The assignment talks about Government Funding for Professional Sports-funding and economic growth. So, discuss the conditions under which such funding is likely to be more or less successful in generating economic growth
Government Funding for Professional Sports-funding and economic growth
Sports Economics -Government Funding for Professional Sports. Public funding (by local, provincial or US state government) of professional sports facilities and events is often justified. On the grounds that it leads to increases in economic growth. With reference to both macroeconomic theory (likely. However, not necessarily, an AD/AS model) and the empirical evidence, discuss the conditions under which such funding is likely to be more or less successful in generating economic growth. Also, assume that the audience for this brief (500-750 words) are officials in a government Finance ministry, who have an Economics background.
Funding and economic growth
If academic scholars find that subsidies aren’t worth the cost, why do they persist? The answer is likely found in public choice economics. Known as “politics without romance,”. Public choice is the study of how policymakers and special interest groups respond to incentives when creating policy or lobbying for it, just like any normal buyer or seller.
Seen through this lens, a professional sports team enjoys an unusual amount of public favor. As well as the owners can leverage fans’ loyalty and their fear of losing the team to lobby for public funding to support their private business. In the same way, politicians see the controversy as an opportunity to identify with something that voters already support and solve a perceived “crisis.” Overly optimistic economic growth predictions provide political cover for the subsidy.
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