimately, the economics of hosting the World Cup is more complex than the simple choice between growth and waste. The tournament can generate benefits through tourism, infrastructure development and international recognition. Yet these gains are often accompanied by substantial opportunity costs, underused facilities and negative externalities.
Economic analysis therefore suggests that hosting is not automatically beneficial. Success depends on whether investments create lasting value when the tournament has ended, and whether the benefits outweigh sacrificed resources. Countries should therefore approach hosting decisions with rigorous cost-benefit analysis rather than national enthusiasm alone. The World Cup may crown a nation champion every four years, but economics asks a different question altogether. The true winner is not necessarily the nation that hosts the tournament, but the one that allocates its scarce resources most effectively.
Ava Twum-Ampofo
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