The Economics of Football

The Economics of Football

Sporting events continue to receive attention as activities that affect almost all areas of the host country. Italy has had the privilege of hosting FIFA World Cup final on two occasions in the 20^th century, the first in 1934 and the second – in 1990. The impact of 1934 World Cup final is incomparable to 1990 final for various reasons, among them is the one that 1934 World Cup final was at a tender stage of development, and that Italy was the only bidding nation for the hosting of the event after the withdrawal of Sweden. All these events leave economic, social and political effects on the host country’s landscape. However, the 1990 World Cup final had a tremendous effect on Italy in terms of culture and history. This write-up assesses whether the 1990 FIFA World Cup final influenced the socio-economic and political formation of Italy and evaluates the lasting legacy of the event on history of Italy. 

1990 FIFA World Cup Final in Italy

FIFA World Cup finals are international events of football that are held every four years in different countries. The 1990 World Cup final was held in Italy after the country successfully bid for the hosting of the event. It ran from 8^th June 1990 to 8^th July 1990 and attracted a number of athletes and tourists from 24 countries.

According to Hoffmann and Ramasamy (251), the bidding for 1990 World Cup final by Italy provided an opportunity for the country to display its economic power owing to the strength of other bidders. Italy was the host of the second leg of World Cup final in 1934, and the presence of countries that had never hosted the event could provide a stiff competition for the country. Even with the political and social patronage that was in existence during the bidding period, Italy managed to withstand the competition and finally got the right to host the 1990 World Cup final after the withdrawal of England and Greece. In a one-round voting, Italy won against its only competitor the Soviet Union. Despite the prevailing of controversy over the patronage of Election Committee, it is arguable that Italy’s successful bidding to host the 1990 World Cup final provided an opportunity to redevelop the country in terms of infrastructure and culture.

One of the theories that are advanced by sport economists is that the major international sporting events like IOC Olympic Games and FIFA World Cups are major boosts to the socio-economic and political status of the hosting country. However, research has shown that despite the astronomical spending by countries in order to host an international event like World Cup finals, the return on investment does not translate to better increase in the GDP of the host country. Furthermore, the social and political benefits do not amount to the levels expected by the host country. This paper is of the opinion that the socio-economic and political benefits that Italy drew from 1990 World Cup finals have not yet matched the anticipated benefits to the country more than 20 years after the event.

Socio-Economic Impacts of 1990 FIFA World Cup on Italy

Italy is a country that has a well-organized structure in terms of sports and culture. It is a home of internationally acclaimed clubs such as Inter Milan and AC Milan. These two clubs have dominated international arena in the world of football more often than not playing in European champions’ league. The rise of these clubs to the top cannot be pinned to the hosting of the 1990 World Cup final as they had dominated in football before the event. However, it is notable that this event contributed largely to the emergence of some of the international players from Italy who came to the limelight after the event. Socially, as indicated by Dobson and Goddard (7), World Cup finals have provided an opportunity for the nationals of a hosting country to coalesce together in unity despite their political, religious and cultural differences. Even though it is arguable that the 1990 World Cup final provided an opportunity for people to exchange culture, this practice had no lasting effect on the Italians as people disintegrated after the event.

Similarly, there has been increasing jingoism of the expected number of sport related tourists to Italy as a hosting country. It was therefore expected that 1990 World Cup final was an opportunity for the country to revive its tourism sector through the refurbishing of infrastructure. New facilities including two new stadia and new hotels were also constructed in the anticipation of tourists’ arrival. It is notable that the government spent a lot of money on putting up the infrastructures and facilities in preparation for the visitors. However, the event only lasted for a period of 31 days, and the country was left with facilities that were less useful for its economy. Furthermore, Dobson and Goddard (7) observe that the challenge of heavy spending in putting up infrastructures and facilities for an international sporting event like World Cup final is that these events occur after four year and therefore shift the attention to the next host. The 1990 final therefore left Italy with facilities that were underutilized, and in some cases the government has spent on demolition of certain structures.

