Bidding for Sport Mega-Events
University of Adelaide, School of Economics Working Paper Series No.0089
28 Pages Posted: 7 Mar 2010
Date Written: September 14, 2009
Sport mega-events such as the Olympic Games and FIFA World Cup, or on a smaller scale the Commonwealth Games or regional events, attract competing bids from nations or cities. These bids are mostly made at tax-payers’ expense and spending is often large and non-transparent. Our paper addresses the question of why large sums of public money are spent to secure uncertain rights to host events which, according to ex post studies, often yield few gains. The paper models the bidding process, emphasising public choice aspects to identify the interaction of potential beneficiaries and policymakers’ interests. The paper's empirical part examines bids from the state of South Australia, a bidder for various sports mega (or not so mega-) events with a mixed record of success, as a case study of the economics of bidding. The case study highlights the importance of institutional specificity when applying the model to individual events, the role of lobbies and of non-transparency, and path dependency.
Keywords: Bidding, Sports
JEL Classification: L83, D72, H76
Suggested Citation: Suggested Citation