The Economic Effects of Mega-Events in Brazil

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A mega-event can be broadly defined in terms of Volume, e.g. a certain minimum number of visitors attracted over a period of time; Value, e.g. a certain minimum amount of revenue generated in a locality over a period of time or minimum capital cost of constructing facilities and in terms of psychological effect, e.g. the worldwide reputation of the event generates ‘must see’ feelings in potential tourists. It is a proven fact that successfully organizing major mega-sports events will bring tremendous tangible and intangible value for the host city and the state.

Can sports mega events help Brazil finally reach its economic goals?
The Brazilian government has introduced a program that accentuates myriad of infrastructure projects in transportation, ports, electricity, sewage-treatment plants and other facilities, because for decades the deficiency in infrastructure has haltered Brazil’s economy. Low levels of investment continue to be a key explanatory variable hindering medium-term growth in Brazil, which is evident from low investment to GDP (below 20%), compared to peer sovereigns (BRICS) in spite of increased investment in last decade.
Keeping the current macroeconomic position of Brazil in context, the 2014 FIFA World Cup & the 2016 Olympic games together have brought major challenges and opportunities, further enhancing Brazil’s exposure to the global economic arena. There has been an unwanted disbelief that whether Brazil can handle these mega-events and hence

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