Additionally, the economic sustainability of a country is important in aligning that country as a competitor in international affairs. The 1990 World Cup final provided an economic stimulus in the economy of the country by making available employment opportunities to many people in the country prior to the event. However, this event did not provide a sustainable employment opportunities as many of the people who were employed as construction workers in stadia and other infrastructures were rendered jobless after the event. In particular, whereas countries that hosted World Cup finals later such as the United States and France benefited on their GDP from the event, Italy’s benefit was merely 0.25% of its GDP, which was far less from the approximated 3% economic increase (Hoffmann and Ramasamy 255). Some of those affected have not secured other jobs despite a heavy spending by the government to train them during the preparation. Similarly, Hoffmann and Ramasamy (257) observe that public spending on the preparation of the finals necessitated the elimination or inhibition of private spending, since public spending injects many funds in the economy without allowing the private sector to do so. In the case of Italy, the government had spent much during the bidding process and also in the construction of new facilities.

Nonetheless, Nauright (12) notes that the 1990 World Cup final provided a short-lasting opportunity for the host country to unite as a nation. He observes that this is a worldwide trend in the sports arena. During this period, people with divergent views and opinions come to unite during an international sport activity and disintegrate after the event. Italy is a country that is rich in historical events that used to bring people together either to mourn or celebrate. The 1990 World Cup final provided the country with an opportunity to celebrate together after the devastating 1980 earthquake that killed thousands of people. As a result, the event was a consolation to people that were suffering from the loss of their loved ones during the earthquake and, therefore, enabled the nation to unite in support of their team that qualified for the finals on the ground of being the host.

Political Impacts of 1990 World Cup Final in Italy

According to Torgler (290), the bid to host FIFA World Cup finals involves national football federations that in some ways have links to the political cycles of that country. The 1990 World Cup final was significant to Italy’s political landscape, because it sought to eliminate the controversy of the 1934 World Cup final that was held under a non-democratic regime. The 1990 event provided the political leadership of Italy with an opportunity to present to the world a differentiated view from the one that dotted the memories of football fans whenever World Cup finals are mentioned. Additionally, the event provided the rivaling forces within leadership of Italy with the opportunity of winning the faith of people in the implantation of government policies.

As a result of the event, there was a widespread belief among the Italian nationals in the political leadership of the country. Even though the country did not win the final, its third place was a symbol of political virility not only in Italy but also in international political spheres. As such, the status of Italy’s bargaining power in the international matters like climate change was reinforced through the 1990 World Cup final event. However, this status has not been sustained, especially with failing economy of the country fuelled by the global financial crisis. Italy is no longer among the developed nations since countries such as Brazil and China have made huge strides both politically and economically (Nauright 9).

However, some of the notable political impact of the 1990 World Cup final is the recently announcement by a former chair to the organizing committee of the event to run for presidency in the 2013 elections. Luca Di Montezemolo was the chair of the organizing committee of the 1990 World Cup final that is accredited for bringing him to the public limelight. A notable leader with inspiring leadership, Di Montezemolo’s appearance to public forums as a political leader resonates well with the 1990 World Cup final that many Italians identify themselves with. This event is likely to be a yardstick while evaluating the political capabilities of Montezemolo in bringing democracy in Italy.

Finally, it is agreeable to note that the 1990 World Cup final still plays a very significant role in determining the political and economic future of Italy, especially with the current turmoil that the country faces in terms of leadership. Even though it is disputable that the preparations of 1990 World Cup final may contribute to the final leader of Italy, Torgler (291) observes that it is likely to give Di Montezemolo an upper hand in winning the election. If this was to happen, it will go down in history as an event that helped to groom a future leader of the nation. After the 1990 World final, Montezemolo went on to have leisurely carrier at Ferrari, yet his handling of the World Cup final is likely going to overshadow other achievements because of the collective memory of the event by the people of Italy.

Conclusion

From the research, it is evident that the socio-economic and political impacts of the 1990 World Cup final were short-lived. In particular, the event failed to provide the economic stimulus that other subsequent hosts of the same event have enjoyed. Currently, the economic and political situation in Italy has remained volatile with people politically disintegrated. However, the entry of the chairperson of the Organizing Committee of the event, Luca Di Mantezemolo, in the presidential race is likely to provide a future to Italians as an upshot of the benefits of the 1990 FIFA World Cup final.