Via Cyril Morong, three economists survey thirty years of literature on the benefits, or lack thereof, of public financing of stadiums. They conclude that the findings of these studies show that funding stadiums fails to deliver the desired economic impact.
Most interesting to me is section eight, on why communities continue to fund sports venues despite extremely convincing evidence that these are poor investments.
Third, despite the consensus findings of economic studies that the benefits of hosting professional sports franchises are not sufficient to justify large public subsidies, taxpayer funding continues to grow. This paradox reveals a disconnect between economic findings and policy applications that needs correcting. In most economic contributions to public policy, economists typically conduct theoretical and empirical analyses according to discipline standards and present their findings and recommendations to policymakers who are amenable to expert recommendations. The case of sports stadiums is curious, because adopted policy is in direct opposition to the recommendations of the consensus findings of area experts. Further research is needed to understand why policy choices continue to defy researcher recommendations.
This is not the first time I’ve seen the consensus of economists ignored in the public sphere. For example, governments favor anti-price gouging laws, while economists often come out against them.
Could economists not be politically active enough? Oakland is in the midst of a stadium negotiation. Should these authors be flooding the airwaves with advertisements showing the people of the city how much it’s going to cost them? Should they be demonstrating that the Athletics are capable of paying for their own stadium? Could they demonstrate that the optimum solution is to make it easy for the A’s to build, but forcing them to foot the bill?
It seems to me that scholarly papers are not enough to stop governments from publicly funding stadiums.
I’m strongly opposed to public funding models that allow for heavily subsidized profits for business, but governments are regularly involved in funding projects where benefits are diffuse and often non-monetary. For example, public parks surely don’t pass the “economic growth” test economists might devise, or support for the arts is probably loss-making. But these are the sorts of things that contribute to the overall cultural stock of a city or region and may be worth paying for even if the narrow economic argument isn’t a convincing one.
One of my favorite lines about Connie Mack is:
“and, he built Shibe Park back in 1909 without a dollar of public funding…”
Always gets a lot of likes on those old time baseball Facebook groups. The Phillies by contrast, always have seemed to need bazillions of city dollars to get both the Vet and the Bank done.
No city should ever spend a cent on stadiums. The empirical data is pretty clear.
Art K